How are organizations dealing with digital transformation and especially IoT? The key has to be one where sustainable success is central.
One company that really has become fully engaged in their digital transformation is Bosch, it is well on its way to being a world-leading IoT solution company, offering its expertise, solutions, and knowledge back into its own products and through this expertise also connecting this out to others, to explore and exploit through Bosch’s platform and cloud solutions.
In focusing here specifically on Bosch, we can get a fairly detailed understanding of what challenges are being tackled to connect products, customers, manufacturers, software providers into a connected world where platforms and ecosystems come alive through technology and digital application.
It is a highly complex set of challenges to complete this digitally connected set of solutions but by studying Bosch in some detail and its approach into this, can give us a very detailed understanding as an exemplary example of what they are undertaking to take a leading position in the IIoT world, to make it fully interoperable and realizable.
This path is not for the majority as they are not as well positioned as Bosch but it does give a good understanding of the level of commitment one company has decided to take, to become a leading provider of platform services in manufacturing and smart solutions.
So why am I looking at Bosch relating to ecosystems and platforms?
Let me explain this, after a fair amount of research into them to provide a detailed (enough) understanding of why I think Bosch is a leading provider of platform digital solutions today I was impressed but will it have the ability to translate this over the long term?
Bosch is seemingly wanting to become the one-stop platform provider for manufacturing and connecting all the digital transformational needs and solutions. Can it? What does this mean, is it heading for a leading de-facto industrial platform? What will other organizations need to do in their digital transformation to sit on top of Bosch’s platform?
Bosch, are for me highly relevant in understanding all the complexity that goes into forming a platform, especially in the manufacturing world today and how they are setting about getting all the parties attracted, linking and setting the conditions for the growing participation in establishing of the ecosystem between parties that are wanted to connect.
So over a couple of detailed posts, this being the one that explains the digital evolution from the manufacturing perspective, the new dynamics needed in manufacturing, by delivering connected products and the whole translating opportunity this can bring to most industries looking to transform on the basis of the 4th Industrial Revolution, using the internet and information technology in collaborative ways. This post is attempting to put all the “context” pieces of the jigsaw together. Platforms are complex to design to attract the ‘network’ effect and resolve a host of legacy problems.
The second post (coming next) delves specifically into the what, why and how Bosch is setting about its solutions of providing a digital transformation platform. A industrial designed platform that combines both Bosch in-house experience in building connected products that work on their shop floor and how they do provide new value creation opportunities. How they are offering clients and customers highly scalable IoT solutions through their opening up this platform, with a large portfolio of ready-to-use cloud applications and solutions that will reliably manage devices, machines and the multiple gateways to connect third-party systems and services, in a comprehensive toolbox of software and technology solutions.
First- a little clarity: IoT vs IIoT- merging and blurring differences to fuse the connected world.
IoT (internet of things) is mostly about human interaction with objects (smart devices) whereas IIoT, (industrial internet of things) today, also extends this for extracting and monitors activities and conditions, as well as provides remote control functions and machine-to-machine connecting. IIoT solutions are purposefully capturing data to ‘feed’ manufacturing execution management systems for more sophisticated control of processes, extend quality and understanding, providing a series of critical results to manage as near to real-time as possible and then be potentially capable of building out new business model solutions. The difference between IoT and IIoT will become less visible as time goes by as we explore more in our homes and daily life and take that into our work.
Choosing your platform provider(s) is critical
It is what digitally connecting is about, appreciating all the differences and constraints. To get to that ‘connected difference point’ there is a very long implementation tail to understand, to learn and to recognize what and where the value lies to achieve that value creation potential. It requires a significant investment in strategic and operational design, by trial and error – no escaping this, apart from working alongside some highly trusted solution specialists.
To “simply connect” into the selected ecosystem and set about working on a common platform that allows for unprecedented levels of visibility and collaboration throughout the whole value building creation process is a panacea to just dream about. Every organization has to set about its digital transformation with practical hard work and analysis.
