Hitachi looks to Lumada platform for IoT momentum

Hitachi is the latest Japanese technology giant aiming to position itself as a front-runner in the IoT race with its Lumada IoT Platform.

We’ve recently looked at the IoT strategies of Fujitsu and NTT Data while Softbank has also made its move with the blockbusting £24.3bn acquisition of ARM. And now Hitachi has revealed plans to invest $2.8bn in IoT, as it aims to differentiate the Lumada platform in a crowd including big names such as Predix, Watson IoT or HCP Cloud IoT.

PAC recently caught up with Hitachi to understand how it plans to compete in the fragmented IoT market. Hitachi is one of the largest tech conglomerates in the world with nearly $90bn revenue coming from range of business units, from heavyweight machinery manufacturing to financial services and consulting. It is well positioned to take the expertise from these units and fuse it into vertical-specific IoT offerings.

Hitachi believes this diversity gives it an early start in the IoT race. Unlike some of its competitors who have expertise either in IT or OT, such as IBM or GE, Hitachi straddles both worlds. The company’s IoT business has been around for a while, and it currently goes to market through its IoT-dedicated Hitachi Insight Group which incorporates a 6,000 strong workforce and generates more than $5bn a year from a portfolio that encompasses hardware, software and IT services.

The Insight Group consolidates Hitachi’s IoT-related software and IT services capabilities together and packs it into industry-specific IoT solutions built on the Lumada platform. Lumada is positioned on top of the device and connectivity management layer and aims to bring value through data processing, management and analytics. Lumada inherits these capabilities from other Hitachi businesses, including Hitachi Data Systems (HDS) and Pentaho.

For example, Hitachi Content Platform from HDS enables it to handle large amounts of unstructured data and provide content analytics. On top of that, Pentaho’s heritage in data management and integration, will certainly make a difference in its overall analytics capabilities.

Making Lumada open to integration of various types of data and technologies with a flexible infrastructure approach (on premise, public/private/hybrid cloud) will resonate well with customers that want their data on-premise, such as in the manufacturing sector.

The key focus areas for Hitachi are industrial IoT, smart energy and smart cities applications. In industrial IoT, the company has off-the-shelf predictive maintenance and optimised factory solutions designed to ensure predefined product quality. This is enabled by integration capabilities from Hitachi Consulting that helps define outcome based business models and bridges the gap between IoT solutions and ERP systems.

Smart cities is an area where Hitachi stands out from the crowd. It already has a number of offerings for improving the safety in public and private sector buildings and areas. Some of the latest efforts in the UK include work on operational efficiency improvement at London City Airport and applying IoT to provide transportation as a service for the country’s new high speed rail system. Another interesting use case is Hitachi’s work with Caterpillar on the development of connected ship solutions that can save up to $750,000 per ship per year.

PAC sees Hitachi as a very strong contender in IoT primarily thanks to its diverse IT/OT heritage and expertise boosted with premium consulting and analytics capabilities. This makes Hitachi a player capable of playing in both software and IT services elements of the IoT game.

However, Hitachi needs to secure a range of IoT partnerships for Lumada. Currently on-board are Intel, PTC, SAP and Microsoft from bigger players while big system integrators are missing for the moment. One alternative could be to explore relationships with regional or niche players and scaling up innovative solutions that could potentially lead to strategic acquisitions. The fragmented European market is certainly a fertile ground for such growth and PAC will watch Hitachi’s progress in this area with interest.