Hitachi forms unit to drive IoT opportunities

The Internet of Things is a big opportunity. Really big. And Hitachi intends to take advantage of it.

Hitachi forms unit to drive IoT opportunities
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News today from Hitachi is that the company is forming a new, standalone Silicon Valley-based unit to explore and execute upon opportunities within the Internet of Things.

This is interesting, since the parent group, Hitachi Limited, has a dizzying variety of business units, many (if not most) of which have their own IoT opportunities. Indeed, when attending a Hitachi Data Systems conference last year, I was amazed at the variety of businesses that fall under the Hitachi moniker. Many of those businesses were demonstrating in the expo hall, and a huge number had an IoT bent to what they were doing.

[MORE: Who will manage IoT in the enterprise?]

So, to have Hitachi create a standalone unit is a pretty bold move. The business, named the Hitachi Insight Group, is aimed at leveraging Hitachi's long experience in industrial and IT fields and applying new technologies around four distinct markets: Smart City, Smart Energy, Smart Healthcare and Smart Industry.

This isn't an entirely new area for Hitachi, after all the group as a whole had more than $5 billion in IoT-related business in 2015 alone. But by integrating operational and IT expertise from across the group, an entirely new set of product offerings becomes possible.

IoT opportunities in the enterprise

While IoT examples are often given around consumer or household situations (the connected toothbrush or the connected refrigerator, for example), the reality is that industry, long a user of connected technologies such as SCADA and PLCs, is the bigger IoT opportunity.

“The greatest opportunity for IoT lies in the enterprise, industrial and public sector markets, which stand to benefit significantly from digital transformation. Although the market is still nascent, digitalization is already disrupting traditional product-based business models, driving demand for solutions and an everything-as-a-service approach,” said Vernon Turner, senior vice president, enterprise systems and IoT research fellow at IDC.

To deepen its subject matter expertise across specific verticals, Hitachi Insight Group has entered into alliance with vendors such as AT&T, Ericsson, Eurotech, Intel, Microsoft, PTC and SAP. (Many of those, it must be said, have their own IoT ambitions. No word on how these potential conflicts will be resolved.)

New IoT platform

Alongside the announcement of the new business unit, Hitachi announced a new IoT platform, Lumada. Lumada is touted as a open and adaptable IoT platform. It was created by combining existing commercial technologies from across Hitachi's portfolio to create a common platform to cover data orchestration, streaming analytics, content intelligence, simulation models and other Hitachi software technologies.

Lumada is delivered as a framework of IoT solution building blocks, including edge device and connectivity integration, application integration, data integration and orchestration, data repositories, stream and batch data processing, analytics, artificial intelligence, simulation tools, repeatable solution blueprints, and enterprise services. (That isn't surprising given it is an amalgam of lots of different products.) Hitachi sees Lumada uniqueness across three different traits: openness, adaptability and security.


It's always hard with a massive company like Hitachi—getting all the ducks in a row around an announcement, plus the release of a new platform through a new business unit is beyond hard. On one hand, Hitachi absolutely has a pedigree of building connected industrial systems across a huge variety of sectors. The optimist in me wants to say that the knowledge Hitachi has built up over the past decades will result in a credible IoT platform.

But at the same time, I worry about the cultural realities of trying to glue together a variety of different component technologies from many different organizations. Collaboration between business units is perhaps something Hitachi hasn't done well in the past, and this opportunity demands high level of collaboration.

Hitachi certainly has the scale and the smarts. The question now is whether it has the cultural attributes to really execute this opportunity effectively.

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