As we gather pace in the application of inexpensive, intelligent and connected devices that connect IoT and IIoT the recognition this comes through a significant investment in the technology interfaces, applications, and the software abilities grows and it is only going to be a few ( I think a very few) that will be able to achieve this connected world of providing a comprehensive platform. A platform concept of a one-stop shop, that can really offer customers all that is required “as a service” of infrastructure (IaaS), platform (PaaS) and software (SaaS).If not, does this mean we are going to have to ‘hop’ between multiple platforms that keep us sub-optimal?
Perhaps not, as one that is determined to be a solution provider of choice is Bosch in the manufacturing world but it is demanding work from what I can see. Can they become one of the de-facto industrial platforms for manufacturing solutions or simply contribute as one specialized platform feeding into many platforms we will need to connect our businesses? What I like about the Bosch vision, they are pushing, experimenting, sharing and exploring and are seen as a very reliable partner of choice. Will they be able to scale enough to satisfy the level of client need or complexity found in the manufacturing sector is another matter. As they form and leverage more strategic partnerships (GE Predix, PTC ThingWorx) we will see a final model emerge in the next few years.
Let’s clarify the multiple contexts first.
Firstly, getting to know Bosch if you don’t already know them.
Bosch is a private, unlisted German-based multinational with its own revenues of around 73b euros and 390,000 employees (or associates). Bosch ownership has 92% of its share capital set up as a charitable foundation by Robert Bosch Stiftung GmbH. Voting rights are held in an industrial trust and the remaining share are held by the Bosch family and by Rober Bosch GmbH. This allows it to be more forward-looking and looks to instill a more entrepreneurial ‘freedom’ to invest in greater up-front investments many others are simply not equipped to do, due to shareholder constraints and revenue earning demands, forcing that greater focus on the short-term
Bosch provides solutions for the automotive sector, home environment, industry and trade and increasingly its IoT solution set of software services. It principally operates within four business sectors based upon Mobility solutions, Industrial Technology, Consumer Goods and finally, the Energy & Building Technology Area.
Every one of us is more than likely to have Bosch in our lives, in what we use as tools, household appliances or home solutions, in control systems and the technology that supports the intelligence and interconnected parts inside other finished products. Also, Bosch is found inside much of what we ride or drive, in many manufacturing settings, in transport and logistics. So Bosch works to deliver smarter homes, smarter cities, connected mobility and connected industry.
To finish this (short) introduction, Bosch operates across around 450 subsidiaries and regional companies set up in 60 countries but covers throughout its network of Bosch providers, nearly every country of the world. It has 59,000 associates (employees) committed to research and development in 120 locations around the world, yet it is one vital component I want to explore further, the Bosch Software Innovation subsidiary, where much of the incubation work takes place, made up of around 3,000 IoT software associates. Here lies the ‘emerging core’ of Bosch for the future, its connected future. Bosch aims to deliver everything from one provider through its connected backend and software solution where sensors, software, services, security, privacy tools and data analytics are available in their platform solution for asset improvement management.
Bosch is looking very much at the future.
Bosch is managing its own digital transformation as well as building out its connectivity through intelligent and connected devices, software platforms and applications and services coming from these. Within their own products, they are about 50% web-enabled with MeMS sensors becoming the critical component for this connectivity. They continue to build their own platform, the Bosch Software IoT suite, specialize in the development of gateway software and middleware for providing the essential points of connectivity for a smarter home, connecting industry and its machines and across the mobility sectors. They continue to push out into data analysis, cloud services and making critical partnerships with others to form a ‘rich’ ecosystem of solutions.
Exploring Bosch Software Innovation (BSI) Solutions
Let’s explore this a little more here, (my next post goes into greater details), as they are an outstanding ‘leading’ example of an organization investing, exploring and experimenting in building the connected future through this ecosystem and platform thinking.
As one of the world’s established leading technology suppliers Bosch offers the ability to connect the parts or as they say “solutions for a connected life”. It works increasingly in not just providing its own products but in its customers connected cross-domain solutions be offering ways to bring these into a single focal point for enabling this connectivity. This is a huge task as this is an emerging industry, fraught with legacy problems and emerging, ever-changing technology solutions.
