At IoT World 2016, which was organized by Informa Group and took place in Silicon Valley in USA last month, Hitachi announced Lumada, its IoT Core Platform, as well as the establishment of new entity for the development of its global IoT business: Hitachi Insight Group. JSON.TV had an opportunity to meet and talk with Kevin Eggleston, General Manager of the Americas for Hitachi Insight Group. Kevin talks about Hitachi's IoT business, solution portfolio and use cases, as well as his personal views on IoT as a disruptive technology for both business and society.
Kevin, thank you for interesting panel discussion and sharing time with JSON.TV for this interview. Please, firstly, give us a couple of words about Hitachi Insight Group ...
- Thank you for your question. Today we officially announced Hitachi Insight Group, a new structural division within Hitachi, with headquarters in Santa Clara (California, USA). The new Group will consolidate all previous Hitachi activities in IoT sphere, playing a central role for competence and commercializing IoT worldwide. Hitachi generated USD $5.4 billion in IoT solutions and services revenue in our fiscal year 2015 and have 33 solutions IoT in-market today. We also have plenty of great partners that are IoT leaders in their own right, including AT&T, Eurotech, Intel, Microsoft, PTC and SAP. The Insight Group was created to help drive the IoT opportunity for Hitachi, its customers and partners on a global scale.
Kevin, you’ve mentioned Hitachi’s commercial IoT solutions – could you give us some examples? In Russia we have primarily interest in manufacturing, agriculture and energy/utilities.
- Sure, let’s start with the last sphere. Energy is a good example of how IoT is helping to create new business models and drive greater efficiencies, as with our “Energy Savings-as-a-service” solution. One of our customers, a large global telecommunications company, was spending billions of dollars each year on energy consumption. Hitachi is now monitoring and managing their energy consumption with sensors. We don’t charge them for that, since we’re sharing the savings they get. It’s a great new business model that is only possible because of IoT and it requires that Hitachi makes an investment alongside our customer. We take a share of savings and they take a share, so we’re in it together.
Another example from the energy sphere is microgrids. The USA‘s power grids are aging, particularly in regions like the East Coast, which were among the first to be established. The region is also subjected to a lot of extreme weather and storm activity, thus energy reliability and resiliency is low. At the same time, the region’s energy consumption keeps growing. That’s why here in US we are seeing increased interest in the development of microgrids: small independent power-generation sites and utilities that can be installed to support townships, university campuses, enterprises, and so forth.
Microgrids leverage a combination of traditional power generation, like gas, turbines, as well as renewable and sustainable energy sources. But more importantly, they’re attached to the grid too, so they’re also contributing energy back into the grid. New York, where several of our microgrid projects are located, they are heavily investing in IoT and have created a program around microgrids, to add new capacity and resilience to the overall energy grid. And it can help to attract business and keep businesses there. That’s a good example of IoT enablement. Because you have to be able to manage the overall consumption, production, billing… - everything in a microgrid or already so-called “smart grid.”
Kevin, what about manufacturing?
- One of my favorite IoT in manufacturing use cases is a large Hitachi industrial factory in Japan called Omika Works. Hitachi is a very large industrial company with thousands of factories, so we like to “drink our own champagne,” and as I mentioned earlier, we realized we were doing an IoT before the term “IoT” existed. At the Omika Works factory, we applied IoT sensors to everything—MEMS sensors and RFID—and applied video analytics and more, to drive substantial production cost savings with IoT – around 30%.
This is a big and very promising focus for my team from a global perspective, with Industrie 4.0 in Europe and especially Germany with its heavy industrial base—as well as the USA and, Japan, which both have similar initiatives. We see great new opportunities especially in traditional markets and industries like manufacturing and are planning to bring our “Optimized Factory solutions” to the global market soon.
Do you have some partnerships for this movement?
- Actually, we did factory optimization in Japan mainly on our own, but we will globalize this solution. For that we will certainly partner with, for instance, someone who develops ERP systems. That could be a great example of partnership in IoT.
