Maciej Kranz VP of the corporate strategic innovation group at Cisco Systems

Throwing the Book at IoT

In conversation with Maciej Kranz, VP of the corporate strategic innovation group at Cisco and author of the new book Building the Internet of Things.

On television, up on the big screen, and in stereotypical real life, most men confront their midlife crisis by driving home in some new sports car.

Maciej Kranz is not most men.

No, instead of parking more horses in the garage, he wrote a book about the Internet of Things.

Kranz is VP of the corporate strategic innovation group at Cisco Systems, and has been on his own Internet of Things journey for more than a decade and a half. With so much experience helping customers develop and implement a plan to better connect their operations, and without any other practical book to guide those still wavering on how to start their own projects, he started to peck away on Sundays and during his seemingly unending flights around the world. The result, after more than two years of work and close to 1 million miles in the air is Building the Internet of Things: Implement New Business Models, Disrupt Competitors, Transform Your Industry, which blends instruction with dozens of applicable examples and case studies.

“It was important to me that the book be grounded in real-life experiences,” Kranz said. “With the case studies, I really focused on best practices, on the first projects you can start. The whole point was to not reinvent the wheel, and to learn from your peers. What are the most common mistakes your peers have made? People don’t tend to share a lot of mistakes — even successes, a lot of companies don’t feel comfortable sharing — and I thought it was important to make it practical.”

What follows is a discussion of the book (“There were lots of books that focused on technology, lots that focused on a big promise for the future, but there weren’t the practical guides that talked about minimizing the risk along the journey”), IoT in general (“We want customers to benefit from it, because it’s not just hype”), and how more companies can dive in.

IndustryWeek: So, you have now literally written the book on IoT. How did you get started in the space?

Maciej Kranz: My first, sort of, interaction with this space was many, many years ago — 2001, if I remember. Cisco and GE, we did this joint venture on the Industrial Internet, which didn’t work out, and then our next attempt was with Rockwell, and it worked out eventually.

IW: It’s changed a lot since 2001.

MK: It’s sort of fascinating, that we’re working together with Rockwell, with ABB, with Schneider. I was talking with a friend from Microsoft, we were in a session, sitting together, working together, and 10 years ago, it would have been inconceivable for us to do this. Now, we’re sitting down together, speaking the same language, hiring the same people, and it’s sort of a great story about how the industries aren’t just working together, but actually converging.

IW: And what was your inspiration to sit down and write a book about it — other than maybe wanting to share knowledge from your 30 years in tech and your 15 years in IoT?

MK: The motivation was quite simple. Obviously, we’re all believers that this opportunity is huge and that we should all be making it happened. I traveled 300,000 miles last year, to talk with customers, to get a feel for what they’re working on and how we can help. Two or three years ago, I started to look for a book that could help companies that have heard of IoT, but don’t know where to get started, don’t care much about technology — but do care about business outcomes. Is there a book I could recommend? I started looking and I couldn’t find one. There were lots of books that focused on technology, lots that focused on a big promise for the future, but there weren’t the practical guides that talked about minimizing the risk along the journey. We want customers to benefit from it, because it’s not just hype. Then someone suggested, Why don’t you write one? And that’s what I started.

It was an important balancing act. I’ve lived in the technology world, and it would be easy to just talk about the technology aspect of it. What really was needed, for people who run the plant, the field, the logistics systems, who have heard about IoT — how can they apply it and make sure they implement it right the first time?

IW: You traveled about 1 million miles over the two years and change you were working on this book.

MK: I don’t travel for the sake of travel. I travel because I think it’s important to go to the open pit mine, to see and understand the customer environment, because that’s how you can help them. It’s not just taking a generic solution and giving it to the customer. Every environment is different, every situation is different — from technology and business, to environment and culture.

IW: The case studies included in the book are really what should make it continue to stand apart from any books that might follow. Harley-Davidson was the first, and then you just included one after another.

MK: The point wasn’t to talk about, say, Harley-Davidson and how they’ve implemented IoT and reduced some process times from 18 months to two weeks, but to understand how it happened. How did the IT and OT folks get together? What were the skill sets required? What were the challenges? The outcome was important, but the lessons and the practical experiences — especially for readers — were what I was after.

