The Economic Impact of Cloud Technologies on the Industry 4.0 Development
This article explores the profound economic impact of cloud technologies on Industry 4.0, focusing on how these technologies are revolutionizing the industrial sector. It delves into the transformation of IT investments from capital expenditure (CAPEX) to operational expenditure (OPEX) due to cloud...
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Інститут економіки промисловості НАН України
2023
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irk-123456789-1977412024-07-06T13:56:24Z The Economic Impact of Cloud Technologies on the Industry 4.0 Development Reznikov, R. Digital Economy and Information Technologies This article explores the profound economic impact of cloud technologies on Industry 4.0, focusing on how these technologies are revolutionizing the industrial sector. It delves into the transformation of IT investments from capital expenditure (CAPEX) to operational expenditure (OPEX) due to cloud computing. This shift is making advanced digital technologies more accessible and affordable, particularly for small and medium-sized enterprises (SMEs). By reducing the need for significant upfront investments and providing scalable, pay-as-you-go solutions, cloud computing significantly enhances the return on investment (ROI) for Industry 4.0 initiatives. A comparative analysis of major cloud service providers—Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure—reveals the diverse range of services and economic benefits they offer for Industry 4.0 applications. AWS leads with comprehensive IoT and machine learning services, GCP excels in data analytics and AI capabilities, and Microsoft Azure provides robust enterprise integrations and hybrid cloud solutions. The article also addresses critical challenges such as security, compliance, and the risks associated with cloud provider lock-in. It offers strategic insights into cost management practices that can maximize the economic benefits of cloud adoption, such as leveraging multi-cloud strategies and utilizing auto-scaling and reserved instances. Furthermore, the article includes case studies from leading industrial companies like Siemens, General Electric, BMW, and ABB. These examples illustrate how cloud-based Industry 4.0 solutions enhance operational efficiency, reduce costs, and drive innovation. For instance, Siemens leverages AWS for scalable IoT solutions, GE utilizes Azure for data-driven industrial insights, and BMW employs GCP for advanced data analytics to improve manufacturing processes. In conclusion, cloud technologies are essential enablers of Industry 4.0, offering significant economic advantages and fostering innovation and efficiency. By overcoming historical barriers to entry, especially for SMEs, and providing flexible, scalable solutions, cloud computing is transforming the industrial landscape, driving growth, and facilitating the widespread adoption of advanced manufacturing technologies. Ця стаття досліджує значний економічний вплив хмарних технологій на Індустрію 4.0, зосереджуючи увагу на тому, як ці технології революціонізують промисловий сектор. Розглядається трансформація ІТ-інвестицій з капітальних витрат (CAPEX) на операційні витрати (OPEX) завдяки хмарним обчисленням. Цей зсув робить передові цифрові технології більш доступними та вигідними, особливо для малих та середніх підприємств (МСП). Зменшуючи потребу у значних початкових інвестиціях і надаючи масштабовані, платні за використання рішення, хмарні обчислення значно підвищують повернення на інвестиції (ROI) для ініціатив Індустрії 4.0. Порівняльний аналіз основних провайдерів хмарних послуг — Amazon Web Services (AWS), Google Cloud Platform (GCP) і Microsoft Azure — показує різноманітність послуг та економічних переваг, які вони пропонують для застосувань Індустрії 4.0. AWS лідирує з комплексними послугами IoT та машинного навчання, GCP відзначається можливостями аналітики даних та штучного інтелекту, а Microsoft Azure забезпечує міцну інтеграцію з підприємствами та гібридними хмарними рішеннями. У статті також розглядаються критичні виклики, такі як безпека, відповідність і ризики, пов'язані з залежністю від провайдерів. Вона пропонує стратегічні інсайти щодо практик управління витратами, які можуть максимізувати економічні переваги впровадження хмарних технологій, такі як використання багатохмарних стратегій і авто-масштабування та зарезервованих екземплярів. Крім того, стаття включає кейс-стадії провідних промислових компаній, таких як Siemens, General Electric, BMW та ABB. Ці приклади ілюструють, як хмарні рішення Індустрії 4.0 підвищують операційну ефективність, знижують витрати та сприяють інноваціям. Наприклад, Siemens використовує AWS для масштабованих рішень IoT, GE використовує Azure для отримання аналітичних даних на основі даних, а BMW використовує GCP для покращення виробничих процесів завдяки передовій аналітиці даних. На завершення, хмарні технології є важливими драйверами Індустрії 4.0, пропонуючи значні економічні переваги та сприяючи інноваціям та ефективності. Переборюючи історичні бар'єри для входу, особливо для МСП, та надаючи гнучкі, масштабовані рішення, хмарні обчислення трансформують промисловий ландшафт, стимулюючи зростання та сприяючи широкому впровадженню передових виробничих технологій. 2023 Article The Economic Impact of Cloud Technologies on the Industry 4.0 Development / R. Reznikov // Економічний вісник Донбасу. — 2023. — № 4 (74). — С. 67-74. — Бібліогр.: 16 назв. — англ. 1817-3772 DOI: https://doi.org/10.12958/1817-3772-2023-4(74)-67-74 http://dspace.nbuv.gov.ua/handle/123456789/197741 005.2:004.738.5+330.34 en Економічний вісник Донбасу Інститут економіки промисловості НАН України |