Bosch is regarded as a leading thought leader and has a dual strategy of pursuing this position through its “lead user” and “lead provider” status. It continues to build its strong ecosystem of partners and system integrators, based on its unique leading position in the German market in what it offers and provides in its close relationship with its customers.
Bosch continues to inform and shape the future through its participation in different forums and in its daily customer connections, leading by its own example and vested experience. Where it takes a primary ‘lead’ position is by being one of the most active participants in developing open standards, with its membership of the Industrial Internet Consortium (IIC), Arbeitskreis Industrie 4.0, M2M Alliance and the Eclipse Foundation.
Bosch is highly active in shaping the right policies, driving standards, contributing its views into developing a more open legal framework for data exchanges and ownership, in its work on IT security and its working across industry, and being a real catalyst for public and private partnerships where it enables other vendors to connect and relate to much of this foundation work. If the industry cannot establish standards then the realization of a connected world will not be fully achieved.
Bosch is leading by example – Placing the challenges into market context.
We need to break this down into three parts, each has levels of real complexity in them
Understanding what needs to be connected
“In order to use a product – generally speaking, a machine – in an Industry 4.0 environment, it has to be equipped with certain features. These include sensors, actuators, an information processing system, and customized application software. The product also requires a network interface to provide it with a wireless or wired network connection in the field.
As well as ensuring these product features are in place, it is also necessary to set up a secure remote access to enable secure communication between the machine or component in the field and the supplier’s system.
Machine manufacturers that offer this kind of product must clearly define the corresponding access rights. Any remote access must be approved by the machine operator or user, who has the ability to explicitly allow or refuse access in regard to both timing and duration. In some cases, it may also be necessary to control components or machines using actuators. In principle, it is also possible to use remote access to install software updates, configure machine parameters, and even put machines into operation. That’s why it is so important to clarify and clearly define control-level access rights. Once the required system of access rights is in place and the product is generating the required data, the task of optimizing existing services can begin”
The next step is then gaining (useful) knowledge through data analytics. As well as enabling the optimization of existing services, access to machines also opens up the possibility of collecting large quantities of data. It is important to clearly stipulate that data should be collected in order to meet the objectives in each case. Goals may include reducing maintenance costs by slashing the number of call-outs or reducing the cost of deviations in the manufacturing process, to name just two examples. The accumulated data consists of both historical and current data and forms the basis for the next step – data analytics.
It is important not to underestimate the quantity and complexity of the data acquired in the first stage. A multitude of sensors, components, and machines will typically produce enormous quantities of data, a phenomenon often referred to as big data”.
Dealing with the legacy of the existing system managing heterogeneity and diversity
“Many product vendors want to leverage device connectivity and cloud-based applications to offer new services such as predictive maintenance and usage-based billing. However, they face a problem when it comes to managing the heterogeneity of their product portfolio in the IoT. Reasons for the high level of heterogeneity include the ever-increasing number of product categories, a large number of product versions, and the constant evolution of individual products.
Building customizable IoT solutions to overcome these issues is difficult. Today most IoT solutions and applications have their roots in individual IoT projects, these solutions need to become increasingly pre-packaged or standardized over time. Current useful lifetime’s of plant and machinery might limit the ability to connect so implementation will have a long digital tail before realization in many cases.
It is the role of IoT solution vendors to start developing standard IoT solutions and selling them to multiple customers and markets, just as we have seen with ERP (enterprise resource planning), CRM (customer relationship management), PLM (product lifecycle management), and other packaged applications.
Customers need to have an easy way to customize the solution to fit their specific needs but also to have these increasingly connected to others through a convenient platform and ecosystem solution set”.
The getting ready part- preparing for comprehensive solutions for Industry 4.0
Bosch is actively working towards providing total solutions to Industry 4.0– readiness and will work across all technologies, suppliers, and applications. I think this does need to be placed in its context as it is a very highly ambitious target.
Achieving this penetration of the internet into the manufacturing sector has been dubbed the fourth industrial revolution or Industry 4.0 which I have already written about here on the emerging industry ecosystem and here on the revolution and impact of on the business future.
