Hitachi Vantara CEO Lays Out Case For Building Complete Infrastructure, Analytics, IoT Biz


Hitachi Vantara -- with its combination of data center infrastructure, business intelligence analysis capabilities, and IoT technology -- is unique in its ability to apply technology as part of customers' digital transformation.

That's the primary message from the CEOs of both Hitachi Vantara and its parent company, Japan-based Hitachi, in keynote presentations to an audience of customers and solution providers at the Hitachi Next 2018 conference, held this week in San Diego.

Hitachi President and CEO Toshiaki Higashihara said that the IT industry is facing a wave of digital transformation that brings with it great benefits as well as new challenges and opportunities.

[Related: Hitachi Combines Data Center Infrastructure, IoT, Big Data Capabilities In New Company: Hitachi Vantara]

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Those opportunities include the potential for growth, but they are mitigated by such challenges as cybersecurity and data breaches, Higashihara said. "Companies have a sense of urgency to be more innovative and move at a faster pace than ever before to fill that gap,” he said.

The wave of digitalization is greatly changing the personal and business world as digital transformation has overtaken the post-industrial revolution as a driver in society, Higashihara said.

As that has happened, Hitachi has transformed from a company which in 1910 produced its first product, a 5-horsepower induction motor, into a worldwide business with a diverse portfolio including data storage, IoT, elevators, construction machinery, power plants, medical devices, and more, he said.

"Hitachi has over 100 years of experience in OT -- operational technolog y-- and over 50 years of experience in IT," he said. "Hitachi is a very unique company which holds OT, IT, and products under one roof. This is our biggest strength, and part of our DNA."

To meet business and society needs for digital transformation, Hitachi in 2016 launched its Lumada IoT business.

Lumada is different from competing offerings in that it includes a variety of solutions for digital transformation, Higashihara said. "It can connect data, even from other platforms, and deliver the most valuable capability available to turn data into action."

Higashihara cited two examples of how Hitachi is doing that.

In the first, the company worked with the Copenhagen, Denmark Metro system to develop self-driving trains that not only required no drivers but that also automatically adjusted the train schedules depending on demand. Using IoT sensors, the Copenhagen Metro could sense the number of passengers waiting for a train and adjust the timing between trains from 5 minutes and 30 minutes.

"This technology adjusts not only the train control to reflect demand, but also contributes to energy conservation by [offering] the most efficient train operation," he said. "This is a perfect example of how Hitachi combined IoT and digital technologies such as data gathering and analysis to take on the challenge of improving social infrastructures."

The second example was that of Daikin, a Japanese air conditioner manufacturer that was trying to find a way to more efficiently transfer knowledge to new employees as a way to alleviate labor shortages, Higashihara said. Hitachi solved the challenge by using digital technology to compare and analyze the differences between experts and new employees, making it easier to transfer those skills.

Brian Householder, who earlier this year took over as CEO of Hitachi Vantara, told attendees that they are living in the most disruptive time in our lives.

"I would argue these are the most disruptive times in history," Householder said.

Businesses are looking at every part of their businesses to imagine how they can transform, better serve customers, and improve compliance, all while still making more money, Householder said. "And that is the world we're in right now," he said.

For business leaders and channel partners, this means expectations have also changed significantly, Householder said.

"Whether you're a CEO, whether you're a CIO, whether you work in the technology areas, whether you lead team of what-have-you, the expectations are radically different," he said." No longer is the CIO just there to have custodianship of the technology assets of your organization. Every company needs to leverage technology and their data to run their business. And you must transform in that particular area."

Householder said he was talking to two customers at once during a reception Tuesday evening, and asked them the disruption being caused by IoT, machine learning, artificial intelligence, and more.

"The customers had two different responses," he said. "One was, 'That's awesome,' with a big smile on his face. And the other guy said, almost at the exact same time, 'It's scary.' And it's true. That's the world that we live in."

And the pace of change is only going to increase, Householder said. The best digital leaders are actually starting to change the culture of their organizations to better embrace the disruption.

