The Next Wave of App Development Is Going After Big Industry. Here’s Why.
June 16, 2017
GE Reports Canada
The emergence of digital industries has created a giant, underserved software market, and developers are beginning to recognize the potential.
App developers tend to solve problems they understand from experience.
For everyday challenges like avoiding traffic jams, managing a budget, or finding the best taco place within a three-block radius, consumer “pain points” are easy to identify, because developers feel them too.
But while developers compete to make life easier for themselves and everyone else, there’s another market they tend to overlook: industrial machines. Although the challenges for industry are harder to solve, the capitalization opportunities are enormous, and the market is still underserved.
“There’s a next wave of software app development, and it’s going to go after some huge industries,” says Scott MacDonald, Co-founder & Managing Partner at McRock Capital, a venture capital investment firm headquartered in Toronto that’s focused exclusively on digital industrial technologies.
Instead of continuing to pile into the consumer space, MacDonald suggests that software developers ask themselves questions like, How can I eliminate unplanned downtime in a facility? “When you think about the dollar value for a business, it’s astronomical,” he says.
MacDonald and his co-founder Whitney Rockley founded McRock Capital in 2012 after they saw the growth of consumer apps and realized that mobile software solutions were coming for industry too. Today, they help developers and entrepreneurs get in on the action. But to do that, startups need to understand where they can plug in to the Industrial Internet-of-Things.
The What, How, and Why of IIoT
The Industrial Internet of Things comprises three main elements.
- Things: The foundation of any digital industrial tool is an asset (a machine, device, vehicle, facility, and so on). This is what you want to understand and optimize.
- Connectivity: Once you have identified the What, the How is the set of sensors and networking tools that give you the information you’ll use to build a solution.
- Analytics: Now that you have the data, you can design the Why—that is, an application equipped with machine-learning algorithms that will identify patterns in the operation of the asset and offer strategies to improve its performance.
According to MacDonald, the first two elements are becoming more and more obvious. Now we take for granted that machines can be connected, but the analytics and software app layer is still developing. And that’s where the next massive business opportunity lies.
Removing obstacles for third-party developers
Even though the prizes are big, the industrial market isn’t easy to get into. “The monetization is huge, but you can’t just walk in off the street and develop an app for big industrial companies,” MacDonald explains.
For developers to gain the insights they need to solve industrial challenges, it’s essential that they partner up with domain experts. “It really is an ecosystem play,” says MacDonald.
Industry leaders like GE play a critical role in facilitating the creation of such ecosystems. At the Customer Innovation Centre in Calgary, for example, startups join a network of other digitally-focused companies and collaborate with industry experts to refine their solutions for the specific needs of GE’s many customers.
With its Predix platform, GE also broke down another barrier for industrial app developers. The Apple and Android stores are readily accessible for creators of consumer apps, but industrial companies have often relied on proprietary systems, which makes it harder to integrate. Predix replicates the openness of the consumer app stores. “Anyone can build on the platform, including our competitors,” says Gandeephan Ganeshalingam, GE Canada’s Chief Innovation Officer.
“Predix is an open, secure platform that’s been designed specifically for industrial data and industrial security,” Ganeshalingam explains. “We are enabling the usage and adoption of the platform by partnering with smart entrepreneurs and connecting them to real use cases.”
Developing software tools for industry may not be as straightforward as it for consumers, but the opportunities are often much bigger, and many of the hurdles have been removed. The path is open if developers are willing to get connected to domain experts to show them the way.