Continuous innovation is at the core of development for the IoT vision
The summer break is behind us. With a rested mind, we want to reflect on the status of the Internet of Things (IoT). There are many factors affecting the market place. On the technological side, continuous developments excite supply and demand: the return of relevance of connectivity forms with LPWAN and 5G, the evolution and sophistication of platform services, the questions on the relationships between IoT and robotics and IoT and artificial intelligence (AI).
On the business side, there is an increasing attention from the demand side, the so-called IoT adopters, in understanding the objectives and the implications of IoT solutions and the technological, social, and regulatory environments within which IoT solutions are developed. To explore all that, Saverio Romeo, the principal analyst at Beecham Research, spoke to Bernd Gross, the chief executive of Cumulocity, which is now part of Software AG. He is an influential protagonist in the IoT market and shares his view on how the IoT vision is becoming reality as well as how Cumulocity fits into the IoT landscape.
Saverio Romeo: Bernd, tell us how you see the current Internet of Things market status.
Bernd Gross: The market is moving decisively towards an informed understanding of the potential of IoT solutions. Therefore, we start to see solid and strategic investment in the Internet of Things. We are in front of very complex projects because of their strategic nature, but also because of their size and their sophistication. For example, we are working on projects involving more than 100,000 machines. And, the project does not only aim to monitor these machines, but to run sophisticated activities such as predictive maintenance of those machines. Bear in mind, 100,000 machines is just the beginning. The project is moving towards a global roll-out, which will involve a larger number of machines. Our customer portfolio in the Industrial Internet is becoming extensive with projects for companies such as Gardner Denver, Pfannenberg, Tünkers and Hubtex.
SR: Do you see this level of maturity across sectors?
BG: The industrial and manufacturing sectors are strongly embracing the objectives and the vision of the Industrial Internet, or Internet 4.0 as used in Germany. And, if we take into consideration the complexity of manufacturing processes, it is encouraging to see a deep level of involvement of companies in IIoT projects. However, there are other sectors showing similar maturity. Telematics is one of those. We are working with leading telematics players such as Octo Telematics. Octo has been a key protagonist in segments such as usage based insurance (UBI) and its journey has been extraordinary, moving from in-house platform solutions to collaboration with Cumulocity because of the growth it is experiencing. There are interesting developments in the energy sector and in smart cities. Cumulocity is involved in smart city projects in Estonia and Australia. However, the speed of development is not as fast as in the Industrial Internet because of the types of stakeholders involved and their business models. And, finally, retail is also increasing IoT adoption. But, we do not see the same sophistication in retail projects that we see in manufacturing. The retail projects seem to be more point solution driven rather than holistic looking at the entire operations and processes.
SR: A large portion of your examples are related to the enterprise world, what do you think about the consumer IoT?
BG: The consumer IoT segment is also becoming more promising than it was in the past. We have several projects in the space. An interesting one I would like to share regards the connected bike segment. We collaborate with Winora Group to create the next generation of e-bikes. The project is not just about enabling the monitoring and control of the location of bikes, but, it includes other important features such as an emergency call system that is particularly useful in rural areas. In the context of this project, it is important to highlight that Winora Group is a very wellknown bike brand, which has produced bikes for different needs and tastes for the last 95 years. The group invests strongly in innovation through their subsidiaries such as Haibike, Sinus and XLC. Another successful project has been with Trackerando, a consumer product delivery company. They use a Cumulocity platform for enhancing consumers’ experience in online and mobile tracking.
SR: From your words, we are in front of a growing wave of Internet of Things activity. Cumulocity is riding this wave in a new form, as part of Software AG. What does being with Software AG mean and what are the objectives?
BG: Since the market emphasis on the IoT vision started five years ago, Cumulocity has been there offering a reliable and scalable platform solution. Through those years, we have grown substantially in terms of customer base and geographic footprint. However, it was clear that to move to the next step, the next step being a truly global player, we needed a partner with a global remit. The internationalisation of Cumulocity was our strategic task. However, we wanted to execute that task without being absorbed into a large enterprise. We wanted an organisation able to give us the right focus for a global growth, but, open and flexible enough to enable us to proceed along our technological and strategic path. Software AG was the perfect fit. Software AG has 46 years experience in software, operating in 70 countries and with the right open and flexible approach for us. With Software AG, we are becoming a truly global IoT platform vendor.