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Digital Library of Periodicals of National Academy of Sciences of Ukraine |
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DSpace DC |
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English |
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Digital Economy and Information Technologies Digital Economy and Information Technologies |
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Digital Economy and Information Technologies Digital Economy and Information Technologies Reznikov, R. The Economic Impact of Cloud Technologies on the Industry 4.0 Development Економічний вісник Донбасу |
| description |
This article explores the profound economic impact of cloud technologies on Industry 4.0, focusing on how these technologies are revolutionizing the industrial sector. It delves into the transformation of IT investments from capital expenditure (CAPEX) to operational expenditure (OPEX) due to cloud computing. This shift is making advanced digital technologies more accessible and affordable, particularly for small and medium-sized enterprises (SMEs). By reducing the need for significant upfront investments and providing scalable, pay-as-you-go solutions, cloud computing significantly enhances the return on investment (ROI) for Industry 4.0 initiatives. A comparative analysis of major cloud service providers—Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure—reveals the diverse range of services and economic benefits they offer for Industry 4.0 applications. AWS leads with comprehensive IoT and machine learning services, GCP excels in data analytics and AI capabilities, and Microsoft Azure provides robust enterprise integrations and hybrid cloud solutions. The article also addresses critical challenges such as security, compliance, and the risks associated with cloud provider lock-in. It offers strategic insights into cost management practices that can maximize the economic benefits of cloud adoption, such as leveraging multi-cloud strategies and utilizing auto-scaling and reserved instances. Furthermore, the article includes case studies from leading industrial companies like Siemens, General Electric, BMW, and ABB. These examples illustrate how cloud-based Industry 4.0 solutions enhance operational efficiency, reduce costs, and drive innovation. For instance, Siemens leverages AWS for scalable IoT solutions, GE utilizes Azure for data-driven industrial insights, and BMW employs GCP for advanced data analytics to improve manufacturing processes. In conclusion, cloud technologies are essential enablers of Industry 4.0, offering significant economic advantages and fostering innovation and efficiency. By overcoming historical barriers to entry, especially for SMEs, and providing flexible, scalable solutions, cloud computing is transforming the industrial landscape, driving growth, and facilitating the widespread adoption of advanced manufacturing technologies. |
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The Economic Impact of Cloud Technologies on the Industry 4.0 Development |
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Інститут економіки промисловості НАН України |
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The Economic Impact of Cloud Technologies on the Industry 4.0 Development / R. Reznikov // Економічний вісник Донбасу. — 2023. — № 4 (74). — С. 67-74. — Бібліогр.: 16 назв. — англ. |
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R. Reznikov
67
Економічний вісник Донбасу № 4(74), 2023
DOI: https://doi.org/10.12958/1817-3772-2023-4(74)-67-74
UDC 005.2:004.738.5+330.34
R. Reznikov,
PhD (Economics),
ORCID 0000-0001-5581-5651,
e-mail: 4724622@gmail.com,
Intellias Global Limited, Lviv
THE ECONOMIC IMPACT OF CLOUD TECHNOLOGIES
ON THE INDUSTRY 4.0 DEVELOPMENT
Introduction
Industry 4.0 represents the fourth industrial
revolution, characterized by the integration of digital
technologies such as the Internet of Things (IoT), big
data, artificial intelligence (AI), and automation into
manufacturing and other industrial processes [1; 2]. This
revolution is driving a new era of productivity,
efficiency, and innovation, allowing businesses to
optimize operations, enhance product quality, and create
new business models. The importance of Industry 4.0
lies in its potential to transform industries, making them
more responsive to market changes and customer
demands. Historically, adopting advanced IT
infrastructure for Industry 4.0 required significant
capital expenditures (CAPEX). Companies had to invest
heavily in hardware, software, and skilled personnel to
build and maintain complex IT systems. These
substantial upfront costs were a barrier for many
organizations, particularly small and medium-sized
enterprises (SMEs), limiting their ability to leverage
Industry 4.0 technologies. Cloud computing has
emerged as a game-changer in this context, offering a
more flexible and cost-effective alternative to traditional
IT infrastructure. By shifting from CAPEX to
operational expenditure (OPEX), cloud computing
allows businesses to pay for IT resources on a
subscription basis, scaling up or down as needed without
large upfront investments. This model not only reduces
financial risk but also provides access to cutting-edge
technologies and services that were previously out of
reach for many companies. Thesis statement: Cloud
technologies significantly reduce initial capital
expenditure, improve ROI, and make Industry 4.0
accessible to smaller enterprises. This shift from
CAPEX to OPEX, coupled with the scalability and
flexibility of cloud solutions, democratizes access to
Industry 4.0 innovations, enabling even small
businesses to participate in the digital transformation
and reap its economic benefits.
