Hitachi combines several business units to create $4 billion digital company

Industrial giant Hitachi is best known for making electronics gadgets and heavy machinery. Its annual turnover is just under $17 billion and it employs 335,000 people worldwide. 

But the 107-year-old company is apparently taking a leaf out of its industrial rival General Electric’s book and creating a new digital business.

GE Digital is now one of the world’s top 10 software companies, and its industrial internet of things platform, Predix, has become ubiquitious. 

GE Digital made approximately $4 billion in revenue last year, and is projected to make $7 billion this year. The parent company’s total revenues are around $125 billion a year, and it has about 10 divisions.

While Hitachi cannot boast a similarly large overall revenue total, nor a high-profile digital product like Predix right now, its newly launched Lumada IoT platform is likely to be widely used within industry.

Hitachi has decided to bring together its disparate and diverse information technology departments or business units and into one integrated business unit.

The new unit will be called Hitachi Vantara, and will offer  IT applications, analytics, content, cloud, and infrastructure solutions to enterprises.

The business unit already has $4 billion in revenue and 7,000 employees, according to a report on ZDNet.com.

Vantara unifies Hitachi Data Systems, Hitachi Insight Group, and Pentaho into a single integrated business.

The key difference between industrial companies such as GE Digital and Hitachi Vantara, on the one side, and computer tech companies such as Google and Microsoft, on the other side, is that industrial companies have more physical operations, such as manufacturing and logistics.

Computer tech companies mainly deal with software, although they do have to manage and maybe even manufacture some components for data centres.

Technology used in manufacturing and logistics, as well as other industrial operations, is referred to as “operational technology”, or OT, which the converse of IT.

Together, OT and IT make for a complete, integrated digital enterprise in the industrial sector, but the process of achieving such OT-IT integration is still ongoing, with many large companies still developing the platforms and technologies required.

Vantara says it wants to “harness business, human and machine data across OT and IT environments to build comprehensive, data-driven solutions”.

This will enable its customers to “manage, store, govern, blend, analyze, and visualize data—and then take action based on uncovered insights”, adds the company.

Customers could include other industrial companies as well as computer tech companies, such as data centres.

Essentially, it’s all about data – data which was previously not collected in the industrial sector because the machines or “things” were not on the internet, but data that has quickly turned into a deluge, and which needs to be managed.

And offering data management solutions has been paying huge dividends for corporates such as GE, Siemens, Hitachi, ABB, and many other industrial businesses which have been busy rebranding themselves as “digital” businesses.

But Hitachi Vantara CEO Ryuichi Otsuki says his company has a big advantage: “No other company brings together more than a century of operational technology expertise with informational technology trusted in the world’s most demanding enterprise environments.

“Hitachi Vantara capitalizes on this unique combination by creating solutions that meet the needs of an increasingly connected world. Like our customers with whom we partner and co-create, Hitachi Vantara sees data as an opportunity – a path to outcomes that matter.”

Hitachi president and CEO Toshiaki Higashihara says: “Hitachi Vantara marks a monumental change for Hitachi as we continue to advance our unified corporate vision of social innovation.

“Hitachi has been helping customers harness the power of their data to support meaningful business action for years.

“Now as the world is being transformed by digital tools and processes, we are unifying our strongest digital solutions companies together as a new Hitachi company that delivers exponential business impact for our customers and the betterment of society.

“The formation of Hitachi Vantara underscores Hitachi’s commitment to collaborative creation with customers and partners, and being a true innovation partner for the era of IoT.”