Platforms

So are you considering a new platform business model? Good luck!

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You cannot escape the discussions around platform business models. Recently I saw that 50% of all organizations are either investing or considering a new platform business model. In a report provided by the IBM Institute for Business Value, released last year called “The Incumbents Strike Back” they really encapsulated the survey work they undertook in four topics that tell a story of today, or it certainly should do.

What’s required, now more than ever, according to IBM, is the fortitude for perpetual reinvention and these four topics tell the story of why these are important:

Firstly we are all “dancing with disruption” and it is the reinventors that are finding the way to balance the existing with the designs of the future. This was described as a “balance between stability and dynamism” and exploring the forces at play.

Secondly, reinventors are placing their “trust in the journey” as they are investing in design thinking, testing the assumptions and re-orientating their organizations to engage with their customers to create deep bonds based on trust, the path to personalization.

Thirdly, the whole value is changing based on “orchestrating the future” where organizations scale differently their partner networks, reconsider their value propositions and allocate resources more on business platform designs.

Fourthly, there is a liberating for “innovation in motion” where constant experimentation, getting close to customers and delving deeper into ever-evolving ecosystems of dynamic teams and partnerships are transforming their landscape.

Two really important points for me in this short report was the pull of the platform business model shown in the visuals provided

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Are You Struggling with Technology Evolution and New Designs?

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I have been struggling with a fair amount on a repositioning within my business offering. I think firstly, that innovation has become digital innovation and that is one space I need to keep going towards. Not only in understanding all of the implications of this shift but in my own capability building, to deliver more support to this significant change we are undergoing, through so much technology connecting up all of the innovation “pieces,” from insight triggering, to final delivery of the finished design.

The other focus area is continuing to extend out my approach and understanding of the growing importance of platforms and ecosystems within a business. They form the future approach to build a thriving and sustainable business.

My questions recently have been where is my fit in this thinking or supporting platforms and ecosystems, beyond what I am presently doing?

The visual shown above is attempting to frame this for me. There are four critical aspects of platforms and ecosystems that need to be shaped. Let me explain:

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The Ability to Scale and Collaborate in Platform Thinking.

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Credit Tatiana Plakhova @ complexitygraphics.co

For no specific reason, I went a little quiet on my posts on this site recently. There was not one reason, it felt that February just slipped by.

Actually, I can partly explain it as it was partly caught up in a project that took more time than I expected.

Also partly caught up in a lot of mixed feelings that held me back, so I got a little blocked in my thinking. You do have moments like that but you eventually work through them and “something” unblocks and things start to flow again.

Suddenly in the first few days of March, like Spring arriving, it was a very different burst of energy, well actually more insights, that have kicked off my month well.

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The confusing world of IIoT platforms needs to change in 2019

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I feel 2019 will be a make or break year for the platform providers for IIoT solutions. We are getting a real sense of clarity on who is leading the pack, who is struggling to keep up and some becoming real laggards, that need to change their game dramatically to stay in the platform hunt.

Clients need to come off their fence in where to invest and make some defining I(I)oT decisions. Yet to allow this to take place we need a far greater clarity of the value and real positioning of the platform providers. We need to extract the real business value understanding and ditch all the “hype” that is drowning out the real understanding. Ditch the noise, increase the signal

When you look at this top fifteen provides you can break them out between those coming from the industrial solution providers (Siemens, Schneider Electric, Bosch, GE Digital, Hitachi) and those coming from a technology conglomerate positioning  (AWS, Microsoft) those that are well known for specialised offering in technology solutions (IBM, SAP, Oracle, Cisco, Atos) and those that give perhaps greater specialised IoT focus in their business model (Software AG, PTC,C3 IoT)

How do you choose between these for your own solutions?

One thing enterprises struggling with is who to go with, that committing too, longer-term. Let us not forget, it is not one, it is a selection of those platform providers that when combined will offer you solutions to a significant part of your solution need. Partly, the decisions considers does depend on which industry you are in, the type of solutions you are looking towards to solve, so as resolve your biggest problems in your digital transformation. Also, you have to consider the technology providers you have built a history with, often equally caught up in legacy issues, or those you determine will be best at managing your cloud and edge issues (management, storage, analysis, remote connections) going forward.

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The increasing pace of the IIoT world- don’t hold your breath.

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You certainly have to make choices in life in where you focus your energy, otherwise, it gets way to complicated. For me to learn about Ecosystems and Platforms I have chosen a “select” group of IIoT players or advisors in their field to concentrate upon. Increasingly the insights and leading knowledge seems to be less coming out of the Big Consulting firms but more from those actually operating in the Industrial world (IIoT players).

These IIoT companies are living and breathing industrial solutions to achieve the digital transformation we see coming towards us. These are companies operating at the edge, in the middle in manufacturing the physical solutions or providing or combining the software solutions and they have their heads and assets firmly in the clouds every day. and on the ground. They are actually building the new IIoT world.

These are the likes of Siemens, Bosch, GE, Schneider Electrics, ABB and a few others. Then I often take a look at those operating from their China base, to build my continued understanding of the greater (to date) B2C market and where one, specifically. takes out their ever-growing ambitions, namely Alibaba.

Then, of course, you often “drink in” the consultant’s reviews or reports on our progress on digital transformation or industry 4.0 but they are increasingly lagging the players with a real deep “skin in the game”, that  of providing their client’s real tangible solutions. The pace of building an IIoT network is accelerating. I try to keep up and “project ahead” in the limited ways I can. Everything continues to change and accelerate in providing digital IIoT solutions.

