Oleksandr Zadorozhniy On The Future of The Internet of Things (IoT), And How It May Improve Our Health & Our Lives
An Interview With David Leichner
You need a great team with whom you will share your success. It all starts and ends with knowing how to pick the right people who will share your vision, bring their own ideas and help you achieve the desired goals and results and attract investments.
The Internet of Things (IoT) is becoming more and more mainstream. Millions of people use Fitbit health trackers, Nest smart thermostats, and Ring doorbell cameras, which are early examples of IoT. These are just the tip of the iceberg when it comes to the potential commercial applications of IoT. IoT has the potential to change the way cities are run, the way our healthcare is managed, the way our cars communicate, and the way our supply chains and manufacturing are utilized. But how exactly will IoT improve our lives? How can it improve our health? What are the new IoT technologies that we should expect to see in the near future? How does one create a successful career in the IoT industry? In this interview series, we are talking to business leaders who are incorporating IoT into their business or who are developing IoT applications, who can share stories and perspectives about the future of IoT. As a part of this series, I had the pleasure of interviewing Oleksandr Zadorozhniy, CEO & Co-founder of CloEE, the champion for CNC machines management that seeks to make Industry 4.0 affordable, fast to adopt and easy to use.
Oleksandr is an international executive with 10+ years in global sales and proven experience in Industry 4.0, IoT, SaaS solutions for manufacturing and supply chains. Olexandr has managed 150 projects in the US, Canada, EU, India, Singapore, Japan, Malaysia, Turkey, and Ukraine. In 2023, working with a group of experienced IoT developers, Oleksandr launched CloEE to provide industrial enterprises with a leading IoT software-as-a-service that helps to increase overall equipment effectiveness (OEE) by an average of 20% and measure and control carbon emissions due to reducing energy consumption and minimizing the number of required machine tools. This month CloEE was presented with the People’s Choice Energy and Innovation Awards at EnergyWeek
Thank you so much for joining us in this interview series! Before we dive in. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in the IoT industry?
My career in IoT began in 2018. By that time, I was working in the Global Sales Director role at a mid-sized IT company supporting outsourcing projects while holding a degree in Aircraft Design and Management, and I wanted to do something related to airplanes or space. I saw that there was such a thing as Industry 4.0, and I figured that selling and implementing new technology might help me to work closer with the aerospace or space industry markets. So I decided to dive deeper into Industry 4.0 and start doing some projects related to manufacturing for the space industry. At that time, I already had an understanding of how production processes were set up and a knowledge of the main problem: the equipment was not working efficiently. Thanks to the time spent in the IT outsourcing business and being able to deal with the cases with similar problem statements that are related to efficiency, maintenance, etc, I knew exactly what was needed for the Industry 4.0 market. By 2018, I had various expertise from selling IT equipment and logistics processes to IT services in various industries, like retail, manufacturing, and financial sectors.
From the start of 2018, I was closely following the breakthroughs that were happening in Japan, Australia, and New Zealand in the space-related industry and with the technologies overall. There was a big interest in companies that suddenly gained visibility while trying to launch their brand new rockets (Rocket Lab, for example) and space equipment such as satellites, space rovers, etc. I thought to myself: “How can I get involved with something similar without the right background (except for my university degree) in the space tech industry?” What I realized was that Industry 4.0 is a very good bridge when you have an IT background as it enables you to enter the industrial sector, study its operations, and then get into the right industry with that background. However, Industry 4.0 turned out to be a cool thing in itself; I liked it and kept going.
Can you share the most interesting story that happened to you since you began your career?
Our first international project was with Mencast in Singapore: they were looking for a vendor that deals with Industry 4.0, because they received a grant from the government to implement such a system. They chose the company I represented after a thorough market analysis. It is quite interesting that in Singapore there is a limit on the number of employees employed as operators, so most likely a manufacturing company can only afford to work one shift. This means that the company only works eight hours a day and therefore must be very efficient. At that time, the Mencast team, working with consultants, determined that their production process was quite inefficient — people spent hours watching YouTube videos next to the machine. And in general there were problems with the processes: we have statistics that show that people would spend several hours a day on tasks unrelated to production. All of this could be solved by implementing a system that brings real-time data from the industrial machines. After implementing the system, the operations manager saw that certain machines looked like they had been in operation, while in reality the machine was idle for half a day — and he didn’t even know that before without real-time data!
