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Mapping our Innovation Future through Ecosystems and Platform Design

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Why do we need a new innovative architecture, for mapping out the future

We are witnessing a very radical change, driven by technology, increasingly disrupting and breaking down the past traditional boundaries and market positions of many incumbent organizations. Mostly these were built so as to defend positions to achieve and maintain economic scale.

There is a new economic logic to building even greater scale through technology design, it involves greater complexity, yet its value proposition is to strive toward offering greater customer experience and satisfaction.

The solutions are valued far higher, in social and economic value. We need to recognize this is a new business model design with the arrival of engagement platforms that connect all the ecosystem of partners in its design, to gain this scale and value.

A new economic logic that gets closer to the connected customer expectations and daily needs for innovative solutions to solve, in ways far better than what are being presently being offered. Connecting technology, digital and human understanding brings radically different solutions.

A different innovative design has become paramount to these new offerings, so they can be capitalized upon, releasing this increased value creation understanding of opportunities.

The market dynamics are also changing; we are seeing greater disruption and blurring of traditional boundaries of competition, yet the reality is that innovation systems, structures and processes are badly lagging, in design and approach, to react and respond to this new dynamic.

A dynamic where the startup can undermind the established incumbent, mostly large organizations that are less nimble and agile, in radically different and dramatic ways, in short time frames, from the pilot, and testing to scaling those solutions, moving them from local to global through the power of technology applications.

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The Emerging World of Connected Industrial Ecosystems

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Whenever I seem to read about Platforms and Ecosystems, it mostly seems to relate to technology-led organizations and how they continue to connect us all up in our private lives.

As leading examples of the disruption that occurs and the connected value, we get offered the likes of Uber, Facebook, Apple, etc., all bringing new value to transform our world.

Yet, for me, the area that is shifting dramatically is where Industrial organizations are providing platform solutions to solve industrial problems. Good examples are Bosch, Siemens, GE and Schneider Electrics.

They transform their solutions and clients businesses by offering digital on top of the existing products in some awe-inspiring ways. They focus on connecting up their solutions into their client network on platforms to build the industrial internet.

The building of these platforms has prioritised specific industries to master and progressively transform their business into a digitally connected one. This seems to me to be so much harder than those like Facebook, Google or Uber.

Industrial solutions have had to deal with legacy “big time,” overcome entrenched positions or views and begin to collaborate in highly sophisticated ways, with often very demanding and sometimes sceptical clients.

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There is a growing force in Siemens MindSphere as it scales up in 2018.

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The move towards open-cloud based IoT operating systems has been significant in the past few years or so. Most major industrial companies have set about building and offering to their clients their platforms, for more open design and engineering, automation and operational work, as well as increased emphasis on maintenance and utilization.

To power this, digitalization has changed everything. The smart factory, plant, and buildings, work alongside smart products and solutions and smart business services are all in the sights of those industrial digital platform providers. The platforms-as-a-service has become essential to many industrial organizations to exploit.

I have been following a number of these in recent years and recently began to have a more specific focus on three; GE & their Predix, Bosch through their BSI and more recently Siemens and their Mindsphere. Others beginning to appear on my radar of industrial platform providers are Dassault Systèmes, Honeywell Connected Plant, Rockwell Automation and Schneider Electrics

Getting to understand Siemens MindSphere.

I had the opportunity a couple of weeks ago to be invited to the Siemens Innovation Day. I really appreciated it  The day before the main event I was included in the Industry Analysts visit to the Siemens Technology Center. We were provided a variety of insights in different presentations and demonstrations of the technology they are working upon. Mindsphere was consistent in its presence but was not as specifically focused on as I would have liked.

I put some of my thoughts down on a post “Creating the Industrial Ecosystem” about my take aways from this Siemens invite recently. I have been attempting to unravel my thinking between that that greatly impressed and the parts that still seemed to have innovation gaps to fill. MindSphere had a particular focus for me.

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We Are in the Middle of a Platform Revolution

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I was  not aware until recently that there are well over 450 providers of Platforms, all offering solutions, presently giving a very fragmenting market. Collaborators be aware!

There some substantial “biggies” that are covering the consumer market (social media ones such as Facebook) and business ones, where the growth in platforms will grow. If you break down the platform market into manufacturing, smart cities, energy, mobility, health, supply chain, retail, public services and many others, the use of IoT platforms are catching up with the consumer side.

One real growth area is the platform startup where funding seems to be strong. Cisco investments are backing a number as well as many others, seeing growing potential.

Amazon through its AWS is a clear standout for providing the platform-as-a-service. Everywhere you look today,everything is moving into a platform.

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No walled gardens in B2B platforms

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Walled Garden Illustration by David Simonds

Paul and I have noted throughout our writings on platforms and ecosystems the key differences between companies that interact primarily with consumers (B2C) and companies that interact primarily with other corporations (B2B).  This difference is especially important when we begin to think about platform dominance.

You see, Facebook interacts primarily, almost exclusively, with customers (B2C) as such it’s platform serves to provide almost the entire interaction between Facebook and its customers.  We could almost return to the days of old, when AOL was your conduit to the internet, when we talked about “walled gardens”, because that’s what many of the pure play B2C platforms are – walled gardens, meant to provide as much of the platform as possible.  Their goal is “stickiness”, attracting you and keeping you plugged into their platform, consuming their content.

On the other hand, industrial companies are definitely as engaged in platform development, but their solutions require more than one platform.

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Recapping our ecosystem and platform thoughts

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Thoughts about ecosystems and platforms

For those of you following our posts about ecosystems and platforms and their importance to innovation, this is the 30th post offering some thoughts and recaps. We thought it made sense to take a breather before pushing on to other ideas, stop and recap what we’ve been writing about, and perhaps place some of these ideas in context.

Paul Hobcraft and I first began talking about ecosystems and platforms several years ago. It became more evident that innovation is often focused too narrowly, considering only a discrete product or service as its result.

Increasingly, we believe, innovators must become first more aware of the platforms and ecosystems that exist in their markets or segments. Secondly, they must become more willing to innovate about the platform or ecosystem and eventually innovate to change or disrupt the platforms and ecosystems.

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When a platform becomes an operating system

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In the last post Paul wrote about Bosch, and its focus on the industrial internet of things (IIoT).  Bosch, GE and other industrial companies are attempting to create industry leading or at a minimum industry standard platforms to link industrial organizations and create standards, with the hope that new ecosystems and new solutions are built on top of those platforms.

Each of their goals is to capture, manage and exploit information generated from thousands of activities and sensors throughout the industrial platform.

Here we can the see opportunity and the challenges associated with an IIoT play:  building a platform and managing the data of an industrial giant means managing (and harvesting) a tremendous amount of data.

But it also means plugging into or interfacing with other systems and platforms, as none of these companies can create a holistic platform or replace all of the platforms and systems in a large company.  Bosch, GE and others can create really powerful and important platforms in sections or functions, but must integrate and share data with other platforms.  While they can create really powerful and compelling platforms, these platforms are by necessity limited to specific capabilities or functions.

Now for something completely different

Let’s examine then, the power and flexibility that an Amazon, for example has in its quest to build platforms through its AWS offerings.  First, it is focusing on business to consumer (b2c) or in many cases a category that Paul has coined:  consumer to consumer (c2c).

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