IW: Out of all the case studies, all the plants you visited, were there some that jumped out? The folks there just got it and did a really good job implementing the tech?

MK: I’ll give you a couple examples. One that wasn’t a manufacturer was this ice cream shop in the middle of India. The reason I liked it is I am a big believer in hyper-local, in understanding the customer environment, the local environment, and the business case. If you think about what these guys were trying to solve — central Indian power outages, a big problem for an ice cream shop — our approach in the United States wouldn’t have worked. … They used a generic technology of remote sensing, but they implemented it in a local environment. When we talk about Harley, what I like about Harley, it was sort of a ground-up effort, five or seven folks in one plant getting together and deciding to do something about the problem. They secured the C-suite support and sort of went through the process. I also liked the basic use cases — Ford, Pepsi, Rockwell. It may sound easy coming from my world, to just connect all the devices on one network, but we all know this has been an interesting journey for manufacturers.

IW: What lessons did you learn during the reporting and writing process?

MK: If I look at some of the mining companies and predictive maintenance, it taught me a lot about this concept of not having a horizontal approach. You can have horizontal elements, and you should be leveraging horizontal platforms and elements, but you really have to understand the customer environment. The predictive maintenance solution for mining companies and transportation companies, for instance, would be very different. You really have to understand the customer environment.

IW: Were there any plants that impressed you so much that you came back to San Jose and maybe changed a little bit of the way you do things?

MK: Yeah, there were a lot of a-ha moments, to be honest, and a lot of them came from the realization that technology is just a small piece of the pie. Again, working for a technology company, we would work with IT organizations or service providers, then there would be a technology team we would interact with, usually at a very technical level. Working with organizations, I’ve realized IoT is not one market, it’s a collection of markets with specific ecosystems and cultures. Understanding that we are embarking on change management is more important than the technology.

It’s funny, coming from the technology person: the technology is in some ways easier than the change management, working with people, changing the culture, bringing organizations together within the company. Before coming to the IoT world, I was shielded from this because we were dealing with technical audiences in IT. Now that we’re working with OT and line of business, these kinds of challenges became the primary concerns we had to address.

Is Any Tech More Important Than IoT?

IW: If we do turn our attention to the tech — because you do write about tech a lot in the book — does anything come close to IoT in terms of importance to manufacturing?

MK: For me, IoT is the glue, the enabler. It’s the enabler for new value propositions, for mass customization. 3-D printing, I think, is starting to contribute to new value propositions. Drones and their use for, say, inspections and predictive capabilities, as well, are important, as is augmented reality, for training and servicing. But all of these things are enabled by everything getting connected to everything. That’s the beauty of IoT, its foundational element.

It’s so important that we work on these fundamental technologies and architectures together as an industry. One of the worries I had early on is that this opportunity will get Balkanized too quickly, that vendors will start doing what they have traditionally done and build a coalition of the willing, that there will be several different camps and we will come up with our own implementations. That’s what’s been happening in automation and manufacturing, and we saw it in the mid-1990s with the whole browser wars. So what we tried to do was to get the industry together, and we walk and work together. We’ve taken the approach of sharing everything that we know and realizing everyone will benefit. … To a large degree, folks are working together, people are thinking about the Industrial Internet Consortium and the Fog Consortium, companies from all corners are working together on a common approach.

IW: Late in the book, you wrote about the idea of being open, of not having a specialized IoT for your plan. You do that, and it normally is more affordable and you can be more interoperable.

MK: I actually believe in both. I firmly believe that you need to ground your solution in a specific environment. From a Cisco perspective, our strategy is to develop vertical solutions for our partners and customers based on horizontal components, because you have to do both. But the shift in the industry that I’ve started to see is this move from one vendor doing it all to this concept of building an ecosystem of partnerships, with each of the partners contributing what they do best.

If you think about the Rockwell example — Rockwell and Cisco — we started this bilateral relationship and the value prop of what each of us brought in was clear: we brought in IP expertise and the knowledge of how to build scalable systems, Rockwell brought relationships with a line of business and OT and an understanding of manufacturing environments. But then we started expanding and adding other partners, like Fanuc, and we started working together on a new downtime solution. Then we started expanding and building the ecosystem. The benefit is that customers get what they want, but the solution is not custom, so it’s cheaper, and it’s based on open standards. You can mix and match, and get the best-in-class components. You can keep up with technology trends, because it’s easier to change these elements with each of us driving our own road maps. It’s an advantage of cost, of timing, and of leveraging the latest technologies.