Literature review
A study by Ramesh Kumar Ayyasamy et al.
explores the effects of cloud computing, big data
analytics, and the Internet of Things (IoT) on the
innovation performance of manufacturing firms. It
identifies dynamic and innovation capabilities as
mediating factors, suggesting that firms can enhance
their innovation performance by effectively leveraging
these digital technologies [1]. Amuthalakshmi
Periasamy and Krishnan Umachandran discuss the
incorporation of Industry 4.0 technologies such as
augmented reality, virtual reality, and AI in the
educational sector. They emphasize that the pandemic
has accelerated the adoption of these technologies,
facilitating a more immersive and effective learning
environment. A work [4] identifies the critical factors
influencing cloud computing adoption in Industry 4.0-
based advanced manufacturing systems. It highlights the
importance of considering these factors to ensure
effective implementation and improved manufacturing
productivity. Minakshi Sharma et al. examine the role of
cloud resource management in enabling Industry 4.0.
They discuss various resource provisioning techniques,
their challenges, advantages, and performance
parameters, emphasizing the importance of efficient
resource management for Industry 4.0 success [5]. The
economic impact of cloud computing on Industry 4.0 is
significant, transforming cost structures and fostering
innovation across various sectors. Federico Etro's work
emphasizes that cloud computing allows firms to rent
computing power and storage on-demand, converting
fixed costs into variable ones and enhancing the
incentives for new business creation, which drives
investments, macroeconomic growth, job creation, and
job reallocation in the ICT sector [6; 7]. Another study
by Promise Mvelase and colleagues reviews multiple
pricing models in cloud computing, highlighting cost
savings, efficiency boosts, and the profound impact on
market structures and competition [8]. In healthcare,
Gillala Rekha and Jasti Yashaswini explore how
Industry 4.0 and cloud technologies revolutionize
eHealth by integrating IoT, fog computing, and big data,
thus enhancing the accessibility and usability of health
data [9]. Ediz �aykol focuses on the IT industry's shift
towards cloud computing, which allows firms to adapt
quickly to changing demands, minimizing costs
associated with over-provisioning and enabling them to
focus on core business objectives [10]. The reviewed
literature highlights several key insights into the
economic impact of cloud technologies on Industry 4.0
by driving cost reduction and operational efficiency
through scalability, flexibility, and reduced maintenance
costs. They enable improved collaboration and support
accelerated development cycles, fostering innovation
and faster market adaptation. However, there are notable
R. Reznikov
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Економічний вісник Донбасу № 4(74), 2023
gaps that future research can address to provide a more
comprehensive understanding. While there is a
significant focus on the immediate benefits of cloud
technologies, such as cost savings and operational
efficiency, there is a lack of detailed analysis on the
long-term economic impacts. Future studies should
investigate the sustained economic benefits and
potential drawbacks of cloud adoption over extended
periods. Many studies discuss the general advantages of
cloud technologies but fall short of providing a
comparative analysis of the leading cloud service
providers (AWS, GCP, and Microsoft Azure), which is
one of the key strategic choices for any organization
which plans to implement Industry 4.0 concepts. This is
choice would define multiyear direction of
organizational development, that is why understanding
differences, pros and cons of cloud providers is a crucial
for proper decision making. Future research should offer
detailed comparisons of these providers, focusing on
their specific offerings for Industry 4.0 and the
economic advantages they bring. There is a need for
more case studies that illustrate successful
implementations of Industry 4.0 initiatives leveraging
cloud technologies, particularly in small and medium
enterprises (SMEs). Detailed case studies can provide
valuable insights into best practices, challenges faced,
and economic outcomes. While some sectors, like
manufacturing and healthcare, are discussed, there is
limited coverage of other industries that can benefit
from Industry 4.0 and cloud technologies. Future
research should explore the economic impact of these
technologies across a wider range of sectors. The goal
of the article to show how cloud technologies could
enable to the development of Industry 4.0. Provide a
practical guidance for the organization in making the
right choice among cloud providers and show economic
value of using such technologies in scope of transaction
to Industry 4.0 concepts.
