HCLT builds its IoT practice on experience, expertise and IP

TBR perspective

While HCL Technologies (HCLT) initially used its intellectual property (IP) to create complete solutions for its customers, it is now making available other third-party solution packages, white-labelled components and solutions for end customers, other systems integrators, and value-added resellers. The company’s partnerships with PTC and edge hardware vendors Dell Technologies and Hewlett Packard Enterprise (HPE) facilitate the delivery of integrated software and hardware solutions for engineering- and manufacturing-centric OEMs. These edge-to-cloud solutions integrate IT and operational technology (OT) data sources and are highly scalable; HCLT’s representatives estimated that they are now approximately 50% to 60% preconfigured and can be rolled out to multiple plants and locations in a pre-built factory model. Irrespective of HCLT’s decisions regarding routes to market, the company continues to create reusable IoT building blocks.

Reuse is at the heart of IoT maturity

The continual development of reusable solutions and components has always been the key to growth of information technology. In the wave of interest in IoT, starting about five years ago, the relative lack of reusable solutions and components demonstrated the immaturity of this segment. While growth has been substantial, it has not been explosive, similarly reflecting this immaturity. Technology Business Research, Inc. (TBR) estimates the current size of the IT portion of IoT at $565 billion, growing at a slightly accelerating 24.6% annual rate, and we do not anticipate growth to slow for at least five years. One driver of this acceleration is the accumulation of experience, expertise and intellectual property by vendors and customers.

Leveraging common technology and business processes across vertical divisions

Some of HCLT’s solutions, outlined here, require integration typically performed by HCLT:

  • Manufacturing: Remote Services Management, Inventory Management, Predictive Operations Monitoring, and Real-time Manufacturing Insights
  • Healthcare: Remote Patient Monitoring, Smart Clinical Trial, Medical Devices – Remote Monitoring and Servicing
  • Travel, Transportation, Logistics: Remote Asset Monitoring, Warehouse Automation, Building Automation
  • Energy and Utilities: Remote Asset Monitoring and Predictive Operations, Intelligent Linear Asset Monitoring, Active Grid Management, ADMS and AMI Testing, Distributed Grid Operations – Resilience at the Edge
  • Retail: Real-time In-store Insights, Warehouse Optimization, Cold-Chain Logistics, Supply Chain Insights

There is overlap of solutions across verticals, which reflects overlap in both business processes and relevant technologies. In keeping with IoTWorks’ orientation toward reuse, common pieces of solutions are joined to additional components to create new solutions. In the case of Real-time In-store Insights, HCLT added radar-based customer tracking hardware to keep track of customers with lower data-related costs, while improving customer privacy. HCLT Engineering designed the radar modules. An RFID-based asset tracker for end-user devices was adapted to help make sure airplanes have the full tool kit accounted for before takeoff. A similar solution applies to surgical kit tracking and compliance monitoring in hospitals.

Will algorithm patents replace economies of scale as the most critical barrier to entry?

Manufacturing scale matters less as we pivot to a knowledge economy

Economies of scale as a barrier to entry have been a fundamental precept taught for years in economics classes worldwide. Capital had to be invested ahead of being able to create value, and then people could be hired to staff the capital equipment to produce goods. Having both capital assets and existing volume gave companies a distinct competitive advantage. It drove both vertically integrated companies as well as horizontal holding company models, with the latter made famous by Jack Welch’s oversight of U.S. blue chip company General Electric.

Technology today has greatly reduced scale as a competitive advantage. Virtualization and abstraction have led to business theorists talking increasingly about asset-lite business models and asymmetric competition. Clouding this pivot is the emerging discussion around consumer scale. This is a competitive edge gained not necessarily from capital scale, but by capturing consumer brand loyalty that generates the scale. This concept is often discussed as the “force multiplier” or the network effect of the ecosystem. It is giving rise to additional new terminology, such as multi-enterprise business networks, in which partnering and the joining of complementary assets enable all participants to benefit from the aggregation of intellectual property, which is fed to the entire ecosystem of loyal customers.

Humans have the big ideas; curating those ideas into scalable advantage requires technical skills, automation and patent protection

When consumer loyalty generates cash, that cash can be deployed to fund projects, such as small-scale, smaller-dollar-volume projects akin to becoming an internal venture capital (VC) arm for any future product and service innovations. This concept manifests itself in the notion of fast failure and rapid iterations that are anathema to scaled manufacturing best practices. Being successful requires having people who are insightful about what businesses or consumers want and how to turn those wants into an automated piece of software — in short, algorithms.

As virtualization and software abstraction move the economy ever closer to utility computing, first discussed in the late 1980s by technology futurists, and as quantum nears economic advantage, the mission-critical business competency will be writing algorithms to apply against the ubiquitous data traffic being generated and stored throughout the computing utility network. Faster compute leads to faster exploration and discovery. Faster discovery leads to shorter product and service cycles and therefore shorter competitive advantage windows.

As such, algorithms that generate these new insights will increasingly become the way enterprises generate wealth, as well-skilled individuals push the limits of conventional wisdom and then deliver these new insights. Preserving that ever-shortening advantage will come from increased vigilance in protecting intellectual property. Thinking and creativity provide the advantage. We hear time and again at analyst conferences about how skills are in short supply and how people are a firm’s greatest asset. TBR expects to hear more frequently about the patent protections around these automated ideas.

Clean blockchain data fed to quantum will accelerate the value of algorithm patents

Accurate data will be available in real time for these algorithms to run against to generate real-time decision-making guidance. As automation removes more and more human toil from the economy, only individuals at the point of creation or the point of consumption will be critical to the business, with the algorithms mining the consumer demand to test against the next big idea to come from well-skilled humans and converted into competitive advantage through an automated algorithm run against real-time, accurate data.

As explored further in TBR’s Quantum Computing Market Landscape, in the quantum computing realm, where insights and actions can be obtained exponentially faster, the IP advantage is also exponentially greater. Think of the traveling salesman example that comes up regularly in quantum conversations: If a delivery company can patent an algorithm that speeds up delivery rounds and makes deliveries more efficient overall, that could swiftly create extinction events in the delivery market. If we extrapolate this, emerging technology has the potential to fundamentally alter competitive landscapes by generating faster and more accurate insights.

TBR analysts will be attending the Quantum.Tech conference Sept. 10-11 in Boston. Please contact your account executive to coordinate a conversation with TBR analysts at the event.