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Biting off more than we can chew can be a good thing……depending.

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I had mentioned in a related post on my other posting site that I wanted to understand a recent Siemens event.

This was partly presenting 3rd financial quarter results but more on their future course with a Vision 2020+ and its respected parts being the design that is going to take the business out further by exploiting the parts within this vision.

There was a lot to take in on limited information and understanding. View the post “A feast of opportunities for Siemens?” for my first reactions on this.

The whole expansive story around Siemens new structure announced at this event offered some of the opening details, yet it is still to be “fleshed out” later in the year, by their management.

I specifically zoomed in on the new Digital Industries (DI) structure and where it is seemingly heading. Presently this new operating group will have 78,000 employees and a business revenue of around Euro 14 billion, that contributed a profit margin of around 16% in their fiscal 2017.

The expansion of the digitalization business has a very exciting acquisition announced the day before, with the Mendix acquisition, a leader, and pioneer in the area of low-code application development platforms, where you can potentially program and deploy apps up to ten times faster. This has been one of several “pain points” for Mindsphere, the Siemens digital platform, on providing a menu of apps to support client problems, so we should see some significant improvement on this point.

This purchase of Mendix can make a significant difference and propel the platform into a new value proposition, a 2nd generation digital platform where “smart” becomes central. I will be coming back to this once I have undertaken a little more research and assumption undertaking, in the next few days, as it has some compelling value positioning for Siemens, I believe.

It was the other part of the digitalization expansion that stopped me a little. This is what I want to discuss here. Let me work it through.

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The case for changing the IIoT platform providers value proposition

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I have been reflecting recently on where we are in all the efforts, focus, and resources, that have been going into the building of our IIoT platforms. This has mainly been around the questioning of where they should fit within the needs of an ecosystem, the end outcome of our new industrial design, in my opinion, that enables digital transformation.

Let me offer up an initial case of why there is a need for a change in where we are on IIoT platforms and their current emphasis and focus on how we need to change the value equation out in the future in our solution designs and positioning of platforms, as a need to achieve. This is based on considering a greater ecosystem perspective, one that provides a sizable move towards a digital transformation we need to make.

Here I attempt to lay out the current position and suggest there is a case for change. The IIoT platform provider needs to change their value proposition urgently, in my opinion, or move along a faster evolutionary curve certainly, to get clients seeing their own value-add endgame, not just the IIoT providers race for dominating the platform space.

So let’s look at where IIoT platforms currently are, and in my related post where we might consider some changes in how we are evolving the platform story.

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The dynamics within platform business models

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Market dynamics have changed dramatically in the past few years. The concept of connected networks has been having an increasing impact on all industries and market sectors.

Specifically, the platform business model has been generating a significant dynamism that is hard to ignore recently. We are increasingly in need to scale as quickly as possible and by moving to the emphasis of platform capacity, helps this considerably.

Platforms require networks and the need to build ecosystems and the whole focus is on increasing engagement, or build this “capacity”. Connecting all this up can provide real scale. Building greater capacity, especially without adding to resources yields a greater return.

I feel the way we presently view scale, one presently linked far more to one single entity, one that is wanting to scale up their business model and that limits opportunities. I feel searching for new ‘capacity’ opens this up and takes us more towards the open, collaborative platform business model, where real growth seems to reside for our business futures.

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When is a partner not a partner?

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As I have been focusing on the Industrial platform providers like Bosch, Siemens, Schneider Electric and GE, you constantly see part of their partnership validation has been with Microsoft Azure, or Amazon and AWS or even both in some form or another. Comforting, reassuring perhaps, or is it?

Both Microsoft Azure and AWS are building their own platforms also. Where would you put your money or fee’s to join?

Now if you are offering solutions that are focused specifically on solving industry problems where do you go, sign up, pay significant fees into and learn?

Would these decisions to join a platform take you towards those within an industry, the industrial builder of platforms, that build the physical assets and increasingly defining their digital services, or the providers of the digital kit, in the form of cloud, applications, data storage and security and the base platforms? Both have value but are the offerings clear enough in value or are they still leaving many potential clients still ‘sitting on the fence,’ not sure, watching what ‘plays out’

I am not sure how those within Partnership arrangement on platforms presently separate their knowledge and contribution but with the recent “slew” of Microsft Azure announcements, I wonder who is working for whom in some of these relationships?  Is the one with the digital architecture just piggybacking on the industrialist back, so as to understand industrial problems and then bring out their own ‘stand alone’ solutions? Where does that leave the industrial platform providers like GE & Siemens if the likes of Microsoft and Amazon seperately offer their own platforms? Take a read here and let me know your thoughts, please? I want to understand the dynamics going on here a little better.

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So are clients resisting IIoT platforms- Why?

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IIoT platforms-as-a-service are gaining ground. In my first part of a two-part post, I was raising a number of questions. That questioning continues here in part two, at a deeper level. I do recommend you read the first post to place this more into the context required.

IIoT Platform providers are building new digital solutions. There are constant daily gains. A new client win here, a new contract there.

Yet the battle is one of attrition, client by client. Do you win in this approach? To gain traction, all the IIoT platform providers seem to have pressing needs to overcome massive client resistance at this present time. Platform uptake is gradual, it needs a higher depth in resolution, in the value of platforms, in their momentum. What is its value proposition to the client, the one who buys that solution? Is it still too early in their own digital transformation journey? Actually, clients are having a hard time in this and many other digital decisions.

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