To quote Bosch:
“The Internet of Things offers tremendous potential for the manufacturing industry. Machines, systems, products, ICT systems, and people can be progressively connected over the internet, creating a production network in which information carriers communicate with each other and exchange data and information in near real-time.
In terms of the value chain, this means connecting value creation partners – from suppliers to customers – are more tightly connected and capable of entering into closer cooperation with each other. The exchange of up-to-date information offers an opportunity to improve the quality and timeliness of decision-making processes, optimize the coordination of activities, and boost efficiency throughout the entire value creation process. This, in turn, provides machine and component manufacturers with the chance to offer their customers new services”.
“There is broad consensus that the incorporation and application of Industrial Internet technologies will lead to significant productivity gains and will spur growth through new business models and service models. The future will see a shift away from separately demarcated product lines and factories to a situation in which machines, storage systems, and resources are interconnected worldwide as cyber-physical systems that can communicate with each other”
So Bosch is spearheading the IIoT in highly collaborative ways.
It offers an innovative software platform that covers all the core IoT requirements, a growing pool of software and project know-how in-house for IoT solutions across multiple industries, logistics, (electro-) mobility and energy. It continues to establish highly strategic partnerships with the likes of HCL Technologies, PTC Thingworx, Oracle, HP Enterprises, GE and its Predix Platform, TATA Consulting (TCS), and numerous technology providers, as well as a range of joint research ventures with leading institutions like the Frauhofer Institute, Hasso Plattner Institute and the University of St.Gallen in Switzerland
Alongside these, Bosch’s activate participation in the consortium’s tackling IIoT for standards, protocols and promoting digital structural change through developing the reliable frameworks necessary for a networked economy. By being in the forefront it positions themselves for greater cooperation, participation, and coordination through its leadership and knowledge understanding position, building up a consistent overall understanding and leveraging these insights on top of “what they have” with “what they know”.
Increasingly they are working at the leading edge for more efficient and resource-saving manufacturing that allows for new business model growth in new services and value creation potential
Bosch is attempting to straddle the connecting world in a fairly comprehensive ‘holistic’ way.
Bosch is applying a strategy to increase connectivity on its own products, through its services and attracting in its customers to join on the Bosch platform. Bosch is applying its connecting knowledge within its own plants and from these experiences, it is applying this dual strategy of “lead user” and “lead provider” for real-life practical experiences in outfitting and sharing with others how it can “all” connect.
Bosch, by being fully engaged in the consortium specifically set up to deal with this digital transformation in the industrial world, is applying its extensive field experience, thought leadership position and growing ‘solution set’ to provide this single source of connected need. It is achieving a real sustaining competitive position but managing this in highly collaborative ways.
My next post is more specifically inside the Bosch solutions of BSI, their digital subsidiary
Bosch today offers an IoT cloud solution and a growing comprehensive IoT suite for developing IoT applications and solutions. These serve as the platform on which Bosch and its customers build a range of solutions and projects. It is becoming a comprehensive toolbox as a platform as a service provider (PaaS)
As I stated at the beginning, Bosch is seemingly wanting to become the one-stop platform provider for manufacturing and connecting all the digital transformational needs and solutions. Can it? What does this mean, is it heading for a de-facto platform? What will other organizations need to do in their digital transformation to sit on top of Bosch’s platform?
That digital set of solutions that connects beyond their current islands of “internal knowledge” most manufacturers need to resolve. Is it through applying Bosch’s platform of solutions and application all working in the cloud, based on their proven experience and testing? It seems a fairly good place to start.
For my next post, I want to delve into the ways and the solutions of Bosch Software Innovation’s offerings. BSI does provide an excellent example of a digital platform provider who “walks the talk” of the manufacturing world and is continually working on “simply” structuring solutions that will give confidence to those wanting to make the connecting step.
*** Sources of insights found on the (multiple) Bosch Websites as well as through a series of White Papers or Thought Pieces they provide back when you register.
Addressing the real-world challenges of IoT solution development. A joint white paper by Bosch Software Innovations and PTC- June 2016
Industrial Internet: Putting the vision into practice. Industrial Internet business models for machine and component manufacturers. April 2015
© Bosch Software Innovations GmbH.