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Infrastructure and Operations

How Industrial Firms Are Ruled by Maslow’s Hierarchy of IoT

Understanding the maturation shifts in IoT that will disrupt the industrial markets

As industrial manufacturers increasingly fold the internet of things (IoT) into their factories and plants, the industrial IoT (IIoT) ecosystem is due to create some seismic rifts in how companies run industrial operations. The disruptions won’t come all at once, of course, but a digital executive at one of the world’s largest industrial equipment manufacturer believes they’ll follow along a scale of what he’s calling “Maslow’s Hierarchy of IoT.”

In a fascinating interview by Stacey Higginbotham in her Stacey on IoT podcast, Guido Jouret, chief digital officer (CDO) of ABB, lays out how he sees the IIoT maturation process mirroring psychologist Abraham Maslow’s Hierarchy of Needs.

As Jouret puts it, ABB “makes technology that help turn electricity into motion.” He describes his job as CDO of the $34 billion firm as being responsible for injecting digital technologies across ABB’s entire portfolio of products and services. In his work looking at how IoT changes the game for ABB, he says he had a lightbulb moment when he came up with the concept of Maslow’s Hierarchy of IT to boil down a vastly complex mesh of different kinds of IIoT technologies and use cases—everything from simple environmental sensors in devices for monitoring purposes, to machine-learning applications that turn sensor data into predictive maintenance actions—to five different capabilities or levels.

The Five Levels of Maslow’s Hierarchy of IoT

1. Monitoring: At the first level of the hierarchy, organizations start with simple monitoring. That’s the base of the pyramid—where probably 60 percent to 70 percent of all IIoT use cases still reside, Jouret says—simply providing sensors on machinery to keep track of performance, maintenance schedules, and so on.

2. Optimization: As Jouret puts it, if a sensor can read, it can also write. The next shift up the pyramid is optimization, where an organization can have IoT devices start automating changes to machinery based on the conditions they read and other business inputs. “As a result, you can go beyond monitoring,” he says. “You can make things run faster, consumer less energy, and be more reliable by not operating in extremes.”

3. Product 2.0: The next step up is what Jouret calls Product 2.0. A fascinating by-product of always-on monitoring is that it gives manufacturers another level of insight into the features that ther industrial customers use most, he says. That, in turn, can finally allow them to follow in the footsteps of software manufacturers to iterate more effectively with small improvements. “For those people that make physical things—motors, etc.—we put time and effort into R&D, and yet we have no idea which features our customers really use because we have no feedback loops. Or at least we didn’t until now,” he says. “With this wealth of data, now for the first time we can make your products better based on usage data.”

4. Convergence: Similar to how the smartphone continually converged additional new features year by year into a single form factor for consumers—camera, clock, calendar, and so on—manufacturers are going to be establishing more converged industrial devices that will add unheard-of features to industrial equipment. Jouret uses a circuit breaker ABB makes as an example. It measures power quality and can shed unnecessary loads if the customer wants to do demand response. And those are features offered as apps that can be downloaded onto the computer in the circuit breaker.

5. Business Model Innovations: That kind of convergence starts leading to the final tip of the hierarchy, which is business model innovations “that the world of the industrial economy hasn’t had before.” With the power of IIoT, now all of a sudden customers may have the choice in how they buy their industrial systems. With predictive maintenance down to a science, manufacturers of this equipment may offer subscription models where the customer pays a flat monthly fee or even on a usage basis because with so much telemetry, the manufacturer of a widget maker can know exactly how many widgets are made at any given time and under what conditions.

To learn more about how Jouret defines this model for IIoT maturity and what needs to line up for the industry to mature up the pyramid, have a listen to the podcast. His interview starts at the 37:40 mark.

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