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Industrial machine builders are struggling to identify the appropriate technologies and business structure to create an IIoT ecosystem that improves their service value proposition. Like the play “Waiting for Godot”, the proliferation of IIoT interpretations can lead some to end up waiting for a clairvoyant moment where all the pieces will come together. The fact is that some sectors that are simply not waiting for Godot. For example, the commercial office automation market is plodding ahead. Equipment suppliers in the building systems market are incorporating innovative technology to meet the growing demand for intelligent urban infrastructure. This comprehensive service offering represents a win-win proposition for both equipment suppliers and building owners and operators. For owner-operators, it offers a strong value proposition since it makes their buildings smarter and more efficient. For the equipment suppliers, it represents a long-term opportunity to gain market share from local service providers. These capabilities enable OEMs to compete more effectively with third-party service providers and captive, in-house maintenance services alike, while improving both top line growth and profit margins.
Based on the annual revenue figures from publicly traded equipment suppliers in this sector, the growth in new installations and services over the last five years was between 3 to 5 percent annually. Companies in this sector generate revenue streams from a combination of new installations, modernization programs, and services. Modernization accounts for a significant portion of revenues in the elevator sector making services heavier weight on the financial side. On average, new installations account for roughly 40 percent of the annual industry revenues while services (maintenance, modernization and spare parts, etc.) comprise the remaining 60 percent of the business. Companies in this sector want a bigger piece of the service pie. It is estimated that machinery OEMs are only capturing 30 to 40 percent of the total potentially available market for services. The rest of the services are provided by local, independent third party service providers. To compete, OEMs are taking advantage of the underlying concepts of IIoT by connecting machines, increasing intelligence and leveraging analytics in the Cloud to provide both cost effective and improved services that provide remote predictive monitoring and maintenance services for their customers.
For example, Otis Elevator is tightly coupling its moving systems with the United Technologies Building Systems HVAC, fire & safety and security offering, enabling the unified management of its customers’ large commercial buildings through its central command and control center. Otis has collaborated with Microsoft to offer an IoT-enabled solution that can improve equipment service life. The solution uses networked elevator sensors that send data directly to the cloud. Data is processed intelligently and made available to service engineers from a central access point. This offers the potential to significantly improve the responsiveness of the Otis’ service and maintenance business. The solution combines various Microsoft systems for IoT, such as the Azure Intelligent System Service and Azure Machine Learning. Data delivered by thousands of monitoring sensors, from door sensors to shaft settings to cab speed, provide a comprehensive overview of an individual elevator’s status. Otis has also aligned its machinery business with its building automation business and can now offer a comprehensive building management solution that includes HVAC, security, fire protection, and moving systems.
Manufacturers of commercial building equipment are positioning the business to reap measurable financial benefits from their IIoT-related investments and associated innovations as the business scales. If you are waiting for that “ah ha” moment to implement IIoT, like Godot it may never arrive and the opportunity will pass you by.
Based on the annual revenue figures from publicly traded equipment suppliers in this sector, the growth in new installations and services over the last five years was between 3 to 5 percent annually. Companies in this sector generate revenue streams from a combination of new installations, modernization programs, and services. Modernization accounts for a significant portion of revenues in the elevator sector making services heavier weight on the financial side. On average, new installations account for roughly 40 percent of the annual industry revenues while services (maintenance, modernization and spare parts, etc.) comprise the remaining 60 percent of the business. Companies in this sector want a bigger piece of the service pie. It is estimated that machinery OEMs are only capturing 30 to 40 percent of the total potentially available market for services. The rest of the services are provided by local, independent third party service providers. To compete, OEMs are taking advantage of the underlying concepts of IIoT by connecting machines, increasing intelligence and leveraging analytics in the Cloud to provide both cost effective and improved services that provide remote predictive monitoring and maintenance services for their customers.
For example, Otis Elevator is tightly coupling its moving systems with the United Technologies Building Systems HVAC, fire & safety and security offering, enabling the unified management of its customers’ large commercial buildings through its central command and control center. Otis has collaborated with Microsoft to offer an IoT-enabled solution that can improve equipment service life. The solution uses networked elevator sensors that send data directly to the cloud. Data is processed intelligently and made available to service engineers from a central access point. This offers the potential to significantly improve the responsiveness of the Otis’ service and maintenance business. The solution combines various Microsoft systems for IoT, such as the Azure Intelligent System Service and Azure Machine Learning. Data delivered by thousands of monitoring sensors, from door sensors to shaft settings to cab speed, provide a comprehensive overview of an individual elevator’s status. Otis has also aligned its machinery business with its building automation business and can now offer a comprehensive building management solution that includes HVAC, security, fire protection, and moving systems.
Manufacturers of commercial building equipment are positioning the business to reap measurable financial benefits from their IIoT-related investments and associated innovations as the business scales. If you are waiting for that “ah ha” moment to implement IIoT, like Godot it may never arrive and the opportunity will pass you by.