Another case is from a Ukrainian industrial enterprise Magma (that unfortunately is no longer in operation since the war in Ukraine began in 2022). The enterprise implemented Industry 4.0 technology before the Covid pandemic, and by doing this, the management gained digital eyes and an ability to work remotely. When the authorities implemented restrictions on the number of people who could work at the enterprise sites, Magma’s managers were able to work remotely by relying on real-time monitoring from the machines to keep their production numbers high to satisfy the needs of their customers. The data from the machines is streamed in real time. You don’t need a manager who comes to work and sits there because they can do it from home. We enabled them to get on with their work — to reformat the processes and preserve productivity.
I also want to say that I’ve visited hundreds of factories around the world — and the problems and needs are the same everywhere.
Indian Railways has about forty shops that repair, maintain, and manufacture modern railcars. They piloted technologies that I was offering them and it was a match, since the product enabled them to satisfy their needs in industrial machine data collection. The case was as follows: there is a very large plant, and the head of the shop sits in an office twenty minutes away by car from the production site. They didn’t have a monitoring system, but had very expensive equipment — one hour of downtime of the manufacturing line could cost them up to 50,000 euros. So we helped them to implement a system based on Industrial IoT that enabled them to see any bottlenecks. Such systems help to save hours of the operators’ and managers’ time and bring to light certain patterns so as a production manager you can make sure that tomorrow this particular machine will definitely work. We installed such systems at several of their sites.
Another cool project was Shanthi Gears, where we hooked up hundreds of machines in a month. Of that number, forty were very old, over forty years old. This customer had a competitive solution on twenty of their machines, but their needs for reporting and a user-friendly interface were not covered, so we were able to offer them a product that enabled them to connect all their machines, collect data from them, and produce a decent report. The old machines were still critical in the production chain for certain operations. Old equipment is still used in many places, and implementing systems like this is about extending the life of those machines. There are many cases where they are upgrading machines by adding computers. Basically, the base was manufactured 50 or more years ago — they just added some stuff under the hood. Personally, I like stories like that. From the very start of my foray into Industry 4.0, I was hooked by the idea that it’s about making manufacturing efficient. Because, on the one hand, there’s a lot of surplus product in the world, and at the same time, a lot of quality is being lost in the different logistics and sales chains resulting in rejects and such.
I want to figure out a way to produce more, on the one hand, and to do it better and more efficiently, on the other, so as to have a global impact on the amount of carbon dioxide emissions.
Can you tell our readers about the most interesting IoT projects you are working on now?
At CloEE, we seek to disrupt Industry 4.0 by giving our customers the ability to connect their equipment en masse and quickly. Customers used to spend several months implementing the solution and it was frequently unsuccessful, in that their needs were not met. We offer the convenience of the machine monitoring cloud and a technology that makes it possible to connect the machines ten times faster. We are also working on combining the data from the machines with CO2 emissions reporting so that manufacturers can see how much carbon dioxide a particular type of equipment produces for a particular batch of products. And then they can choose how to offset those emissions, whether through buying green credits, planting trees, or investing in solar power. It’s like with the airlines and passengers — when you fly a plane, you can pay an extra two or three dollars to offset your share in the flight’s emissions. Or you can plant a tree or buy less polluting fuel. There’s always an opportunity to make some kind of contribution.
The main emissions associated with the industrial process come from the machines that use electricity, raw materials, and logistics. Today, there are digital products that enable you to calculate emissions. If an industrial machine is turned on and consuming power, even if it doesn’t produce anything, it creates emissions during its hours of downtime, one way or the other. By minimizing the machines’ downtime, we help our customers to reduce their emissions.
In general, the more data and information a company gathers, the better, because this data can support transformation and engender savings. Data is worth its weight in gold these days. You can immediately see what can be optimized and what can be used to make the necessary reductions.
In addition, we are working to ensure that the system architecture allows for a multi-tenant cloud, so that the new production sites and new enterprises can connect from anywhere in the world.