Main Part
Since the introduction of the Industry 4.0 concept,
the key blocker for its implementation was high cost.
Organizations needed to be ready to invest in hardware,
software, and changes to some of their processes and
operations, which posed a high risk and caused
significant capital expenditure. With the advent of cloud
computing and increased interest from key cloud
providers in Industry 4.0, organizations gained the
opportunity to use multiple instruments right out of the
box without creating them from scratch. This shift from
to operational expenditure enabled various
organizations, from small businesses to large
enterprises, to start implementing Industry 4.0 in their
production processes without large initial investments.
Capital Expenditure (CAPEX) refers to the funds
used by a company to acquire, upgrade, and maintain
physical assets such as property, industrial buildings, or
equipment. This type of spending is aimed at creating
future benefits and typically involves significant upfront
investment. Examples of CAPEX include purchasing
new machinery, upgrading existing facilities, or
investing in new technology infrastructure. On the other
hand, Operational Expenditure (OPEX) refers to the
ongoing costs for running a product, business, or
system. OPEX is typically shorter-term in nature and
includes expenses like rent, utilities, salaries, and
maintenance costs. These expenses are necessary for the
day-to-day functioning of a business and are often more
predictable and manageable on a regular basis. Cloud
computing fundamentally shifts IT investments from a
CAPEX model to an OPEX model. Traditionally,
businesses had to make significant CAPEX investments
to purchase hardware, software, and other IT
infrastructure components. These upfront costs were
often a barrier, especially for small and medium-sized
enterprises (SMEs), limiting their ability to adopt
advanced technologies. With cloud computing,
businesses can access computing resources over the
internet on a pay-as-you-go basis. This model allows
companies to avoid large initial investments in IT
infrastructure. Instead, they pay for the cloud services
they use, transforming these costs into OPEX. This shift
means that businesses can scale their IT resources up or
down based on demand, ensuring they only pay for the
capacity they need at any given time. The transition
from CAPEX to OPEX offers several financial benefits
for businesses:
1. Reduced initial costs by avoiding significant
upfront investments in IT infrastructure, companies can
preserve their capital for other strategic investments or
operational needs. This is particularly beneficial for
SMEs, which may have limited access to large capital
reserves.
2. Cloud services allow businesses to scale their IT
resources according to their needs. This flexibility
ensures that companies can quickly respond to market
changes without the risk of over-investment or under-
utilization of resources.
3. With the pay-as-you-go model, businesses can
better predict and manage their IT expenses. This
predictability helps in budgeting and financial planning,
as companies are not subject to the fluctuations that
come with maintaining and upgrading physical
infrastructure.
4. Shifting IT expenses to OPEX improves cash
flow by spreading costs over time. This can be
particularly advantageous for businesses with seasonal
or fluctuating demand, as they can align their IT
spending with revenue generation periods.
5. Cloud providers continuously update their
services with the latest technologies and security
measures. Businesses can benefit from these
advancements without having to invest in new hardware
or software, ensuring they remain competitive and
secure.
The transformation of IT investments from
CAPEX to OPEX through cloud computing not only
lowers barriers to adopting advanced technologies but
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Економічний вісник Донбасу № 4(74), 2023
also offers significant financial and operational benefits.
This shift enables businesses of all sizes to innovate,
scale efficiently, and manage costs more effectively,
driving overall growth and competitiveness in the digital
age. The adoption of cloud technologies in Industry 4.0
has significantly enhanced the Return on Investment
(ROI) for businesses. This improvement is primarily
due to the reduction in initial costs and the scalability of
cloud solutions. Traditional IT infrastructure required
substantial upfront capital expenditure (CAPEX) for
purchasing hardware and software, which posed a
significant barrier for many companies, especially small
and medium-sized enterprises (SMEs). Cloud
computing, however, shifts these expenses from
CAPEX to operational expenditure (OPEX). Companies
can now subscribe to cloud services on a pay-as-you-go
basis, avoiding large initial investments. This model not
only reduces financial risk but also offers the flexibility
to scale resources up or down based on demand. This
adaptability ensures that businesses can optimize their
IT spending, leading to a more efficient allocation of
resources and higher ROI. Additionally, cloud
technologies enable rapid deployment and scaling of
Industry 4.0 solutions. This speed to market allows
companies to quickly leverage new technologies,
enhancing their competitive edge and revenue potential.
The reduced initial costs and scalable nature of cloud
services contribute to substantial ROI improvements by
enabling businesses to achieve more with less financial
risk. To understand better the business case of such
implementations it was review several public case
studies.
