In 1947, the British government made an important move to aid Germany in rebuilding its industry. The Brits hosted an “industrial fair” (tech conference) in one of the only unbombed factories in Hanover, of Germany’s Lower Saxony. The fair was a huge international success, resulting in tens of millions of dollars in export contracts for Germany, and it has been repeated every year since. Business and tech leaders flock there to stay ahead of what’s happening in industry.

In 2011, a group of business, political, and science leaders at the Hanover Fair announced that the world was on the cusp of a fourth industrial revolution.

Let’s review the first three:

  • Industry 1: mechanization, with machines powered by water and steam
  • Industry 2: mass production, with machines powered by electricity
  • Industry 3: electronics, IT, and automated production

The fourth industry is “cyber-physical systems,” a broad term that has been further broken down by the Boston Consulting Group into nine pillars.

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#1 The cloud. As we'll see, none of the other items is feasible without it. The cloud facilitates data sharing, response time, resource allocation, and scalability.

#2 Big data and analytics. Does what you have for breakfast affect the outcome of your day? You could chart it and find out. But what about other factors: lunch, what you wear, how much sleep you got, what music you listened to in the morning? Somewhere in all that data is some information that could benefit you, but the trick is pulling it together. The same applies to your business process. Working in a world where everything your business does is interconnected and tracked through the Internet of Things (IoT), it’s possible to find correlations between early events and problems down the line that you might have missed otherwise.

#3 Autonomous robots. We call them “autonomous” because they work more or less independently of human intervention. But just as human co-workers relate to each other at a level beyond the actual work, robots can coordinate with each other through a network, sharing knowledge, and knowing when to ask for or give assistance.

#4 Simulation. Some problems are hard to anticipate before they happen—such as how the new system will affect your network congestion and your electricity and cooling costs, as well as how many resources (CPU, memory, and so on) it will divert from other parts of your organization. Before you build it, simulate it. In the cloud, of course.

#5 Horizontal and vertical system integration. If you have two departments that work together but use different systems, then they aren’t integrated. Same goes for two businesses working together. Why waste resources communicating everything that happens in the partnership via meetings, e-mails, and phone calls when the data already is what it is and can just stay where it belongs (the cloud)?

#6 The industrial IoT. We’ve come a long way since the philosophy of the assembly line where every worker did one job in isolation (industry #1). Now, assembly machines from disparate parts of the process can communicate with each other to speed things up, slow them down, anticipate problems, and plan workarounds. Even the parts of the as-yet-unassembled product will be getting in on the conversation (via the cloud).

#7 Cybersecurity. Ironically, systems that are not part of a scalable cloud solution are actually less secure. They don’t get security updates. Their access is not properly regulated by service-level agreements (SLAs). Worst of all, many organizations are still stuck in the traditional idea that data security is all about limiting access to the data. A critical feature of modern data security is about knowing when data has been tampered with or become corrupted.

#8 Additive manufacturing. In other words, 3-D printing, but with extrusion and sintering. If it’s cost-effective to manufacture a certain component on the other side of the world, you can do so in a way that is still coordinated, moment to moment, with the rest of your process back home. Also, you can essentially make things that come in complex shapes as single objects, rather than as pieces that must be assembled,thus saving time, material, and labor.

#9 Augmented reality. Train your employees in the use of physical components that actually exist far away, in space or in time. (They could be in another country, or they could be only in the concept phase.) Give your engineers a view of a broken device, far away, that they can actually walk around and see the other side of. Or show your investors a blueprint that comes to life.

Now let's take another moment to appreciate item #1: the cloud. Just try to imagine a company developing any of the technologies on this list using only equipment that they build, buy, or rent themselves. Forget it!

One of the biggest challenges to development in the digital industry is the uncertainty of scale. Will your platform be used by a few big clients or all over the globe? Will it require petabytes of data to linger in main memory, or can you be more agile? Do you need the same number of CPUs running 24/7, or will you have peak hours?

Whether you're building assembly-line robots or smart refrigerators, guess wrong on any of these questions and you've wasted millions of dollars—unless you're building your business in the cloud—in which case, you will pay only for the resources, space, and services that you use, scaling efficiently as you go.

To explore our thoughts on how the cloud game has changed and digital industrialization in general, please read the following paper:

Download & read the paper now


Digital Industrialization

Michael Bennett Cohn

Michael Bennett Cohn was head of digital product and revenue operations at Condé Nast, where he created the company's first dynamic system for digital audience cross-pollination. At a traditional boutique ad agency, he founded and ran the digital media buying team, during which time he planned and executed the digital ad campaign that launched the first Amazon Kindle. At Federated Media, where he was the first head of east coast operations, he developed and managed conversational marketing campaigns for top clients including Dell, American Express, and Kraft. He also has a master's degree in cinema-television from the University of Southern California. He lives in Brooklyn.

Michael Bennett Cohn

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