Siemens and Alibaba Cloud eye Chinese IoT market

German industrial giant Siemens and cloud bigwig Alibaba Cloud have tied up to develop industrial internet of things (IoT) offerings for China’s manufacturing industry.

Siemens will make its MindSphere cloud-based IoT operating system available on Alibaba Cloud that Chinese manufacturers can use to improve operations from 2019. MindSphere supports a wide range of device and enterprise connectivity options, as well as advanced analytics.

Joe Kaeser, president and CEO of Siemens, said his firm’s “landmark deal” with Alibaba Cloud will help Chinese manufacturers unlock the potential of the industrial IoT, which incorporates machine learning and big data technologies to harness sensor data, machine-to-machine (M2M) communications and automation.

Simon Hu, Alibaba Cloud’s president, added that the partnership with Siemens will “accelerate the adoption of IoT products and services that will create industry-wide breakthroughs and progress”.

According to research from technology research and advisory firm Ecosystm, China is expected to maintain its position as the world’s largest IoT market, beating forecasts for the US and Europe.

By 2022, spending on IoT in the Asia-Pacific region will also grow at a compound annual growth rate of 7.4% to reach $177bn, accounting for almost half of worldwide spending. Manufacturing will be the largest industry segment globally, accounting for $63bn by that time.

Amid a slowing economy and rising wages, China has been pulling out all the stops to modernise its industries through programmes that promote greater digitisation in cities such as Qingdao and Chongqing.

The Chinese government is also building an industrial park in Nanchang in Jiangxi province to help China’s aerospace industry harness smart manufacturing technologies such as robotics, 3D printing and IoT.

Germany has been China’s preferred partner in industrial digitisation, with its concept of “Industry 4.0” serving as a guideline for the Chinese government, according to the Mercator Institute for China Studies.

“Germany has the advanced technology needed for Industry 4.0 and demand from China offers German sellers unique sales opportunities,” it said. “The time window is limited, though, as German firms are likely to be edged out as soon as Chinese companies close the technology gap.”

“Chinese industry will quickly become digitised in any event – if not with German assistance, then with products made by other international competitors.”