Earlier this week I attended Hitachi Summit 2016 along with a number of other analysts and Hitachi executives where Hitachi discussed their current and ongoing focus on the IoT (Internet of Things) business.
We have discussed IoT before (see QoM1608: The coming IoT tsunami or not, Extremely low power transistors … new IoT applications). Analysts and companies predict ~200B IoT devices by 2020 (my QoM prediction is 72.1B 0.7 probability). But in any case there’s a lot of IoT activity going to come online, very shortly. Hitachi is already active in IoT and if anything, wants it to grow, significantly.
Hitachi’s current IoT business
Hitachi is uniquely positioned to take on the IoT business over the coming decades, having a number of current businesses in industrial processes, transportation, energy production, water management, etc. Over time, all these industries and more are becoming much more data driven and smarter as IoT rolls out.
Some metrics indicating the scale of Hitachi’s current IoT business, include:
- Hitachi is #79 in the Fortune Global 500;
- Hitachi’s generated $5.4B (FY15) in IoT revenue;
- Hitachi IoT R&D investment is $2.3B (over 3 years);
- Hitachi has 15K customers Worldwide and 1400+ partners; and
- Hitachi spends ~$3B in R&D annually and has 119K patents
Hitachi has been in the OT (Operational [industrial] Technology) business for over a century now. Hitachi has also had a very successful and ongoing IT business (Hitachi Data Systems) for decades now. Their main competitors in this IoT business are GE and Siemans but neither have the extensive history in IT that Hitachi has had. But both are working hard to catchup.
Hitachi Rail-as-a-Service
For one example of what Hitachi is doing in IoT, they have recently won a 27.5 year Rail-as-a-Service contract to upgrade, ticket, maintain and manage all new trains for UK Rail. This entails upgrading all train rolling stock, provide upgraded rail signaling, traffic management systems, depot and station equipment and ticketing services for all of UK Rail.
The success and profitability of this Hitachi service offering hinges on their ability to provide more cost efficient rail transport. A key capability they plan to deliver is predictive maintenance.
Today, in UK and most other major rail systems, train high availability is often supplied by using spare rolling stock, that’s pre-positioned and available to call into service, when needed. With Hitachi’s new predictive maintenance capabilities, the plan is to reduce, if not totally eliminate the need for spare rolling stock inventory and keep the new trains running 7X24.
Hitachi said their new trains capture 48K data items and generate over ~25GB/train/day. All this data, will be fed into their new Hitachi Insight Group Lumada platform which includes Pentaho, HSDP (Hitachi Streaming Data Platform) and their Content Analytics to analyze train data and determine how best to keep the trains running. Behind all this analytical power will no doubt be HDS HCP object store used to keep track of all the train sensor data and other information, Hitachi UCP servers to process it all, and other Hitachi software and hardware to glue it all together.
The new trains and services will be rolled out over time, but there’s a pretty impressive time table. For instance, Hitachi will add 120 new high speed trains to UK Rail by 2018. About the only thing that Hitachi is not directly responsible for in this Rail-as-a-Service offering, is the communications network for the trains.
Hitachi other IoT offerings
Hitachi is actively seeking other customers for their Rail-as-a-service IoT service offering. But it doesn’t stop there, they would like to offer smart-water-as-a-service, smart-city-as-a-service, digital-energy-as-a-service, etc.
There’s almost nothing that Hitachi currently supplies as industrial products that they wouldn’t consider offering in an X-as-a-service solution. With HDS Lumada Analytics, HCP and HDS storage systems, Hitachi UCP converged infrastructure, Hitachi industrial products, and Hitachi consulting services, together they are primed to take over the IoT-industrial products/services market.
Welcome to the new Hitachi IoT world.
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