In March 2017, Bosch hosted its annual internet-of-things (IoT) conference, Bosch Connected World (BCW), in Berlin. Since last year, the event has doubled in size, attracting 2,500 attendees from businesses and vendors. This jump reflects the growing interest in IoT. The number of attendees, however, also highlights the relative immaturity of IoT compared with bigger technology themes. Despite being smaller than events such as GE’s Minds + Machines or Mobile World Congress, BCW has established itself as a premier IoT event, as it has a very distinct “IoT practitioner” feel to it. We took away some key observations for IoT practitioners from the event:
To succeed in IoT, you must build and participate in open ecosystems. No vendor or end user can plan, build, and run end-to-end IoT operations that address the entire customer life cycle. This message comes through loud and clear at all the IoT events that we attend, be it IBM’s Genius of Things or GE’s Minds + Machines, and it was repeated by all the BCW speakers. The notion of coopetition was tangible, with Bosch emphasizing its partnerships with IBM, Software AG, Amazon, GE, SAP, and many more. Also noticeable was that all ecosystem participants are grappling with what it means for the shape of their business and their relationship with the customer.
I recently attended an event at which Bosch and SAP announced a major partnership to more closely align their respective cloud and software expertise around the industrial internet of things. This partnership underlines the fact that SAP and Bosch are prepared to significantly transform their respective business models to generate new value for their customers. The SAP and Bosch partnership focuses on two main items:
SAP will add SAP Hana database to Bosch IoT Cloud. Bosch customers will be able to access SAP Hana in the Bosch IoT Cloud with the goal of processing large quantities of data in near-real time. This makes it easier for Bosch’s customers to run analytics of IoT sensor data in the SAP Hana environment.
Bosch will make its IoT microservices available to SAP on SAP Hana Cloud Platform. This move will facilitate the safe connection of different devices and components, including vehicles, manufacturing machinery, and smart tools, with open platforms. Customers will benefit from a broad range of emerging services to support their business processes.
Traditional manufacturing businesses must rework the structure and culture of their organization to address rapidly changing client expectations. Bosch is a fascinating example of how a traditional manufacturing firm can successfully transition into a leading digital business. Our discussions with Bosch highlight that:
The shift from selling products to outcomes-as-a-service requires business model change. In order to sell business outcomes, Bosch combines business process expertise with technical know-how and an outside-in approach.
Digital transformation depends on successful cultural transformation. Bosch’s digital transformation is based on a fundamental cultural transformation that takes every Bosch employee and customer along.
Bosch’s software engineering division acts as a catalyst for digital transformation. Bosch believes in a central coordinating role for its software engineering division as part of the digital transformation process.