Big Data // Big Data Analytics
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12/6/2012
12:22 PM
Chris Murphy
Chris Murphy
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Silicon Valley Needs To Get Out More

The next great technology problems to solve are out there in rail yards, power plants and farm fields. If Silicon Valley is going to drive this "Internet of things," it needs to build closer ties with companies in established industries.

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The industrial Internet, or what's more commonly called the "Internet of things," needs a new wave of innovation and invention to advance. Better analytics software, better sensors, new business models. If the Silicon Valley technology startup ecosystem is going to drive that invention, it needs to build closer ties with companies in established industries in order to understand their problems and opportunities.

Uber didn't arise because taxi companies called a conference to ask for technology to disrupt their industry. It started with three guys who had a problem calling a cab. So how do you let those "three guys" know about the everyday problems of running railroads, power plants, mines and farms?

We need ways for more people to tinker with industrial Internet problems without each industry's permission. Silicon Valley needs to figure this out, but so do established companies searching for the next wave of efficiency and revenue from technology.

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The industrial Internet promises to deliver that boost via machine-to-machine online connections -- putting sensors on equipment and infrastructure, including tractors, airplanes, electricity grids, medical systems and gas turbines, in order to collect data. Using analytical software to make sense of that data can let companies do things like predict when a jet engine part is starting to wear out and replace it long before it fails. GE recently forecast that the industrial Internet could add as much as $15 trillion in worldwide economic growth in the next 20 years.

Silicon Valley startups and venture capitalists will want their cut of that $15 trillion, but is the startup ecosystem sufficiently plugged in to these problems to work its magic?

Consider this advice from investor Paul Graham, from his recent essay on How To Get Startup Ideas, which anyone remotely interested in business innovation should read:

"The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself. The very best startup ideas tend to have three things in common: they're something the founders themselves want, that they themselves can build, and that few others realize are worth doing."

The problem isn't that these industrial Internet problems are inherently harder because they involve sophisticated equipment such as power plants and jet engines. Consumer Internet companies such as Google and Facebook, with their massive-scale database, analytical and data center technology, connect with billions of people. That's what showed us that connecting hundreds of billions of machines and making sense of the data is possible.

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The risk is that people in the traditional startup talent stream: a) don't know what industrial problems exist; b) aren't jazzed by the problems (see Graham's "something the founders themselves want"); and c) don't see a big enough opportunity in solving those problems.

You get excellent Silicon Valley perspective on this challenge from an intriguing panel discussion led by Tim O'Reilly last week at a conference GE held about the industrial Internet.

On the subject of needing to know that problems exist, EMC chief strategy officer Paul Maritz framed things this way. The first generation of Silicon Valley was plugged into enterprise IT needs and was wildly successful at automating companies' paper processes. The next generation pioneered the consumer Internet. Now the two worlds need to come together, to use the Internet to solve industry-specific problems.

But Silicon Valley lacks the deep industrial domain knowledge. "What we haven't had happen yet is the education of what does it mean to move a locomotive all the way from Long Beach to Chicago?" said DJ Patil, a former LinkedIn executive who's now data scientist in residence with the venture fund Greylock Partners.

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ChrisMurphy
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ChrisMurphy,
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12/17/2012 | 5:17:17 PM
re: Silicon Valley Needs To Get Out More
The GM of GE's software business, Jim Walsh, emailed his thoughts on this, posted below with his permission:

I particularly found interesting the comments from Paul Maritz about how first generation Silicon Valley achieved success addressing enterprise IT needs and helping automate paper processes and the next generation pioneered the consumer internet. He concluded that the two worlds need to come together now to use the Internet to solve industry-specific problems. At GE, we believe the two worlds can meet easily in what we call advanced manufacturing, which incorporates and addresses mobility, big data analytics, and workforce enablement to help manufacturers leverage technology to achieve the efficiency and productivity that competitive and market pressures are requiring of them today. This is what will truly enable manufacturers to leverage the promise of the industrial internet.
Andrew Hornback
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Andrew Hornback,
User Rank: Apprentice
12/9/2012 | 10:08:57 PM
re: Silicon Valley Needs To Get Out More
I think this is a very valid point - from what I've seen, people who work in higher end development / data analysis are, for the most part, trendy hipsters who think that with the power of the Internet, that they can work anywhere in the world and be wherever they are needed at a moment's notice.

Technology is great, and don't get me wrong, I love the fact that I can work on systems anywhere in the world as long as I've got connectivity - but it boils down to being able to not just connect with computer systems, but with people (to understand their problems) and existing processes (to understand their inherent problems). The solutions that we need, the ones that will drive the future, are the ones where all aspects are understood.

And while working out of a small office space in SoHo might make you trendy - being located there and trying to solve issues faced by a farm in Iowa or a mine in West Virginia won't give you the same ability to deliver a solution than if you were actually on-site.

Andrew Hornback
InformationWeek Contributor
moofer
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moofer,
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12/7/2012 | 9:28:35 PM
re: Silicon Valley Needs To Get Out More
I'm pretty sure that's what apps are for, and every industry has the same opportunity to take their business mobile in the same manner the companies in SV do.
Laurianne
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Laurianne,
User Rank: Author
12/7/2012 | 4:56:15 PM
re: Silicon Valley Needs To Get Out More
Young Hadoop guns would tell Maritz data analysis is being democratized as we speak. I also love the point Chris makes about about Uber. If you are a manufacturing company CIO in the Midwest, you know the problems of your industry better than the VC folks from the Valley ever will. But you also face a constant quest for talent. I recently spoke with a CIO in Western Massachusetts who has big trouble attracting developer talent away from Boston and Cambridge.He knows the problems. He wants more brains to throw at them.

Laurianne McLaughlin
InformationWeek
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