Examples of Successful Industry 4.0
Implementations Leveraging Cloud Technologies
1. Siemens MindSphere: Siemens developed
MindSphere, an industrial IoT as a service (IaaS)
platform that uses cloud technology to connect
machines and infrastructure to the digital world. This
platform helps companies collect and analyze data from
connected devices, optimizing operations and driving
innovation. By leveraging AWS, Siemens has enabled
its customers to implement IoT solutions with lower
upfront costs and scalable options, significantly
improving ROI [11].
2. General Electric's Predix Platform: General
Electric (GE) developed Predix, a cloud-based
Industrial Internet of Things (IIoT) platform that
provides advanced analytics and machine learning
capabilities. This platform helps industrial companies
optimize their operations by leveraging real-time data.
By using cloud infrastructure, GE allows its customers
to deploy advanced technologies without substantial
CAPEX, ensuring a scalable and efficient solution that
improves ROI [12].
3. BMW's Smart Manufacturing: BMW has
integrated cloud computing into its smart manufacturing
processes, enabling real-time data collection and
analysis across its production lines. This integration has
led to significant improvements in efficiency and
productivity. By leveraging AWS, BMW quickly scales
its data processing capabilities and deploys advanced
analytics, resulting in optimized production processes
and reduced operational costs [13].
4. ABB Ability™: ABB's cloud-based suite of
solutions, ABB Ability™, enhances operational
performance and productivity. By using the cloud, ABB
provides scalable analytics and real-time insights,
allowing companies to make data-driven decisions and
optimize their industrial processes. The reduced upfront
investment and scalable nature of cloud services have
led to substantial ROI improvements for ABB's
customers [14].
These case studies illustrate how the adoption of
cloud technologies in Industry 4.0 not only lowers initial
costs but also provides the scalability and flexibility
needed to achieve higher ROI. By leveraging cloud
solutions, businesses can implement advanced
technologies more efficiently, drive innovation, and
manage costs effectively, leading to overall growth and
competitiveness.
Historical Challenges for SMEs in Adopting
Industry 4.0 Technologies:
Traditionally, implementing Industry 4.0
technologies required substantial capital investment in
advanced machinery, IoT devices, and IT infrastructure.
These high upfront costs posed a significant barrier for
SMEs, which often operate with limited financial
resources. SMEs frequently face a shortage of skilled
personnel who can manage and implement advanced
digital technologies. This skill gap hinders their ability
to adopt and fully leverage Industry 4.0 solutions. Many
traditional Industry 4.0 solutions were designed with
large-scale operations in mind, making it difficult for
SMEs to adapt these technologies to their smaller, more
variable production environments. Integrating new
Industry 4.0 technologies with existing systems and
processes can be complex and disruptive, posing a risk
for SMEs that cannot afford significant downtime or
operational disturbances.
How Cloud Technologies Lower the Barriers to
Entry:
Cloud computing shifts IT spending from capital
expenditure (CAPEX) to operational expenditure
(OPEX). This pay-as-you-go model allows SMEs to
access advanced technologies without large initial
investments, making it easier to adopt Industry 4.0
solutions. Cloud platforms offer a range of Industry 4.0
tools such as IoT management, big data analytics, and
AI services that SMEs can utilize without needing in-
house expertise. These tools are often user-friendly and
come with support services that help bridge the skill gap.
Cloud services are inherently scalable, allowing SMEs
to start small and expand their use of Industry 4.0
technologies as their needs grow. This flexibility
ensures that SMEs can tailor their technology
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Економічний вісник Донбасу № 4(74), 2023
investments to their specific requirements and business
conditions. Many cloud-based Industry 4.0 solutions are
designed to integrate seamlessly with existing systems.
This reduces the complexity and risk associated with
implementation, allowing SMEs to adopt new
technologies with minimal disruption.
As reviewed previously in the article, cloud
technologies help to reduce barriers to implementing
Industry 4.0 concepts by making it cheaper and
transferring CAPEX to OPEX. However, it is crucial for
organizations to wisely choose their cloud providers, as
each provider has its own pros and cons.
Overview of Major Cloud Providers and Their
Offerings for Industry 4.0:
Overview of AWS Services Relevant to Industry
4.0:
AWS IoT Core: This service allows devices to
connect to AWS services and other devices securely. It
enables data collection, processing, and analysis in real-
time, which is crucial for industrial applications.
AWS Greengrass: This service extends AWS to
edge devices so they can act locally on the data they
generate while still using the cloud for management,
analytics, and durable storage.
AWS Machine Learning: AWS offers a suite of
machine learning services including Amazon
SageMaker, which helps in building, training, and
deploying machine learning models at scale.