What are the three things that concern you about the IoT industry? Can you explain? What can be done to address those concerns?
There is a fear that the machine will be controlled remotely. What are we doing now? We are creating a disruption: we have combined data collection from machines with the best that the cloud has to offer — an ability to store a lot of data in a matter of seconds. And it’s interesting that on the one hand, people are often worried about collecting data in the cloud, but on the other hand, we all use such services in real life. We use banking applications and CRM systems that store data in the cloud, but businesses still fear that their equipment will be remotely managed. It should be noted that the systems of our class (real-time visibility / real-time monitoring) do not provide us with an ability to manage the equipment (there are other systems for that, called SCADA).
That said, five years ago, only 10% of enterprises were willing to take solutions from the cloud. Today, that share is more than 70%, maybe even 80%. Having lived through the pandemic, having used Microsoft Teams and other services, people have understood their convenience. Nevertheless, the overall bias still persists. For example, the digital security specialists are worried about such a factor as “exploit”: how your systems can be exploited, infected with viruses or taken out of service. There was a case in 2020–2021 when an aluminum smelter in Norway went down because they caught a computer virus and it affected production operations. There have even been cases on a state level, for example, when Ukraine’s electricity grid suffered from massive attacks on the power system. Nevertheless, IoT sensors and real-time visibility tools are indispensable and they are protected better and better these days.
However, if there is a DDoS attack on an enterprise, the attackers cannot hack CloEE’s cloud-based product. Our architecture provides clients with real value: they will not lose their data no matter the situation. It may not be a DDoS attack, but a power outage due to a natural disaster, for example. Our data is saved no matter what. As soon as the power is restored, we resume the collection of information immediately. Cloud services watch their security and invest a lot of money in it. We minimize the risk of losing customer information. At the same time, we only monitor the equipment, we have no access to proprietary information, such as what exactly is being produced.
The second fear is that such technology can replace humans. There is this vision that robots and automation will replace humans everywhere. Personally, I think of Industry 4.0 as a collaboration between man and machine. Businesses can’t afford to implement robotics on all sites, because it’s still expensive, which means that machines have to be controlled. It would take millions of dollars or euros to create a fully autonomous workshop. Accordingly, there will always be a person who serves as an interface with the machine. And we give such people a very simple but intuitive solution. I also see this solution as a contribution to workplace diversity. Anyone can analyze the data, and the jobs that were previously viewed as only fit for a man can now be done by women. The system doesn’t care about the operator’s skin color, race, or anything else.
Another thing I want to say about people. People are afraid of being monitored to see how efficient they are. But honestly, if people perform their tasks well, the company may end up paying them bonuses. That’s what happened at Magma and some other companies: they changed the incentive structure for the employees, increasing the bonuses for those who worked really well. And they implemented this system that determines the efficiency of people’s work, and enables employees to report on their work and shine light on problems. This solution enabled the company to see the problems and improve their operations and enabled the employees to showcase their results. So on the one hand there’s the fear of being watched, and on the other hand there’s the opportunity to influence the life of the company where you work. You can be the agent of change, and things like that always inspire me. It’s all a part of the Lean concept.
The main concern is that so far, 70% of projects for implementation of Industry 4.0 solutions end in failure. The process is expensive and time-consuming. People get tired and discouraged. The solutions of the last five years have not been perfect. This has led to a certain level of distrust on the part of the customers. And if they have already had a negative experience, it complicates our task of convincing them that this time around the experience will be positive. Today, according to my subjective assessment, only 30% of enterprises have implemented such solutions.
One of the main problems the industry faces is a need for more historical data that can be used to build effective IoT. The current lack of processes for collecting and storing data from individual machines not only makes it impossible to transition to the digital enterprise model in the future but also harms the manufacturers’ short-term interests.
Manufacturers often fail to see the immediate value in connecting their machines to the cloud and enabling data collection, so they put any kind of digitalization on the bottom of their list of priorities. Nonetheless, I believe that two important benefits are capable of driving faster adoption: one is boosting the overall equipment effectiveness (OEE) and the other is getting better returns on core assets. Implementing such systems also greatly improves quality control, which has a ripple effect on productivity, revenues, and worker satisfaction.
