Bosch CEO Denner warns: "The connected world is not some distant dream. It's already here."
- Internet of things and Industry 4.0 offer huge opportunities
- Proper understanding of connected solutions is decisive for success
- Solutions have to focus on users
- Partnerships and open standards are also required
- Support for start-ups and innovative business models needed
- Single European digital market an urgent priority
"Connectivity is an all-encompassing trend, one that will affect all walks of life. Especially for a strong economy like Germany, this connectivity offers major business opportunities," said Dr. Volkmar Denner, the Bosch CEO, at Bosch ConnectedWorld 2015, an international conference in Berlin.
At the two-day industry conference, Bosch and companies including Cisco, Volkswagen, Trumpf, GE, and Daimler are presenting a range of new solutions in areas such as connected industry and connected mobility. Roughly 800 experts are meeting to discuss business models and technical solutions, and to exchange experience. Industry 4.0 (connected industry) in particular offers Germany a historic opportunity to improve its competitiveness as an industrial location. "However, this opportunity will pass us by if German companies are too slow to take action. Germany has to quickly meet the requirements for connected industry; otherwise, the country will be squandering the competitive advantage its strengths currently give it over other regions," Denner said.
Success depends on systemic understanding
Around the world, engineers are developing solutions for the internet of things. "At present developments are very much driven by technology. But in an area like this, technological know-how and excellent work alone are not enough. We have found that the right systemic understanding is decisive for the internet of things," Denner said. When developing connected solutions, therefore, Bosch takes three levels into consideration: the first is connected things, which use sensors to collect data and in this way help create a virtual image of the real world. The second is secure software platforms that connect these things with the internet and with each other, that analyze data, and that make new services possible. The third is the applications and services that are developed on the software platforms and create value-added for customers.
Users in focus
In Denner's view, customer focus and customer benefit are critical for successful solutions on the internet of things: "Any connected solution has to focus constantly on users and their problems, and less on products or technologies." For this reason, he said, a company's first thought when developing new solutions should always be its customers and their wishes. "We have to offer our customers solutions and functions that make their lives safer, more secure, and more convenient." In Denner's view, a consistent user focus is crucial if connectivity is to succeed. Moreover, he added, alliances involving different companies are an important driver of connected solutions. Joint projects and "eco-systems" need uniform standards and open platforms as a basis, Denner said, since only then can fully compatible solutions deliver the greatest benefit for customers and consumers. In Denner's opinion, it is precisely this cooperation among companies, even those in different industries, that forms one of Germany's major strengths. "For example, we have to build broad clusters for Industry 4.0 in order to pool expertise, knowledge, and resources," Denner said.
Collaboration with start-ups and establishment of a venture capital scene
The Bosch CEO is concerned that established industries are increasingly being challenged by new providers with clever business ideas. It was for this reason that Bosch set up the IoT Lab with the University of St. Gallen in 2012. On a scientifically sound basis, this joint "think-tank" explores and tries out new business models for the internet of things. "German industry is still technologically innovative. But to hold its own on the internet of things, it also has to create new, innovative business models," Denner said. One thing that might help here would be if traditional industrial companies were to collaborate more closely with internet start-ups. For their part, internet start-ups need more financial support as they scale their business ideas up to the relevant market size. "Europe has waited long enough for a functioning venture capital industry rich in financial resources," Denner said. If they cannot be assured investment, German or European start-ups will never be as big or successful as their U.S. counterparts.
Single digital market and responsible use of data
Denner sees a further crucial disadvantage for European companies in the extremely fragmented European market, which is the result of differences in data and consumer protection regulations. "We need a single digital market in Europe. This will allow us to launch connected solutions just as successfully in our home market as U.S. or Chinese companies can in theirs," Denner said. In this connection, he called for rapid introduction of the EU's General Data Protection Regulation. Denner, who is also responsible for research and advance engineering on the Bosch board of management, underscored how important data protection is to society's widespread acceptance of connected solutions. "The internet of things can become a reality only if people put their trust and confidence in it." That's why Bosch is committed to making the handling of customer data extremely transparent. Denner continued: "We are completely open about how we use our customers' data. We will tell our customers what data we want to use for what purpose, and we will ask them for their express permission."
Bosch saw the internet of things coming years ago
The Bosch Group's strategic objective is to create solutions for a connected world. For many years, the company has been preparing systematically for the connected world, not least by expanding its own software competence. Bosch Software Innovations GmbH is the Bosch Group's software and systems unit. In the form of its Bosch IoT Suite, it provides all Bosch divisions, as well as external customers, with a versatile software platform for the internet of things. Moreover, Bosch is the leading supplier of MEMS sensors (microelectromechanical systems), which are a key technology for the internet of things. On its path to the connected world, Bosch is linking its expertise in the "world of things" and the "world of software." In doing so, the supplier of technology and services is relying on both products and new business models, such as connected fleet management or proactive maintenance of manufacturing facilities.
Bosch ConnectedWorld – where industries meet to discuss tomorrow's world
The Bosch ConnectedWorld event is an annual conference on the subject of the internet of things. This year, some 800 international experts are meeting in Berlin to talk about current areas of application and new business models. In addition to the Bosch CEO Dr. Volkmar Denner, the conference speakers include Ulrich Grillo, president of the Federation of German Industries, and Dr. Richard Mark Soley, CEO of the Industrial Internet Consortium.
www.bosch.de