AWS Lambda: This serverless compute service
runs code in response to events and automatically
manages the compute resources required by that code,
which is useful for real-time data processing in
manufacturing.
AWS Data Lakes and Analytics: AWS
provides comprehensive data lake solutions and
analytics services such as Amazon Redshift, AWS Glue,
and Amazon Athena, enabling large-scale data
processing and insights.
Economic Benefits of AWS for Industry 4.0
Initiatives:
AWS's pay-as-you-go pricing model reduces
upfront costs and enables SMEs to adopt advanced
technologies without significant capital investment.
AWS services can scale up or down based on the
business needs, allowing companies to manage their
resources efficiently. With a broad range of services,
AWS supports innovation and flexibility in
implementing Industry 4.0 solutions.
Overview of GCP Services Relevant to Industry
4.0:
Google Cloud IoT: This fully managed service
allows for secure connection, management, and data
ingestion from globally distributed devices.
BigQuery: Google's serverless, highly scalable,
and cost-effective multi-cloud data warehouse designed
for business agility.
Google Cloud AI and Machine Learning:
Services such as AutoML, TensorFlow, and AI Platform
that provide powerful tools for building and deploying
machine learning models.
Google Kubernetes Engine (GKE): Managed
Kubernetes service for running containerized
applications, which can be useful for scalable
deployment of industrial applications.
Cloud Functions: A serverless execution
environment for building and connecting cloud services,
ideal for real-time processing needs in Industry 4.0.
Economic Advantages of GCP for Businesses:
GCP offers competitive pricing and flexible
contracts, which can be beneficial for cost management
in SMEs. With powerful analytics tools like BigQuery,
companies can gain deep insights from their data to
optimize operations. GCP's strong support for open
source technologies ensures easy integration with
existing systems and flexibility in application
development.
Overview of Microsoft Azure Services Relevant
to Industry 4.0:
Azure IoT Hub: A managed service that acts as
a central message hub for bi-directional communication
between IoT applications and the devices it manages.
Azure Machine Learning: This service
provides tools for building, training, and deploying
machine learning models quickly and easily.
Azure Digital Twins: This service enables the
creation of comprehensive digital models of physical
environments to monitor, diagnose, and optimize
industrial operations.
Azure Functions: Serverless compute service
that allows you to run event-triggered code without
managing servers, ideal for real-time industrial
applications.
Azure Data Lake and Analytics: Azure
provides scalable data storage and analytics services that
allow for large-scale data processing and insights.
Economic Impact of Using Azure for Industry
4.0 Projects:
Azure offers a highly integrated ecosystem of
services that streamline the deployment of Industry 4.0
applications. With advanced security features and
compliance certifications, Azure ensures that industrial
applications meet stringent regulatory requirements.
Azure supports hybrid deployments, allowing
companies to leverage both on-premises and cloud
resources effectively.
The major cloud providers – AWS, Google Cloud
Platform, and Microsoft Azure – offer a comprehensive
range of services (table 1) that enable businesses to
implement Industry 4.0 solutions efficiently and cost-
effectively. Their offerings help reduce initial
investment barriers, provide scalability, and enhance
innovation, making advanced industrial technologies
accessible to enterprises of all sizes.
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Економічний вісник Донбасу № 4(74), 2023
Table 1
Service Offerings Comparison
Feature /
Service
Amazon Web Services
(AWS)
Google Cloud Platform
(GCP)
Microsoft Azure
IoT Services AWS IoT Core, AWS IoT
Greengrass
Google Cloud IoT Core,
Google IoT Edge
Azure IoT Hub, Azure IoT
Edge
Machine
Learning
Amazon SageMaker, AWS
Lambda
Google Cloud AI Platform,
TensorFlow
Azure Machine Learning,
Azure Functions
Data Storage &
Analytics
Amazon S3, Amazon
Redshift, AWS Glue,
Amazon Athena
Google Cloud Storage,
BigQuery, Google Cloud
Dataflow
Azure Blob Storage, Azure
Data Lake, Azure Synapse
Analytics
Edge
Computing
AWS Greengrass Google IoT Edge Azure IoT Edge
Digital Twins AWS IoT TwinMaker Google Cloud IoT Azure Digital Twins
Integration &
APIs
AWS API Gateway, AWS
AppSync
Google Cloud Endpoints Azure API Management
Security AWS Shield, AWS IAM Google Cloud IAM, Cloud
Security Command Center
Azure Security Center, Azure
Active Directory
Source: Created by author.
One of the key factors for making the right choice
is to assess the cost of the services as the model of
pricing is different and it might be more or less relevant
for different cases.