In the IT world, a lot of companies built successful businesses based on open standards, whereas in manufacturing, the tendency until recently has been to build a vertically-integrated business based on proprietary, semi-proprietary, or customized technology. The shift from closed to open, driven by IoT, is probably one of the most important aspects of an IoT transition.

IW: I have a hard time imagining someone who reads the book cover to cover isn’t on fire for the technology and its possibilities. What have the reactions been like? Have you heard from folks who say, maybe, Well, I liked it, but I don’t think this is for us?

MK: I’m going through my brain database, and I can’t think of an example of someone who has gone through the journey successfully and hasn’t been fired up and ready to go on the journey. Start small, don’t be too ambitious, get this one project in one plant going and use it to build. I’ve actually seen this exhilaration: We’ve done it, and we feel emboldened to do more.

IW: Sound advice. Any really interesting mistakes?

MK: I think I mentioned in the book, there was one project I was involved in where we worked three years together on connecting a refinery, and then we found out we were working with an advanced research group and not the production folks. We felt like we had wasted our time because we had proved the technology but we hadn’t used it as a disrupter for the business. Going through this change management with IT and OT teams, sometimes I wondered how I actually get people to talk with each other. That was the tough part.

IW: In terms of your own history, you’ve been on this journey for 15 years. I have a hard time believing you’re not fired up for IoT, too — especially after writing this book and embarking on a bit of a press tour. Seems like now you’re one of the more foremost advocates for implementing IIoT.

MK: I am, but I’m an informed advocate. If I think about, let’s say six years ago, we got together and said the time is right, because of things like line of business as a buying center, IT and OT converging, and the technology moving from proprietary to open. At that time, we believed, but we also knew we had a challenge ahead of us. Now I feel like, because we have so many examples of companies that used IoT to change and improve their business, it’s not just a vision. It’s real. It’s more exhilarating now than six years ago, because that was still promise then. What really gets me excited is to see organizations actually putting this in action and seeing, say, 5x ROI, or improving productivity by 20%, or introducing a new value proposition for customers. Then you feel like you’ve accomplished something.

IW: What’s your single biggest takeaway from the process of diving even further into IoT and writing this book?

MK: Technology is just a small part of an IoT journey. Focusing on people is probably the most important part of the journey, which is almost sort of contradictory when you think about the technology. Think about talent. I’ve seen a lot of companies change how they think about their talent, both internally — where they invest more in their workforce, move more toward constant and lifelong learning — and externally, with companies engaging more in creative ways. There are a lot of companies now working with universities to create curriculum, because it’s not just that we need more data scientists or process experts, it’s that we want them to learn the right skills for the industry. I’m also starting to see that apprenticeships are coming back — even at Cisco, we’re running a pilot — which I love, because it’s a win-win, for the student and the company.

And then the whole concept of change management, how you walk through the journey knowing you’re not just implementing technology. It is about people. It’s about change management. It’s about skills. It’s about taking people with you. Implementing technology is just a small part of it.

IW: I love trivia, and there was a great nugget in the book: Cisco debated about what to call IoT and almost picked M2M. I’m sure that name would have caught on, but it just doesn’t seem to have that same ring to it. Do you ever look back at that?

MK: Yeah, and it’s sort of funny. I was also involved in an early Wi-Fi conversation, and we never realized that Wi-Fi would become such a household term, either. In this case, I’m really glad we didn’t invent a new term. We basically just adopted the term that was coined in the late ’90s. For me, it was important that the word “Internet” was there. It was much more important to connect “Internet” and “devices.” It’s not about machines talking to machines. It’s about all sorts of devices talking to the network. It is fascinating. When you talk to service providers, they had used “M2M” for a while, and we wondered whether we should use it.

IW: It just feels like the right term.

MK: We invented IoE, too, and we’ve sort of gone back to IoT. The concept for Internet of Everything really was to say that it’s not just about connecting devices, it’s about the impact of those connections. But we didn’t want to confuse people with too many terms, so we decided to just stick with IoT.

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