This past week I visited several customers in different business verticals. One was an energy and power company, another was an insurance company and the others were in media and entertainment. A common theme in all these meetings was digital transformation and the disruption it is causing in all these sectors. The disruption was not so much about the technology, but more about the disruption in their business models by new startups in their industry. Each meeting also provided insight into the value of IoT
Energy and Power
In the energy and power vertical, the old centralized model of a huge, capital intensive, energy generation plant with a huge transmission grid located far from their consumers is giving way to a distributed model where energy is being generated from renewable sources close to the consumer in micro grids. Many of these large energy generation plants are being used at a fraction of their capacity making it difficult to generate revenue for established power companies. While renewable sources of energy like solar and wind are clean, they are subject to the vagaries of weather, and need new technologies around IoT, big data, and predictive analytics to provide reliable power. With deregulation new competitors are entering the utility business. Some municipalities are setting up their own mini-grids sharing power generated from solar panels on residences and businesses. While power companies may have installed smart meters to reduce the cost of meter readers, they have not yet tapped the real potential of that connection into the home to manage home devices. See how Hitachi is working with Island of Maui in the state of Hawaii, to Solve Energy Problems in Hawaii Hitachi's Smart Grid Demonstration Project by connecting residential solar panels with wind farms and electric vehicles.
In the insurance business there are many new opportunities which has given rise to a new class of Fintechs, that are classified as Insurtechs.
Like their banking counterparts, many of the insurance companies are partnering with these Insurtech companies to drive innovation. The particular company that I visited had just created a unit to drive digital innovation across its businesses and their CIO was promoted to head up this unit as the Chief Technology Innovation Officer. The group is tasked with identifying emerging customer segments; leveraging data and analytics; and helping the company’s distribution partners innovate and strategically grow their businesses. They are already partnering with several Insurtech companies. They also are subject to many regulations including GDPR, which I covered in a previous post. Insurance companies are also connecting with IoT. Real-time data from embedded sensors in a wide range of internet-connected devices like automobiles and Fitbits, along with advanced analytics, will allow insurers to offer many new and enhanced products and services. Read this link to see how Hitachi is creating new IoT driven Insurance services that can reform insurance services from being reactive, responding to accidents and other incidents after the fact, to proactive, which provides services in advance.
Media and Entertainment
The media entertainment business is also undergoing a massive change. Twenty years ago the definition of broadcast and entertainment was very simple. Content came from the establishment and sent in one direction. Today’s social and video networks are changing the entire business model of content, publishers, broadcasting, entertainment, news, advertising and digital rights. The online and mobile ecosystem also changes how content reaches viewers, and on-demand viewing has made the fixed, mediated schedule of linear programming seem obsolete. For example, to deliver contextual advertising you need to truly understand your audience. This starts with combining a lot of different data: Information about your viewer, demographics, etc; their viewing patterns; and metadata about the content they are viewing. This data comes from many sources, in different formats, and delivery mechanisms. A data integration tool like Pentaho will help to provide market insights, operational insight and risk insights.
The infrastructure is also undergoing major changes Streaming video completely bypasses the traditional video-aggregation and distribution models around broadcast networks, cable, and satellite—disrupting long-standing value chains and dedicated infrastructure (for example, broadcast towers, cable lines, and satellites) that have historically been critical to the television industry. Hitachi also has vertical expertise which can help with solutions on the operational side. MediaCorp Pte Ltd, Singapore's leading media company overcomes transmission challenges using Digital Microwave Link from Hitachi.
An IoT Approach to Digital Transformation
In each of these business there was a very heavy IT focus on data integration and analytics. But there was also a need for OT focus as well when it comes to transforming the business model. This is where Hitachi has an advantage with its expertise in IT and OT and the capability to integrate this into IoT. While I just met with three different verticals, I expect that the same would be applicable in other verticals.