SR: Has being part of Software AG impacted your customer base?
BG: We have been together since April 2017 so it’s probably a bit too early to run an assessment. But, we are seeing already a strong effect on us. That is not only about the number of customers, but, particularly, the size of our customer base located in different parts of the world. Mobile network operators from all over the world are using our platform from Deutsche Telekom and Telia in Europe to NTT in Japan, Telstra in Australia, and Etisalat in UAE. We have large customers such as Lyreco, MicroTechnology, and PayPal. Being with Software AG has also expanded our ecosystem of partnerships and involved us in new collaboration such as the newly announced ADAMOS.
SR: Which changes do you see in terms of product and service proposition?
BG: The potential of bringing together Cumulocity platform services and Software AG capabilities is enormous. The proposition expands in critical areas for enterprises such as enterprise integration tools, process management, and artificial intelligence. In fact, Cumulocity IoT is our new IoT offering. It is not just about platform services. It brings together several services from the cloud until the edge.
SR: Staying on the topic of IoT platforms, there are several organisations offering platforms or claiming to offer those, which are the key differentiating elements of the Cumulocity platform?
BG: We have a strong commitment to innovating our platform. We have a strict approach to new releases. We actively invest in updating existing services and offering new ones. Consequently, we believe that Cumulocity offers a very reliable, scalable, and innovative platform. We offer capabilities that are not often seen in the market place. I wanted to highlight one: multi-tenant architecture. In some cases, multi-tenancy is used to describe multi-user access to platforms which present an intuitive UI to users and for multi-user management. However, this is just part of a multitenant architecture. Cumulocity offers multi-client architecture at database level. The data can be stored by customers completely separated at the database level. This ensures a strong level of data security. This aspect is becoming especially relevant in the Industrial Internet, in which the data volumes are growing continuously and in diverse ways. Following this, Cumulocity also offers a very flexible and expandable data sharing concept. This is important in the Industrial Internet because applications require interactions between a variety of partners and stakeholders as in the case of the supply chain.
SR: What other platform services are important in the Industrial Internet?
BG: In Industrial Internet, development and deployment speed is crucial. If a project implementation takes too long, that can be disruptive for the company because the projects objectives can collide against new market conditions and company’s strategic goals. To avoid that, agility is essential. It is then important to launch a pilot project to have a Minimum Viable Product (MVP) as a proof of concept on which develop further. Agile methodologies are useful for that process. Tools such as Design Thinking, Lean Startup and Scrum are all very useful for the Industrial IoT.
Another essential element for the Industrial IoT is providing companies with edge computing services to build distributed architecture. The cloud is fundamental, but, not all applications can be realized in the cloud due to specific context needs, which require stringent conditions on latency. Applications that require real-time monitoring and control require a certain degree of edge computing and edge analytics. This can happen through IoT gateways that gather data from the edge devices, execute initial analytics and transfer data to the cloud reducing the transferred volume. Cumulocity Edge provides all these features offering a continuum with cloud services. Our open approach also enables Cumulocity to integrate edge computing and edge analytics features from third parties.
SR: Cumulocity is involved in some very important alliances such as EdgeX Foundry. Through Software AG, Cumulocity is now part of ADAMOS. What is ADOMOS and what are the objectives?
BG: ADAMOS stands for ADAptive Manufacturing Open Solutions. It is a strategic alliance bringing together DMG Mori, Dürr, Software AG and Zeiss as well as ASM PT. The alliance wants to become a point of reference for machine builders and the entire machinery business ecosystem. The overall objective is to enable the middle-sized companies, either involved in niche machinery markets or working around large machinery enterprises, to fully embrace the digital transformation process through the Industrial IoT vision. ADAMOS then becomes a tool for machinery companies to offer tried and tested solutions for digitally networked production to their customers. And, our role is fundamental. ADAMOS revolves around four key pillars: ADAMOS Partnership, ADAMOS App Factory Alliance, Digital Marketplace, and the ADAMOS IIoT Platform. The ADAMOS IIoT Platform is based on the Cumulocity platform. Our services will enable the journey of several middle-sized machinery companies in the Industrial Internet.