Before everyone begins to focus on the holidays, we thought we’d share CEO Russ McMeekin’s reflections on the asset management industry this year, mCloud’s place in it, and what he expects to see in 2020.
Q. Which sector experienced the fastest growth in the asset management industry this year?
One of the fastest-growing sectors adopting asset management solutions is the process industry, especially oil & gas as it undergoes digital transformation. The economy has not been kind to the oil & gas industry in recent years, and every provider is being asked to do more with less.
While the industry has been talking about implementing digital transformation for many years, I have personally been involved in digital transformation for the past two decades. In 1999, I served as Group President for Honeywell in a joint venture with Microsoft called myPlant.com, then served as co-founder of Industrial Knowledge acquired by Yokogowa in 2016, and of course am involved in digital transformation in my current role as CEO of mCloud.
I suppose it's not surprising that oil & gas providers are finally taking action. They’ve recognized that the way they've operated facilities in the past can be significantly improved with more advanced technologies such as the cloud, IoT and AI.
I believe our strategy of targeting the under-served mid-tier oil & gas facilities market with our advanced AssetCare solution is paying off. Companies are taking a closer look at how they can bring these new capabilities into their operations with subscription-based, no capex-type pricing structures that deliver immediate ROI. The good news is we’re prepared to meet their needs better than any competitor in the market.
Q. What were some of the more interesting technology trends this year?
One of the trends we noticed is that the Internet of Things (IoT) is achieving its promise of delivering inexpensive sensors so companies can have a window into the health and performance of their connected assets in a very non-intrusive way -- as simple as putting on a Fitbit to monitor your personal health. The number of ways in which people are applying AI to solve asset issues is also happening in a big way now.
From the mCloud point of view, while IoT is an important part of the equation, we know that most don't have the bandwidth to understand what all the data means. That's why we are applying AI and machine learning to make sense of all this data, whether it’s optimizing operations and maintenance (O&M) through 3D digital twins for oil & gas facilities, reducing energy use in small commercial spaces, or ensuring wind farms are generating maximum power and profits.
For years, people were far too optimistic on how soon we would be able to push some of these new technologies in asset management. Now that time has arrived and I think there’s a technology industry maxim that applies here: people tend to grossly overestimate what technology can accomplish in the short term, but grossly underestimate what it can accomplish in the long term.
Q. What are the major challenges in the asset management industry that still need to be overcome?
We are continuing to see a lot of people who still aren’t open to the idea that the world around them is changing. We encounter people all the time who still believe their jobs will never change during their careers. I think they need to be open to the fact that their business is going to change very soon and that there will be some adjustments.
On the other hand, many asset managers believe advanced technologies are going to make a difference in their industry, but they want to wait for others to adopt first. That could be a mistake for their business. In my opinion, those who stay with the traditional methods of asset management will be forced by peer comparisons and margin pressures to adopt advanced tech solutions, especially public companies who regularly face the scrutiny of financial analysts.
We also need to help people get past their concerns over the issue of security with respect to the cloud, especially those in the oil & gas industry. Microsoft has been very helpful for us here. Our cloud-based AssetCare solution was built from the ground up in Microsoft Azure for maximum data security.
While this battle has already been won in banking, healthcare and other highly regulated, data-intensive industries, the safety of physical assets understandably raises the stakes. Some people in the oil & gas industry have vowed to never put any of their asset data in the cloud, that it has to all be on-premise.
Our argument is there’s no difference between a secure off-site data center operated by Microsoft or a secure on-site data center. In fact, your data is likely much more secure with Microsoft who specializes in data protection. Also, if you're serious about ensuring business continuity, you don't want to put all your eggs in one basket. The fact is, cloud-based platforms offer redundancies and the opportunity to scale that could never be matched by an on-site data center.
Q. What is the outlook for the asset management industry in 2020?
In 2020, I think we're going to see the major oil and gas providers, as well as major property managers in the commercial building sector, marketing the integration of these advanced technologies to gain an edge over their peers. Rather than just vendors touting the benefits of AI, IoT and the cloud, these early adopters will talk about how these technologies allow them to enhance the customer experience and solve issues rather than spending their time discovering what the issues are.
Over time, we believe the technology will move to the background as these industries undergo digital transformation. It will allow staff to avoid the more tedious aspects of their jobs and focus on more strategic issues as well as help them be good stewards of the industry, leading the way on environmental and safety issues. The irony is, contrary to popular misconception, these advanced technologies will encourage more human engagement.
From our perspective, we also see oil & gas customers continuing to get onboard with 3D digital twins. We are making it easy for teams to access 3D content in the cloud from connected devices anywhere in the world. There’s no need for software installations or special hardware. I think we have all the pieces in place and that’s a game-changer and a real driver for adoption.
One example that’s here now is a 3D digital twin representation of critical process assets in Saudi Arabia with millimeter precision that can be viewed by multiple experts in Houston and from other parts of the world from a secure cloud platform.
We’ll also see more integration of smart glasses in the oil & gas industry to give O&M professionals real-time, hands-free, voice-activated access to data as well as expert support in the field to ensure the job is done right.
It will definitely be an exciting New Year for the industry and for mCloud.