The sea change is due to the coming proliferation of IIoT empowered by IIoW (1). Those companies leveraging the Industrial Internet of Wisdom (IIoW) to empower the Industrial Internet of Things (IIoT) will generate both higher revenues due to higher margins per unit sale but also increased market share. An example would be condition monitoring at the dozens of BASF plants around the world. The process management system is built around use of Samson valves and E+H instrumentation. At the very least Samson and E+H have expanded their market share at all the BASF plants around the world. To the extent that the sales include edge computer software built upon product and process knowledge the unit sales are also increased.
Markets can be divided into four categories including the three traditional ones and a new one created by the sea change in the business environment.
• TAM or Total Available Market is the total market demand for a product or service.
• SAM or Serviceable Available Market is the segment of the TAM targeted by your products and services, which is within your geographical or asset reach.
• SOM or Serviceable Obtainable Market is the portion of SAM that you can capture.
• WOM or Wisdom-based obtainable market is the bigger opportunity created by a sea change in the route to market.
Valve companies are likely to focus on either high performance or general performance valves. High performance valves include those involving severe or critical service. They also include general performance valves utilized in a unique system to provide high performance. These products command higher initial prices based on lower total cost of ownership. A severe service valve, which fails can cause expenses far beyond initial cost. A critical service valve, which contaminates a food or pharmaceutical product will also cause expenses far beyond initial cost. A high- performance valve package will provide benefits offsetting the higher price.
The markets for high performance valve suppliers can be segmented into the four categories. TAM is the total available market. The world industrial valve revenues will exceed $62 billion this year (2). Nearly half those sales will fall into the expanded high-performance category (SAM).
Valve companies have a great deal of knowledge about the potential performance of their valves under various conditions. They have varying degrees of knowledge about the processes in which their valves are used. With remote monitoring and data analytics there will be an avalanche of information on the performance of each high-performance valve in each process in each application. IIoW will connect people and available wisdom to this new-found wisdom. This interconnected wisdom can be leveraged in edge computing systems which are the link between the valves and the cloud-based process management system. Those valve companies which develop the edge computer wisdom will prosper in contrast to those who defer to others.
In table 2 is an example of two large valve companies with many types of valves, global sales and manufacturing. Each has a serviceable obtainable market of $20 billion and each has a 5 percent market share not including the edge computer wisdom-based revenues (WOM), which expand the market to $24 billion. This expansion is significant be- cause on/off as well as control valves can be cost effectively monitored.
Purchasers will prefer to deal with sup- pliers who can supply edge computer wisdom and expert on line support. After the sea change the company with- out the wisdom loses 20 percent of its market while the other increases valve revenues by 30 percent. The wisdom-based supplier also adds the edge computer revenue thereby increasing sales by 50 percent over the five-year period.
IIoW will empower and be as important as IIoT. Steps to leverage IIoW can be taken immediately independent of eventual edge computing process development (3). In fact, the edge computing process management product will be based on IIoW initiatives. These initiatives include greater knowledge of how products present and future can improve specific processes for specific customers. This wisdom in turn is based on interconnection of people and knowledge.
This interconnection requires an organized company wide effort but one which will reap big rewards.
1. IIoT and Remote O&M published by the McIlvaine Company
2. Industrial Valves: World Markets published by the McIlvaine Company
3. 5 Step Program to address the New Business Environment published by the Mcilvaine Company
About the author
Robert McIlvaine is the CEO of the McIlvaine Company which publishes Industrial Valves: World Markets. He was a pollution control company executive prior to 1974 when he founded the present company. He oversees a staff of 30 people in the U.S. and China.