Kevin, thanks for that. So, do you work in IoT with governments too or just focusing on Enterprise? Could you describe your typical client in IoT?
- The government sector is very important to us. If you think about Public Safety and Smart City, for example: both segments present big issues and big opportunities for Hitachi to make a difference. Government is definitely an area where we believe we can make a difference with IoT in the US and around the world.
Regarding our existing IoT clients, they’re typically large enterprises. They’re state clients for Smart City applications, they’re hospitals for healthcare applications, they’re private businesses, and they’re governments for energy, you know, general industrial application.
Kevin Eggleston, General Manager of the Americas for Hitachi Insight Group at IoT World 2016 (10-12 May, Santa Clara)
Kevin, we were impressed by the speech of your colleague, Jack Domme, who mentioned that Hitachi in the IoT sphere, is evaluated by no other departments but Social Innovations. So wonderful!
- Right. If you look at Hitachi’s history, our overall strategy for 106 years has been: we want to take what we’re really good at to solve problems in society. And we’re an engineering company. So in the early days of the company it was “make Japan healthier, safer and smarter”. We eventually became a global company, and social innovation is a representation of that strategy on a global scale. We’re committed to taking what we’re really good at, looking for big problems in society we can apply that to and then developing innovations we can bring to market to make a real difference in the world”.
IoT represents a new industrial revolution—the single most important revolution in the history of mankind in my opinion. You remember previous ones: the first industrial revolution, the digital and the Internet revolution – those pale in comparison to the impact of IoT, which really brings it all together.
So, what are the main challenges within IoT adoption and conducting such projects by Enterprise?
- There are few big challenges, most certainly investment. Also, people are realizing now the massive amount of data associated with IoT. Because when you have sensors everywhere, they produce a lot of data – some that’s worth nothing and some that’s worth a lot – and you have to manage it, separate important data from nonessential. These are huge challenges that small companies can’t address on their own. And another area that we’ve talked about a lot is information security. I’d say money, data, and security are the biggest challenges associated with IoT.
Kevin, if you were a mayor or even head of state and if you had to start IoT development from the ground again, what would your first several steps?
- If I were the mayor of a city, the governor of a province, or the head of a country, I’d start by reaching out to the private sector to ensure we were developing a plan together. This is not one or the other. You have to have public-private partnerships to really define a plan for IoT. Miguel Gamino, CIO of San Francisco, who spoke at IoT World today, gave us a great example of the private and public sectors working together in a big city of San Francisco’s scale.
The next step is to prioritize: What resources do we have? What do our citizens need? What are our biggest problems?” Traffic congestion is one challenge that IoT is well positioned to solve. Jack Domme talked about that in his speech today, using GPS data from smartphones and cars and applying IoT analytics to address traffic. This is a great example of an area where you would want to involve the private sector, which is also where a lot of innovation is. You’ve got to think like an entrepreneur to find new opportunities and monetize.
Well, but if we start with IoT in manufacturing?
- From our experience, you have to look at what you’re doing and how you can drive efficiency. Just like we did in Japan, you can be more productive and more efficient with IoT – it pays for itself.
All of that looks like our children will be living in completely different world with new level of possibilities.
- It’s true. My children are now in their twenties. The thing we worry about in the US is that every generation is better off than previous one. I’m better off that my parents, my parents were better than my grandparents. I worry now that maybe that’s not going to be true for my kids and current US generation. Because you can’t afford a house, incomes are low etc. I think you can probably identify with that in Russia too.
But I really believe the world is going to get better for our next generations because of IoT. This revolution is going to make lives better—that gives me confidence. We’ll be healthier, there’ll be more economic opportunities, higher standards of living, the quality of water will be better and quality of food will be better. It’s a general worry we all have, but the promise of IoT gives me hope.
Kevin, thanks for such inspiration speech! We all wish you good luck to Hitachi Insight Group
- Thank you, JSON.TV, for sharing your time.
By Sergei Maltcev
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