Japanese industrial giant Hitachi is making a big play for the IoT market, hoping to align its 106-year heritage in operational technology (OT) with its 57 years of information technology (IT).

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Hitachi Limited has more than 900 subsidiaries with expertise and sales teams in a wide range of industries. The company wants to draw on the experience of specific subsidiaries to push into the IoT market. Responsibility for the IoT business belongs to a newly created group called Hitachi Insight Group, headquartered in Santa Clara.

It’s the umbrella group to bring together other Hitachi businesses like Hitachi Data Systems or Hitachi Consulting to work with business units in industry such as rail, energy and manufacturing.


Speaking to media at a Hitachi event in Tokyo last week, Kevin Eggleston, General Manager, Americas, of Hitachi Insight Group, said cheap bandwidth, storage, compute and sensors have lead to the rise in IoT.

“The reason IoT is a thing is because it can be now,” Eggleston said. “It’s just the right time. Everything is sensorised. Compute, data and bandwidth are essentially free and ubiquitous and therefore you are able to connect things and drive insight out of that connectivity and the analytics and data that results from those things.

“We see this as not just a unique opportunity as something that sets us apart but it actually represent a unique obligation that we have in the marketplace because we’ve been doing this for so long — building trains and building energy production facilities and healthcare systems etc. — and we are so significant from an IT perspective, being in the business for almost 60 years, we think it’s a unique obligation to bring those together to solve big problems.”

Using its IoT reference platform called Lumada, Hitachi has several IoT use cases in market:

  • Using sensor data from Caterpillar Marine’s ships to provide predictive maintenance capability. By finding and fixing a faulty fuel injector aboard a supply ship reduced the ship’s fuel consumption by five per cent.
  • Closer to home, Hitachi has deployed sensors on 650,000 power poles in Western Australia which can monitor temperature, detect smoke and vibrations if a vehicle hits the pole. The group is now looking to deploy the solution on trees and lighting in different regions across APAC.
  • Hitachi Rail Europe has a multi-billion dollar 27.5 year contract to carry out the maintenance of ageing stock for Network Rail in the UK. Billed as a service, Hitachi is responsible for the transportation experience and is measured on availability and reliability which is reflected in on-time performance. They are also measured on things like toilets being up and working, accurate displays around next train time, cleanliness and Wi-Fi availability.

When OT meets IT

When asked how the two cultures of IT and OT work together, Eggleston said the key is for the business unit to own the strategy.

“The business unit knows how to run a train. We [Hiatchi Insight Group] don’t know how to run a train. We know how to help them take all the data that’s spinning off a train and run that train more efficiently and provide the rail as a service. So philosophically, business unit is at the front because that’s where the experience is and the industry to keep those things from crashing.”

Eggleston argued this industry-specific knowledge gives the group an advantage over other players entering the IoT market.

“If you think about most technology companies who are now moving into IoT — that is the future because traditional technology is being commoditised — they don’t know anything about elevators or microgrids and how do to penetrate that [market]. For us we are lucky we are actually in those industries,” Eggleston said.

Next Gen IoT integration

Currently the sensors deployed on trains are there to monitor the train’s performance and help lower maintenance costs by providing a more accurate indication about when parts need to be replaced.

According to Ravi Chalaka, Vice President, Global IoT Marketing, Hitachi Insight Group, the next generation of IoT devices will address how to optimise the travel experience for customers — for example by providing the right number of taxis outside the station.

“The primary focus right now is you’ve got 3000 sensors on a train from head to tail and you’re ensuring you achieve that 100 per cent up-time and safety record. Second is the experience of the customers within the train, and then ultimately the experience of the customer throughout the city,” Chalaka said.

Who owns the data?

Hitachi currently doesn’t generate revenue from selling data it collects, but Eggleston acknowledged the ownership over IoT data is a big question.

“For everybody this is an evolving thing. I think you’ll see from companies like us over time offering Analytics-as-a-Service. There’s no doubt about that because not all clients want to do their own analytics and we’ve got that capability with our data science team around the world. But the data, by and large, I think is always going to be owned by the client.”

The bulk of the data currently collected in industrial uses cases is largely operational and less valuable to a third party, Eggleston said.

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“In the UK rail case, we own all that data because we own the trains. But it’s just the operation of the trains and the ticketing systems and all that. So it’s data we need to effectively run those trains. If they ran those trains it would be their data and we would just be providing the analytics and the insight to make them run more effectively. I think they are typically the models,” Eggleston said.

“It’s valuable to us to maintain a train but I don’t think it [the data] helps a third party as much,” Chalaka added.


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