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The industrial internet – demystifying the hype

May 5, 2015

For several months now, the industrial internet has been touted as the next big trend – a new wave that could transform businesses and revolutionize industry. But how much substance is there behind the promise? Mikael Haag examines what it will take to bring these big ideas into reality.

Hype – that’s probably the first thing that comes into a researcher’s mind when the industrial internet is mentioned. In Finland, even a tabloid newspaper has echoed the claim that the industrial internet is set to revolutionize industry. At this point it simply cannot be denied that there is a tremendously large amount of fuss and hype going on.

But there’s good reason for that. Just consider the industrial internet as an industrial subset of digitalization, a megatrend which at this very moment is rapidly reshaping the structures of consumer business. Now consider if the same were to happen in the industrial context. With that scenario in mind, then there’s certainly good reason for the hype.

At the moment the industrial internet is typically defined as a set of technologies that allow industrial devices to communicate with each other and to upload sensor data to cloud services, which in turn enable the collection and analysis of large amounts of data to be used for different types of optimizations. This is already happening in many industrial service applications today. At the same time, the related technology has been developing rapidly, and as a consequence, generating an even larger potential for innovation. This means that we can expect new industrial internet-based product, process and service innovations to break through on many other industrial application fields as well in the near future.

Towards a unified platform

In my view, the development of the industrial internet will culminate in the integration of available technologies into a platform that allows easier and faster development of applications. In other words, what Microsoft did for personal computing or what Google achieved in the case of cell phone applications is bound to take place for the industrial internet too. And because of the huge business potential, many companies – from technology enterprises to start-ups – are striving to become platform suppliers.

In actuality, a battle of standards and platforms will most likely have to occur before industrial internet applications can really spread out from the proprietary high-end systems where they can now be found so that, eventually, they really connect different devices and resources through value chains. When this happens, the true potential of the industrial internet will be released.

The need for open innovation

It’s clear that digitalization will change industry in the long run, and not everyone will turn out to be a winner. When it comes to the industrial internet, we can clearly see the trend and witness the fast development of related technologies. Companies need to stay alert and be ready to leap at this opportunity. But this isn’t easy in such a rapidly changing environment.

The industrial internet requires multidisciplinary technical, business and product development process know-how. To make this possible, it is important for companies to acknowledge the need to expand their product development front end by actively networking with researchers and agile technology companies in the spirit of open innovation.


Text: Mikael Haag
Illustration: Anton Yarkin

Mikael Haag

  • Research Team Leader at VTT, the Technical Research Centre of Finland – Northern Europe’s largest multidisciplinary research organization.
  • Catalyst at the Finnish Industrial Internet Forum, an enterprise-driven association that aims to harness the potential of the Industrial Internet to create concrete and sustainable business opportunities for Finnish companies.