Infosys LimitedINFY has joined forces with U.S.-based conglomerate General Electric Company GE and other members of the Industrial Internet Consortium ("IIC") to develop innovative Internet of Things ("IoT") offerings. Through this alliance with its peers, Infosys intends to consolidate its position in the global cloud market.
Despite this development, Infosys' shares declined 1.1% during the regular trading session on Thursday probably due to broader macroeconomic concerns.
This collaboration primarily aims at developing solutions to help manufacturers and other industrial enterprises boost their asset efficiency. Moreover, these solutions will assist in developing robust networks within design, production and field testing end-points, thereby contributing to the overall productivity of clients.
With the IoT market projected to grow at a CAGR of 26.6% during 2014-2019, this collaboration comes at the most opportune time. In order to leverage this potential, Infosys had joined IIC last May. IIC is a forum which aims at integration of organizations and technologies to drive growth in industrial Internet. Capitalizing on its solid expertise in predictive analytics, Infosys, along with other firms, were in charge of developing testbeds for the IIC consortium.
In this regard, IIC has already approved two test beds developed by Infosys, General Electric and others, namely, Asset Efficiency and Industrial Digital Thread ("IDT") testbeds. While AET is in charge of predictive management of industrial assets, IDT is responsible for intelligently linking different phases of manufacturing, namely, design, production and field testing/service, which will allow engineers to quickly detect any failure and rectify it.
IDT, developed by integrating two robust big data analytics engines, namely, GE's Predix platform and Infosys' Information Platform, will debut in the pilot project of GE Aviation. On the other hand, Asset Efficiency was showcased at GE's Minds & Machines conference.
As per IDC's market research reports, devices, connectivity and IT services will act as the three major pillars of the IoT market, which is expected to grow to $1.7 trillion in 2020 from $655.8 billion in 2014. Geographically, Asia-Pacific, North America and Europe will likely be the key regions generating majority of revenues from IoT. This bodes well for Infosys as its primary markets are present in all the three regions.
We believe growing complexity of business activities calls for innovative, cloud-based solutions to help the companies optimize costs as well as deliver better services. Though the IoT market is currently dominated by giants like Cisco Systems, Inc. CSCO and International Business Machines Corporation IBM , this Zacks Rank #3 (Hold) stock remains a major player in the Indian market.
Notably, the deal with General Electric is expected to further expand Infosys' capabilities, helping it secure higher share in the global IoT market, going forward.
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