An effective digital transformation process takes 2–3 years to train AI on historical data, so the industrial sector is already lagging behind because it has been slow to adopt this technology. Often, the issue of adoption is primarily a matter of economics, and businesses put this step off into the future because of the initial cost.
Realizing that cost is such a big issue was the driving force behind the creation of CloEE. Our software helps manufacturers easily collect data on production, efficiency, CO2 emissions, and more by connecting every piece of equipment to cloud servers that assemble the information for easy perusal.
Can you help articulate to our readers a few of the ways that IoT can improve our health and improve our lives?
The management and the analysts who gather information from the equipment can drastically rethink their production processes and their costs. They are given a tool that enables them to understand the economics of production. On a global level, we improve the production process: what is produced, in what quantity and quality. And if we also collect data from the supply chains, we learn how quickly the product was delivered and at what cost — and whether the processes can be optimized. To reduce costs and maximize profits from a business perspective, IoT is just a tool for that. In the past, you could live without this tool, but I believe that today you simply can’t do without it. Large companies such as Volkswagen or Boeing require such systems from thousands of their suppliers who produce parts. Because no one wants to pay for machine downtime — for the time it takes to fix it, or for the times when the equipment is running idle because the processes are organized inefficiently. It’s a business efficiency tool. All innovations, one way or the other, are made to improve and simplify things, so there is less manual work and more time to focus on the strategic things.
The second thing is that in the future, the data you collect can be used to create an artificial intelligence that will tell you what needs to be improved. Previously, there was no uniform format for collecting manufacturing data from the equipment, unlike in the banking and financial sector, where there has always been a lot of data, and AI implementation is very active now. Today, that production data is available and in a few years it will be used to create good optimization algorithms.
Third, moving to the IoT projects helps to make the enterprise safer for humans and reduce the number of workplace accidents. If we realize that something is broken somewhere, we can make the people in that place safer in advance. Or, if we are talking about food production, we can safeguard the production itself — and through that, the consumer. If a certain mechanism fails, the system can prevent further use of those defective parts. Such systems can prevent breakdowns or inform people about them right away.
There was a case in India where the system was used by the police to understand what happened in a particular area of the shop and figure out why the operator was injured. So, the information collected from the machines can also serve as evidence. In terms of safety, we give a lot of added value.
How do you think this might change the world?
At CloEE, our focus is on industry. However, we’ve already had people who work with medical equipment wondering whether we can connect medical equipment to such systems. I would like to see some kind of protocols created that would enable you to connect smart equipment with the software. With smart equipment, you can monitor how your dental clinic is doing — if, for example, you have solar panels or some other specific equipment, and you want a tool to help you consume that information.
I think that right now they’re only connecting critical equipment (in the first iteration), and then they’re connecting secondary equipment. There are a lot of systems that are not integrated into Industry 4.0 that would be nice to integrate, so that the enterprise gets a full cycle of certain automation. Then they can implement all their processes and have some kind of single platform or a set of applications. I see an opportunity here to combine multiple applications or products into a big platform that enables the enterprise to use the whole digital layer and solve its problems.
What should be the next steps for the industry? It would be great to allow small companies like CloEE to come to an enterprise that’s already using something like the MachineMetrix solution and to do something else with that data — like creating a specific dashboard. The solution has a set of screens or dashboards, but enterprises often need custom stuff. However, it’s unlikely that a vendor — unless such a dashboard is requested by 80% of all customers — will do it because customization is always complicated and it’s hard to maintain. That said, there are programmers everywhere, and you can give them that ability to visualize the data in a way that’s useful to the enterprise. I’m talking about some kind of a cross-platform, the ability to integrate data from one system into another to enhance the effects. There can be joint collaboration on certain cases: let’s say, small players can connect more equipment than larger players, and they can partner with the latter in the collection of data.
In today’s environment, hackers break into the software running IoT devices, for ransomware, to damage brands, or for other malicious purposes. Based on your experience, what should IoT manufacturing companies do to uncover vulnerabilities in the development process to safeguard their IoT products?
