Joining IBM, GE, Bosch, and other industrial and IT conglomerates, Hitachi Data Systems, a division of the Japanese company, has announced a product and a "Social Innovations business strategy" with the goal of getting into the Internet of things. If you're a little vague on what this means, don't fret, it seems Hitachi is too.
In a call designed to explain how Hitachi Data Systems has revamped its strategy to go from selling servers and assorted computing hardware (plus services) to selling customers the exact same things only for the Internet of things, Ravi Chalaka, vice president of worldwide solutions and social innovation marketing, had a hard time getting the point across.
Perhaps it was because of the two new announcements, one is actual computing gear and the other is an amorphous series of products under Hitachi's "Social Innovations business strategy," which is even more nebulous when you read the description. Hitachi's materials call it, "the unifying strategy across all Hitachi companies that combines rich Hitachi heritage in operational technology (OT), with its deep domain expertise in information technology (IT), advanced data analytics and data infrastructure to deliver holistic solutions that address an array of modern IT challenges in a multitude of industries."
Ugh! Basically, Hitachi is trying to say that like GE and Bosch, its business units that sell physical goods such as construction equipment and industrial products are influencing its IT business units as they develop hardware and software to connect a bunch of sensors and manage the billions of bytes of data that will ensue. Marketing fluff and confusion aside, Hitachi has some credible products in its arsenal. It has industrial credibility like GE and Bosch and the IT experience of companies like Cisco and IBM.
Chalaka noted that 20 percent of Hitachi's global R&D budget is spent trying to bring together products for industry-specific Internet of things products and services—or "social innovations"—and that equates to "hundreds of millions of dollars" spent so far. He cited Hitachi's acquisition of Pentaho, a company that handles real-time data analytics, as an example of the company's transition from data storage vendor to forward-looking Internet of things services company.
In addition to Pentaho, Hitachi has several other essential data platforms which will go up against GE's Predix platform for the Internet of things and IBM's suite of data storage and analytics products. Like many of these other vendors, Hitachi already has customers buying its data analytics products. For example, Washington D.C. and Miami police departments are using Hitachi's analytics software to collect disparate streams of data and spit out predictions that might help deploy police where they are needed before actual humans realize there's a problem brewing. Telecommunications and healthcare companies are using versions of the software as well.
Hitachi is clearly emphasizing its software and services at the expense of hardware, because that's where the value and the margins are. Call it emphasizing big data or the Internet of things, but the truth is businesses have access to gobs of cheap and readily accessible data. Now what they need are insights. The winning companies are those that will give it to them, whether they call it social innovations, the Internet of things, or the industrial Internet.