Cost Analysis
A direct cost comparison (Table 2) is complex due
to the variable nature of cloud pricing models, which
depend on specific use cases, resource usage, and
service configurations. However, here is a high-level
overview of cost considerations for similar services:
Table 2
Cloud Services Cost Comparison
Service AWS GCP Azure
Compute (On-
Demand Instances)
Amazon EC2: $0.0464
per hour (t3.medium)
Google Compute Engine:
$0.0475 per hour (n1-
standard-1)
Azure VMs: $0.048 per hour
(B1s)
Storage (Object
Storage)
Amazon S3: $0.023 per
GB
Google Cloud Storage:
$0.020 per GB
Azure Blob Storage: $0.018
per GB
Data Transfer
(Outbound)
$0.09 per GB (first 10
TB)
$0.12 per GB (first 10 TB) $0.087 per GB (first 10 TB)
Machine Learning SageMaker: $0.10 per
hour (ml.t2.medium)
AI Platform: $0.09 per
hour (n1-standard-4)
Azure ML: $0.08 per hour
(Standard_DS11_v2)
Source: Created by author based on the [15-16].
Prices can vary based on the region and specific
configurations. For accurate pricing it is recommended
to use each provider’s cost calculator. Each of the major
cloud providers—AWS, Google Cloud Platform, and
Microsoft Azure—offers robust and comprehensive
services tailored to Industry 4.0 applications. AWS
excels in its extensive IoT and machine learning
services, GCP is noted for its advanced data analytics
capabilities, and Azure stands out for its integration with
Microsoft’s enterprise services and strong support for
hybrid cloud environments. The choice of provider will
depend on specific business needs, existing technology
stack, and long-term strategic goals of the organizations.
Conclusion
The adoption of cloud technologies is transforming
the landscape of Industry 4.0, bringing significant
economic advantages and increased operational
efficiencies to businesses of all sizes. By shifting IT
investments from capital expenditure (CAPEX) to
operational expenditure (OPEX), cloud computing has
made advanced technologies more accessible,
particularly for small and medium-sized enterprises
(SMEs). This shift enables companies to reduce initial
costs, scale resources dynamically, and improve the
return on investment (ROI) for their Industry 4.0
initiatives. Major cloud providers – Amazon Web
Services (AWS), Google Cloud Platform (GCP), and
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Економічний вісник Донбасу № 4(74), 2023
Microsoft Azure – offer comprehensive solutions that
support the implementation of Industry 4.0
technologies. Each provider brings unique strengths:
AWS excels in IoT and machine learning services, GCP
offers powerful data analytics capabilities, and Azure
provides robust integration with enterprise services and
hybrid cloud environments. The comparative analysis of
these providers highlights the versatility and depth of
services available, enabling businesses to choose the
most suitable platform for their specific needs. Despite
the benefits, there are challenges and considerations to
address. Security and compliance remain critical
concerns, requiring ongoing vigilance and adherence to
regulatory standards. The risk of vendor lock-in
necessitates strategic planning, such as adopting multi-
cloud strategies and using interoperable solutions.
Effective cost management is essential to maximize the
economic benefits of cloud adoption, with best practices
including continuous monitoring, auto-scaling, and
purchasing reserved instances for predictable
workloads. Case studies from industry leaders such as
Siemens, General Electric, BMW, and ABB illustrate
the practical benefits of cloud-based Industry 4.0
solutions, focusing on how cloud technologies can
enhance operational efficiency, reduce costs, and drive
innovation across various sectors. By leveraging cloud
platforms, businesses can implement sophisticated IoT,
machine learning, and data analytics solutions, gaining
a competitive edge in the digital economy. In
conclusion, cloud technologies are pivotal in enabling
the widespread adoption of Industry 4.0, transforming
how businesses operate and compete. By addressing
security, compliance, vendor dependence, and cost
management, companies can effectively harness the
power of the cloud to drive growth, efficiency, and
innovation in the industrial sector. A prominent
direction of future research will be an analysis of the
economic effects of integrating cloud-based Internet of
Things (IoT) solutions in Industry 4.0, focusing on cost
reductions, efficiency gains, and new business
opportunities. Also, a topic for future deep dive
investigations will be an analysis of the economic
advantages of using cloud technologies for predictive
maintenance in Industry 4.0 environments, including
cost savings and improved equipment lifespan.