Don’t trust artificial intelligence. Just kidding, of course. If you just collect data and process it, the machines won’t rebel. But yes, don’t trust artificial intelligence, so it doesn’t make decisions for you about what to produce and how to produce it, so it doesn’t start playing with how the equipment will behave. Don’t create a system that has the ability to make decisions for humans — how specific equipment should be controlled.
What I’m saying is that a smart enterprise needs smart people who can control it. Accordingly, if you go into IoT, you have to recruit a team that has a deep understanding of this process on the IT side. Today, most employees in manufacturing are people who understand the production side, but rarely understand IT. If you’re going into efficient production, you need to think about it now, because there is a staff shortage in the market — so don’t spend the profits from optimization on a new yacht, but hire good people instead. The value for the market and for the economy is that high quality labor is created.
What are your “5 Things You Need To Create A Highly Successful Career In The IoT Industry?
1. Identify the area where your product will be needed to impact the business, to bring improvements and automation. That’s why we chose a market with millions of industrial businesses. If we succeed for even a few thousand, it will be a great contribution to the manufacturing industry worldwide, helping to create new roles in plants, make improvements, and accelerate innovation.
2. Research the problems and needs of the customers in your field and create a product that can be easily adopted and implemented without much effort. IoT is any sensor that measures and transmits data, or any device that can do so. If you have a small agricultural business and need to know the humidity of the air, you probably already use some IoT sensors. If you carry temperature-sensitive food or medicine, you’ll put tags in a box or container that can measure temperature. Someone will probably put chips and sensors in your shoes to track your running speed and other measurements to supply you with data.
3. Make sure your product is visible, and promote it using as many channels as possible. I’ve seen cool products that were unable to rouse the market simply because they didn’t invest enough in proper promotion and brand awareness. There are 1,000 different IoT platforms for most industries, and we know no more than 10–100 of them.
4. Make sure that you have a great product that people will use because it solves their problems and will come back to you to buy again. Do upsells, develop new concepts. More often than not, customers are buying a service, not a specific IoT device that can transmit information. Software as a service or data as a service is a concept that will stay with us for decades. I had spent several years in IoT in logistics. From what I’ve seen, those who have been in the market for a while have focused on selling devices and failed to notice that it’s more about data collection, insight and analytics that the customers require. They want to know what, where and when is happening to their expensive cargo, they don’t really care for the device itself. The device is just an enabler.
5. You need a great team with whom you will share your success. It all starts and ends with knowing how to pick the right people who will share your vision, bring their own ideas and help you achieve the desired goals and results and attract investments.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
The 4-day work week. I think it’s very important to promote this concept around the world and have it adopted by every state/company. The level of technology is already sufficient to make the necessary automation upgrades, to engender production breakthroughs and elimination of waste/scrap, to make businesses more efficient and products more affordable. It also requires society to spend more time consuming — appliances, technology products, cultural products, welfare, etc. We can see how much time people devote to their work in different regions, but let’s be honest, how many people work because they love what they do, as opposed to how many people work for survival? I think you know the answer, even based on those around you. This concept, combined with the latest technology, will unleash the creative side of humanity, stimulate development and generally reduce the stress associated with income-generating jobs. Instead, people will be able to spend more time with family and children, develop new skills, learn new languages and start hobbies they have always dreamed of. This is quite achievable, as we can see in the post-Covid era and how people are managing certain tasks without a lot of resources.
How can our readers further follow your work online?
Please, feel free to contact me on LinkedIn.
Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.
Thank you as well. It was a pleasure to share the thoughts about our future.
About The Interviewer: David Leichner is a veteran of the Israeli high-tech industry with significant experience in the areas of cyber and security, enterprise software and communications. At Cybellum, a leading provider of Product Security Lifecycle Management, David is responsible for creating and executing the marketing strategy and managing the global marketing team that forms the foundation for Cybellum’s product and market penetration. Prior to Cybellum, David was CMO at SQream and VP Sales and Marketing at endpoint protection vendor, Cynet. David is the Chairman of the Friends of Israel and Member of the Board of Trustees of the Jerusalem Technology College. He holds a BA in Information Systems Management and an MBA in International Business from the City University of New York.
