As per MarketsandMarkets’ analysis, based on its existing studies available on MarketsandMarkets™ Knowledge Store, Internet of Things (IoT) sensors, Artificial Intelligence (AI), and predictive maintenance are the top technologies (refer to Figure 1) that have the potential to change the future revenue mix of Baker Hughes (BHGE), a GE company. It is also evident from the recent joint venture agreement between BHGE and C3.ai, a California-based AI company.
FIGURE 1 REVENUE IMPACT ASSESSMENT FOR BHGE BASED ON MARKETSANDMARKETS™ EXISTING STUDIES
The AI company is led by a respected industry veteran, Tom Siebel, who created the Customer Relationship Management (CRM) market and helped Siebel Systems grow from USD 8 million to USD 1.8 billion in 5 years. With more than 100 million devices and sensors under management, C3.ai becomes a viable partner to penetrate the multi-billion Industrial IoT (IIoT) market, which is a hot bet for predictive analytics and remote monitoring solutions.
There’s no doubt that BHGE well understands the oil and gas industry and further wants to penetrate the sector with innovative solutions through this joint venture, but it need not miss out other faster growing sectors where it can offer similar solutions and tap USD 90+ billion IIoT market opportunity by 2023 (Source: MarketsandMarkets™), specially when the market share of BHGE within the oil and gas sector has been falling in the last couple of years (Source: Reuters).
MarketsandMarkets™ strongly believes that this partnership should not be restricted to target the oil and gas industry but focus on similar industrial sectors, such as power and manufacturing else a big opportunity will lapse. However, this is not going to be simple as the vendor must have a very deep understanding of the changing revenue mix of its clients, especially, in the cases where the vendor is expanding into newer business sectors.
Shekeb Naim, Associate Director – ICT Research & Consulting at MarketsandMarkets™ quotes “To tap the opportunity of IoT in Utility (electricity, water and gas) which MarketsandMarkets™ estimates to be around USD 12 billion next year (2020) growing at 25% CAGR, one must know much early what factors will change the future revenue mix of Utility customers such as Enel, EDF, Engie, Duke Energy, Messer, etc.”
FIGURE 2 USE CASES THAT WILL DISRUPT FUTURE REVENUE MIX OF UTILITY COMPANIES WILL HAVE AN IMPACT ON DIGITAL SUPPLIERS
High growth revenue streams, such as hydrogen generation, energy-as-a-service, distributed generation, grid scale battery, and floating power plants, will change the revenue mix of utility companies in the next 5 years, as they are estimated to grow at a double digit CAGR (refer to Figure 2). Hence, it has become imperative for digital vendors of energy companies such as BHGE to start preparing their solutions today to cater to their customers’ needs tomorrow.