IoT “Winter”: Techno-Business Strategy for a sunny future . . .

We all know of “AI winters”. The last one broke when Deep Learning (DL) appeared. It took some key enablers for DL to take off — lots of Compute and Data. IoT deployments have not grown as much as predicted a few years ago. Why? There are technology AND business reasons — BOTH need to the resolved.

Causal Digital Twin (CDT) will break the IoT Winter; it also has key enablers — easy and secure connectivity + data management and visualization (AR/VR, etc.). There are good signs that these enablers are developing fast. BUT let us not confuse enablers with the prime mover! In the IoT case, it is CDT.

CDT is a class of solutions (much like DL). For a full introductory explanation, see “Causality & Counterfactuals — Role in IoT Digital Twin” (https://www.linkedin.com/pulse/causality-counterfactuals-role-iot-digital-twin-dr-pg-madhavan/). One fully developed solution is called Multi-channel IoT Causal (MIC) digital twin. MIC digital twin is built on the theory developed by Hyvarinen and Shimizu (Hyvarinen, et al., Journal of Machine Learning Research, 1709–1731, 2010; https://www.jmlr.org/papers/v11/hyvarinen10a.html). Algorithms are available in my publications; code is available FREE to those who write a 1-pager to me (pgmad@live.com) summarizing their plan to deploy it in real life applications (EV digital twin is my favorite).

There is a compelling need for academics and corporate technologists to get involved and generate new CDT algorithms beyond those based on SVAR model! On a side note, the display output of MIC digital twin may remind some of Judea Pearl’s “causality ladder” — there is NO relation! Pearl’s ladder is about increasingly deeper levels of Causality . . .

5G purveyors (operators and equipment makers) will drive connectivity improvements — more bits on their system, more revenue; their business case is clear. So, are we out of the woods when connectivity becomes “easy as pie” and visualizations are stellar? Not even close . . . END customers are not 5G purveyors or hyperscalers (Azure, AWS, GCP).

The value proposition that the CURRENT IoT offers to END customers who are large corporations that run industrial plans and manufacturing machinery is just not compelling — they are the ones that will create the market pull; technology push will only go so far . . .

After connecting sensors and other data to an IoT system, most of the solutions today simply “threshold” the incoming data (or some ML parameters derived from them) to generate alarms for Condition Monitoring — the corresponding business value prop is Preventive Maintenance! Preventive Maintenance don’t show up on end customer CFO’s financial statement (it is buried in an Opex line-item!). Also, the dollar savings from Preventive Maintenance (a failure that did NOT happen!) is super-hard or even impossible to quantify — customer CxOs cannot visualize the value that IoT brings — all learned the hard way selling to large paper, steel, auto manufacturing corporations . . .

CDT transforms the underlying production system into a “mechanism” — a system of causally interacting parts that produce effects. Think of a Rube-Goldberg mechanism; you can see how one link causes the next to move, how each of the parts are interconnected and what may happen if one of the links is removed — in Causality literature, this is called “counterfactual” experiments.

On a plant floor with interconnected machinery, engineers with CDTs can figure out how to improve system performance by counterfactual experiments on MIC digital twin simulations using already collected data (super-important since you won’t be able to perform new “experiments” on the production floor running at full capacity!). They can figure out how to increase production volume (Gross Revenue), reduce waste (reduce COGs) and increase quality (higher per-unit price). ALL three make CFO’s Gross Margin higher — that is when IoT deployment will surge.

Business performance improvement is possible in every IoT application. Take Smart City for example: Increase smooth traffic flow (“production volume”), reduce HVAC power consumption across city high-rises (“reduce waste”) and improve air quality by reducing CO2 emission (“increase quality”).

Causal digital twin elevates value proposition of IoT from preventive maintenance to business performance improvement. When that happens, IoT will flourish!

I welcome further direct communication (pgmad@live.com) for clarifications and discussions.

Dr. PG Madhavan

https://www.linkedin.com/in/pgmad/

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