An abundance of information continues to transform industrial processes as owner/operators seek to optimize assets and make more informed decisions through investments in digital technology. For diversified industrial companies and investors, capturing greater ownership of this information through adding complementary digital solutions to their product portfolios is increasingly the key to competitive advantage and value creation
Emerging segments
There are several emerging segments where the digi-mechanical transformation is on the rise, both in challenged and high-growth markets. These include:
- Machine condition monitoring (MCM): MCM is a fast-developing digital segment across industrial markets as end-users seek to achieve 100% equipment uptime through real-time predictive maintenance
- Smart fleet: Marine, rail, and construction machinery have been slow to adopt digital. However, they are now fast-emerging segments driven by the need for information to better connect and optimize fleets and vessels
- Smart utilities: Digital investment in conventional power gen is driven by the need of owner/operators to optimise existing assets in the face of structural shifts towards renewables. Water and gas utility investment is driven by the need to better manage ageing infrastructure
- Food inspection and analysis: Digi-mechanical adoption in food processing is on the rise, driven by changing standards and evolving consumer preference
- Agritech: Agritech offers huge potential but also adoption challenges such as farmer budgets and user complexity which has limited the number of solutions that have achieved scale
Key investment considerations
There are a number of fast-growing digital technologies and information products which have achieved scale. But knowing which investment opportunities are most attractive involves consideration of several key issues, including:
- The size of the addressable opportunity
- The criticality of need
- The rate of adoption
- The ability of the technology to produce rich and accurate data
Understanding the market’s readiness to adopt and the technology’s ability to disrupt through rich, accurate and real-time information are key investment considerations. For example, in machine condition monitoring the holy grail is in-line technology which can produce accurate data on the health of machine assets, in real-time. However, to achieve accurate results the technology requires access to masses of historical data across a wide range of machinery. Without historical data, the technology has limited value-add. The true disrupters are the companies which can bring both the information and the technology together.
It is still early days for digi-industrial growth with numerous game-changing technologies in the early stages of development. Diversified industrial corporations and investors can add significant value to their product portfolios through complementary digital solutions but need to be sure the market is ready and the technology is a winner.
