Industrial OEMs and enterprises are feeling the pressure to deliver smarter products and capabilities faster than ever. More and more, these capabilities are built on a foundation of intricate industrial applications empowering connected equipment as a service.
The past decade for industrial OEMs has seen a dramatic rise in the need for business transformation in order to enable revenue preservation and growth in the long term. The SaaS model, at the OEM or distributor level (DSaaS), has become a prominent approach for organisations to sustain existing and acquire new untouched market share, either directly or indirectly. Many OEMs and enterprises of varying tier levels have realised this opportunity and have already started investing in this direction. Following this trend, GE Digital introduced GE Predix, Hitachi established Vantara, and Siemens developed Mindsphere, among others.
But why do OEMs need an IoT strategy?
According to McKinsey, industrial OEMs are in a highly productive period using IoT in operational optimisation, integrated smart systems and asset performance management, all with a target market size of US$3 trillion by 2030.
To survive and thrive in this new era of industrial revolution, OEMs must start delivering smarter products or equipment that integrates the Internet of Things (IoT) to become future ready and protect market share, maximising the value of device data to better assist clients and incorporate new product innovations. With insights into how your equipment performs and how warranty costs occur, you can effectively control the opex. And that isn’t all.
The value of smart equipment goes beyond cost control and asset management. For industrial OEMs, the core competencies are steadily shifting from hardware-centric to software-led services. With soaring global competition and increasing ROI expectations, new benchmarks are fading rapidly.
Industrial IoT and enterprise domain cloud open the door to offering newer revenue streams that bring greater recurring cashflow than a traditional single-time purchase model. These digital services may range from asset performance monitoring, asset remote monitoring and field ops to advanced business models such as equipment-as-a-service.
OEMs’ adoption challenge
In the McKinsey B2B IoT Survey, more than 90% of respondents revealed difficulty in incorporating all six components (connectivity, integration, cybersecurity, interoperability, confidentiality and device (AI/ML) intelligence) of seamless IoT adoption.
CXO-level challenges
Developing a strategy for business model transition through IoT is complex, and executing it is even harder. Building bespoke applications on your own can backfire, leading many CXOs or decision makers at global OEMs to look for a trusted technology partner that can accelerate the development of scalable and reliable IoT services.
Many OEMs and enterprises face significant challenges in making this happen. Even if they already have edge IoT data in hand, their goals of delivering applications such as remote monitoring, predictive maintenance, field service applications and smart products are blocked. Why? Because the underlying technology is complex and requires a lot of specialty skills, time, budget – and risk. The rise in level of complexity with each consecutive phase of application development yields a higher chance of failure at initiation.
If an OEM does not take action today, it’s inevitable that their competitors will— and much faster. Both the risks of not taking action and the benefits of IoT adoption are too big to ignore.
Buy or build an IoT platform, why just one isn’t sufficient?
Despite the benefits of conventional methods to develop an IoT platform (In-house development and IoT platforms), they eventually lead to a buyer’s regret for OEMs. Pick any of the approaches, and you will get a partial resolve for core challenges in the technology adoption.
An IoT platform provides you with faster time to market and proves to be cost-effective. However, it locks you in a single environment with limited flexibility and misfitting customisation (a one-size f its-all approach). Conversely, the in-house development approach gives you flexibility and customisation according to your business needs, but it eventually leads to a dead-end with gigantic capex, slower time-to-market, skill shortage and bleeding ROI.
Solution: Why is it high time to consider an alternative methodology?
Beyond Gartner’s hype cycle for emerging trends in 2023, OEMs today are ready to implement IoT and AI/ML technologies and are on the verge of decision-making for the right methodology and technology partner.
The availability of an alternative that provides the best of buy and build is no longer a concept and has become a reality with an OEM enterprise domain cloud (OEDC). This approach allows OEMs to start on top of pre-built microservices at advanced progress (83%) and invest purely in the remaining development of core business logic (17%) to gain an 830% ROI.
Multiple dimensions of new value and flexibility for OEMs
- Unblocking the path to smart products and IoT differentiation: A cost and risk contained way to smart products and enterprise-grade IoT application systems.
- Enabling new revenue opportunities: Smart product services provide new value to the customers that you can charge for.
- Expanded support for multiple OEM paths to market: Scalability and multi-tenancy, SaaS capabilities, and portability support for all customer types.
- Dramatic improvements in operational costs: Cutting service, repair and truck-rolls costs with predictive and preventative maintenance automations.
- Eliminating the skills gap needed to modernise OEM product lines: Developers only need to focus on customer value creation and not underlying Big Data technology.
An OEDC platform enables OEMs to build enterprise-grade applications such as APM, ARM, field ops, and more via an enterprise-fit ecosystem to deliver smarter products in a time and cost contained workflow. It solves major challenges faced by different professional verticals (product, operations, engineering and business) at an OEM. It allows OEMs to focus on building new customer value and avoid spending valuable time on IoT stack technology.
Outcomes that our global OEM clients achieved
- Enterprise-grade security, reliability and scalability – proven to meet CIO audits for deployments.
- Customisation flexibility for multiple OEM products, customers and vertical market solutions.
- Application deployment flexibility to serve various OEM go-to-market alternatives.
- Three times faster time to market with 830% ROI (crossed break-even in less than a year).
- Zero technical debt and vendor dependency with 1/100th of lines of code (LoC)
- Complete IP ownership with industry-ready cybersecurity for risk-free adoption.
How does IoT83 make a difference?
IoT83 is a product technology company that caters to the OT and IoT market by recognising the vital need for business transformation for industrial OEMs. Our enterprise domain cloud platform, Flex83, enables OEMs to eliminate IoT adoption challenges such as significant capex investments and prolonged timelines in the in-house development, and customisation and flexibility limitations associated with existing IoT platforms — adhering to our 83/17 rule, an 83% head-start for industrial application development on pre-built microservices with only 17% work left for developing the core business logic.
Flex83 provides a rapid application development system, letting your teams focus directly on creating smart product differentiation without the overhead, delays and risks of the underlying technology. It also empowers OEMs to transform capex into flexible OPEX, providing a competitive edge with an accelerated time-to-market (TTM). Furthermore, it addresses security risks associated with handling critical data in the development and operation of industrial applications.
Headquartered in the United States and with an offshore development centre in India, we are a team of experts assisting our global clients in maximising the full potential of industrial IoT by enabling interconnected digital transformations to deliver smarter products.
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