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Резніков Р. Б. Економічний вплив хмарних технологій на розвиток Індустрії 4.0
Ця стаття досліджує значний економічний вплив хмарних технологій на Індустрію 4.0, зосереджуючи увагу на тому, як
ці технології революціонізують промисловий сектор. Розглядається трансформація ІТ-інвестицій з капітальних витрат
(CAPEX) на операційні витрати (OPEX) завдяки хмарним обчисленням. Цей зсув робить передові цифрові технології більш
доступними та вигідними, особливо для малих та середніх підприємств (МСП). Зменшуючи потребу у значних початкових
інвестиціях і надаючи масштабовані, платні за використання рішення, хмарні обчислення значно підвищують повернення на
інвестиції (ROI) для ініціатив Індустрії 4.0. Порівняльний аналіз основних провайдерів хмарних послуг — Amazon Web
Services (AWS), Google Cloud Platform (GCP) і Microsoft Azure — показує різноманітність послуг та економічних переваг, які
вони пропонують для застосувань Індустрії 4.0. AWS лідирує з комплексними послугами IoT та машинного навчання, GCP
відзначається можливостями аналітики даних та штучного інтелекту, а Microsoft Azure забезпечує міцну інтеграцію з
підприємствами та гібридними хмарними рішеннями. У статті також розглядаються критичні виклики, такі як безпека,
відповідність і ризики, пов'язані з залежністю від провайдерів. Вона пропонує стратегічні інсайти щодо практик управління
витратами, які можуть максимізувати економічні переваги впровадження хмарних технологій, такі як використання
багатохмарних стратегій і авто-масштабування та зарезервованих екземплярів. Крім того, стаття включає кейс-стадії
провідних промислових компаній, таких як Siemens, General Electric, BMW та ABB. Ці приклади ілюструють, як хмарні
рішення Індустрії 4.0 підвищують операційну ефективність, знижують витрати та сприяють інноваціям. Наприклад, Siemens
використовує AWS для масштабованих рішень IoT, GE використовує Azure для отримання аналітичних даних на основі даних,
а BMW використовує GCP для покращення виробничих процесів завдяки передовій аналітиці даних. На завершення, хмарні
технології є важливими драйверами Індустрії 4.0, пропонуючи значні економічні переваги та сприяючи інноваціям та
ефективності. Переборюючи історичні бар'єри для входу, особливо для МСП, та надаючи гнучкі, масштабовані рішення,
хмарні обчислення трансформують промисловий ландшафт, стимулюючи зростання та сприяючи широкому впровадженню
передових виробничих технологій.
Ключові слова: хмарні технології, Індустрія 4.0, трансформація з CAPEX на OPEX, економічний вплив, малі та середні
підприємства, ROI, провайдери хмарних послуг, цифрова трансформація.
Reznikov R. The Economic Impact of Cloud Technologies on the Industry 4.0 Development
This article explores the profound economic impact of cloud technologies on Industry 4.0, focusing on how these technologies
are revolutionizing the industrial sector. It delves into the transformation of IT investments from capital expenditure (CAPEX) to
operational expenditure (OPEX) due to cloud computing. This shift is making advanced digital technologies more accessible and
R. Reznikov
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Економічний вісник Донбасу № 4(74), 2023
affordable, particularly for small and medium-sized enterprises (SMEs). By reducing the need for significant upfront investments and
providing scalable, pay-as-you-go solutions, cloud computing significantly enhances the return on investment (ROI) for Industry 4.0
initiatives. A comparative analysis of major cloud service providers—Amazon Web Services (AWS), Google Cloud Platform (GCP),
and Microsoft Azure—reveals the diverse range of services and economic benefits they offer for Industry 4.0 applications. AWS leads
with comprehensive IoT and machine learning services, GCP excels in data analytics and AI capabilities, and Microsoft Azure provides
robust enterprise integrations and hybrid cloud solutions. The article also addresses critical challenges such as security, compliance,
and the risks associated with cloud provider lock-in. It offers strategic insights into cost management practices that can maximize the
economic benefits of cloud adoption, such as leveraging multi-cloud strategies and utilizing auto-scaling and reserved instances.
Furthermore, the article includes case studies from leading industrial companies like Siemens, General Electric, BMW, and ABB.
These examples illustrate how cloud-based Industry 4.0 solutions enhance operational efficiency, reduce costs, and drive innovation.
For instance, Siemens leverages AWS for scalable IoT solutions, GE utilizes Azure for data-driven industrial insights, and BMW
employs GCP for advanced data analytics to improve manufacturing processes. In conclusion, cloud technologies are essential enablers
of Industry 4.0, offering significant economic advantages and fostering innovation and efficiency. By overcoming historical barriers to
entry, especially for SMEs, and providing flexible, scalable solutions, cloud computing is transforming the industrial landscape, driving
growth, and facilitating the widespread adoption of advanced manufacturing technologies.
Keywords: cloud technologies, Industry 4.0, CAPEX to OPEX transformation, economic impact, small and medium-sized
enterprises, return on investment, cloud service providers, digital transformation.
Received by the editors 04.12.2023
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