"They have to ask, how do you have the right culture and the right mindsets throughout your organization to really take advantage of this," he said. "Because what we actually see out there is that there's a whole new game being played. And that game centers around data."

Data is changing how businesses compete, Householder said.

"Said differently, those with the best data strategy will win," he said. "[And] you need to execute on those strategies. … How do we make sure you're taking advantage of what you have [when data is] the most underutilized asset in those enterprises."

A lot of businesses are concerned about the potential disruptions that are caused by startup competitors outside their own industries, Householder said.

"There's lots around innovation," he said. "[But successful businesses'] biggest competitive advantage centers around their data, if they can take advantage of it, if they can leverage that."

People and data are still the two most critical assets of any organization. But in the vast majority of companies Householder said he talks to, less than 5 percent of their data is being utilized.

"If you're worried about startups coming out and competing in your environment, how much would they love to have your data, to have access to your data, analyze it, know what you know about your customers and about the market?" he said.

One of the main barriers to innovation for many organizations are the silos they have built around their data, Householder said. Most companies have traditional IT architectures where data is created by a particular application and is stranded on a particular infrastructure, he said.

"Due to inefficiencies in your environment, you cannot move resources around without disrupting the application," he said. "You can't have that data freed up to be used elsewhere."

Many businesses are starting to implement data lakes, which Householder said is a great start. "But we still see this being a very small fraction of your overall environment.," he said.

While that may sound like a pipe dream, Hitachi Vantara is ready to help clients with their digital transformation activities, Householder said. The company has over 10,000 customers and over 2,000 partners, he said, although he did specify whether the latter includes technology partners and/or channel partners.

Among its customers are nine of the top ten banks, media and entertainment companies, and telecom companies, and six of the top ten health and life science companies, he said.

"We are trusted by some of the largest companies in the world with some of the most complex data challenges," he said. "We feel very fortunate about that. That's part of our mission, to help you succeed in today's environment."

Hitachi Vantara's primary advantage over nearly every one of its competitors is that it has experience both in the information technology and operational technology side of IoT, Householder said.

"There's no other company on the planet with the IT and OT capabilities that we have," he said. "What you usually see when people talk about IoT, if you look at the company that's talking about it, they usually have only half of the equation."

Hitachi Vantara also has an open strategy when it comes to IoT, Householder said. "I want you to be very clear: We want you to own your data," he said. "Not us. If you look out there in the marketplace, you may hear [others say] that. What I have traditionally found is that it isn't necessarily true."

Hitachi Vantara instead provides the keys to help customers unlock the value of their data, Householder said.

"If 95 percent of your environment you are not actually analyzing, how are you going to hope to change that equation," he said.

Higashihara, Householder, and other Hitachi and Hitachi Vantara executives laid out a very good vision of where they see the company going, said Chuck Strickland, strategy architect at Sirius Computer Solutions, a San Antonio, Texas-based solution provider and long-time Hitachi partner.

The Hitachi executives then walked to the other end of the digital transformation journey and showed how everything will look when it is finished, such as one presenter who could easily provision resources with a smartphone, Strickland told CRN.

"[But] what you have to put together between those two points is work that may take 18 to 24 months," he said. "It's a journey. We call IoT a journey. And clients sometimes don’t understand this because they are still buying product.”

The traditional hardware sale side is different, Strickland said.

"We used to sell products," he said. "You walk in, how many cores do you need, how much memory, how many terabytes, the speeds and feeds, the number of ports in my network, you can definitively define that, configure it. When you’re selling hardware, you don’t have to know everything about the business, but when you’ve decided to integrate digital transformation, that’s when every detail counts. That’s when you need to know what business outcomes your client is trying to achieve."

However, Strickland said, there are clients who do know that digital transformation is a long-term, professional services-based process.

"When we start doing these types of functions… I've got to know domain knowledge," he said. "If I walk into a company and they're doing manufacturing, and I've never seen a robot, or never programmed a robot, or I don't know what a manufacturing line looks like, how do I have that conversation? … I can't go from the vision to the product or the final answer without that final journey. And that journey requires me to have in-depth knowledge about your business."