As we embark on this new year, I would like to reflect on Forrester’s 2020 IoT prediction related to new ways for old companies to do business in the digital economy. In other words, how can incumbent companies create wholly new business models based on data, digitization, cloud, and mobility – that is, digital services? You can see the specific prediction in the full Predictions 2020: The Internet of Things report and what this forecast means for Schneider Electric.
Thanks to the widespread integration of the industrial Internet of Things (IIoT), traditional industrial companies can leverage data to monitor, exchange, analyze, and deliver unprecedented value-rich insights drawn from that data. This approach can happen both at the IoT edge and in the cloud, where data analysis can go even deeper to improve energy and process efficiencies.
It’s clear that IoT’s business value is proven. And we’re past the days of “disrupt or be disrupted,” instead of facing the reality of how to make IoT integration and digitization competitive advantages in an economy teeming with startups that entered the market as digital natives. Today’s startups are digital at their core, just like my own teenagers. They’ve never had to bridge the old/analog and the new/digital here.
Pivoting for success in the digital economy
To succeed, long-standing companies must pivot — and we must do so quickly and with agility. As I said, the question is how — all the while focusing on creating frictionless ways to solve known customer problems. The answer lies in connected services. In Schneider’s own example, in addition to advanced automation technologies, we now offer OEMs such as Berto Coffee Roaster EcoStruxure™ Machine Advisor, a cloud-connected service that delivers remote monitoring capabilities for Berto’s specialized roasting machines. Connected digital services based on data give OEMs the ability to monitor their fleets of specialized machines worldwide, competitively grow their service business, and perhaps even pivot toward new business models such as machine/equipment uptime-as-a-service models.
Sustaining this shift within a collaborative ecosystem
As I recently shared with Ken Briodagh of IoT Evolution World, succeeding in the digital economy requires not just a turn toward new digital services. It also requires two major mind shifts: 1) changing the focus on technology development for technology’s sake to adopting a customer-centric approach to solving known problems and 2) branching well outside the walls of a solo company to innovate within a collaborative ecosystem. There is no single company out there today that has the complete technology stack needed to compete in the global digital economy. I would argue, too, that startups likewise need to look to partnerships with large companies to broaden their geographic and market reach.
Indeed, collaborative ecosystems are a win-win scenario. Schneider Electric Exchange is our business platform for making this pivot both possible and sustainable for us and multiple communities working to create, collaborate, and scale their innovative offers. For example, the Canadian service provider Jordan Engineering was looking for solutions to better optimize the operations of Hybrid DCS in a complex plant. Jordan found sequencer batch libraries for Hybrid DCS published by Supertech on Exchange. Similarly, Base Sistemas (a Certified Alliance SI from Spain) posted a question in the Exchange Community in order to search for a specific cybersecurity offer for a large petrochemical client in Spain. Enigmedia (technology company from Spain) responded to this question by proposing its cybersecurity offer that is published in the Exchange marketplace. The two companies contacted each other through the ecosystem, eventually leading to a transaction to solve the customer’s known problem collaboratively.
The fast-emerging data economy
As data privacy, governance, and management mature, we’re facing another major transformation enabled by data. Today, the data economy is laying down roots fast and furiously. In other words, companies are seeing the value of data not just as a byproduct of IoT but data as a product itself. With our EcoStruxure™ technologies and Schneider Electric Exchange, we provide to the customers and partners in our ecosystem the capabilities they need to monetize their data.
My own 2020 prediction? Look for the next wave of digital innovation to address the need for intuitive, agile, scalable, and open solutions co-innovated within a collaborative ecosystem such as Schneider Electric Exchange.