March 24, 2016

Why Platforms Business Models are revolutionizing Asset Business Models in the Industrial world

Context Setting
There is a disruptive trend reshaping industrial and consumer marketplaces.
Platforms are powering game changing business models where emphasis is shifting from a one time revenue generator to creating new recurring revenue streams while also adding immense value.
The change in mindset is drivingorchestrating ecosystems using plug and play API which is more important than owning assets in a lot of cases.
For example the B2C marketplace is tangibly experiencing this massive upheaval where platforms are powering new business models for companies like Airbnb where they're platform is disrupting traditional asset based real estate models whereby the company provides consumers to rent property from them without even owning any property.  
Uber's consumer based platform model is also disrupting the traditional car as an asset based model specifically giving them the ability to basically run a taxi cab or limousine company without even having to own a single vehicle.
A similar movement is firmly taking root in the Industrial B2B world.  
Flutura has been participating in this important transition that is taking place.
Manufacturing, OEM, Energy, Oil n Gas are  all undergoing a complete makeover right now.
Pioneering companies like Ford, Hitachi, Schneider, ABB, PTC and yes, Flutura are seeding these Industrial platforms.
These platforms are sparking radically new business models which are filling previously unseen gaps in the market place. A new credo is being created where an orchestration of ecosystem platforms triumphs asset ownership!

This article looks at concrete examples of Industrial platforms impacting business models which are at seed stage.


Three Platforms Seed powering Industrial disruptions

Let’s look at various platforms movements which have begun in three Industrial organizations and which will rapidly blossom”as layers of dense sensor fabric, intelligent autonomous edge and central algorithms get added over time.

Industrial Platforms at Ford

The car industry is a classic case where the shift is evident. Every car is accessible via API.  Ford collects exhaustive information regarding Mustang, Explorer, Fusion etc. via OBD-II Protocol on CAN bus.  The specific state events collected include steering wheel angle, engine speed, accelerator pedal position, fuel level, latitude, longitude, transmission torque, gear lever position etc. This rich data pool is available to partners via OpenXC framework of APIs. For example the Brake Distance Tracking app leverages this data pool to warn drivers when they follow other vehicles too closely.

Industrial Platforms at Bombardier

The other place where the platform revolution manifests itself is Aircraft industry. A typical engine has about 250 sensors but some of the new age aircraft engines comes with 5000 sensors emitting 10 GB of data per second which means a single twin engine aircraft with an average of 12 hours flight-time can produce 844 TB of data which are transmitted using next generation aircraft data networks (AFDX) which transmit data at 12.5 mbs/second.  Engine health monitoring apps can look proactively for engine health signals and intervene early on instead of grounding aircraft for long expensive periods of time after an adverse event has occurred.

Industrial Platforms at GE

GE has even already articulated its vision for paying per thrust instead of paying for an engine. This is a truly differentiated offering where customers are guaranteed an outcome because industrial IOT platforms allow you to measure each micro event in an asset.  
All three examples conclusively prove that the movement has begun and is irreversible.

How Flutura is powering Platform based Business Models

Flutura has been powering revenue generating business models using Asset as a service models in Hydro, Energy and Engineering sectors using its Cerebra IOT platform in two core industrial markets – United States and Japan/APAC.
The Cerebra IOT platform which powers these next generation business models has three layers.
  1. Cerebra Signal IOT Data Exchange: This component of Cerebra essentially tames the torrent of sensor data by connecting to machines using data adapters to historians, SCADA and PLC systems.
  2. Cerebra Signal Studio: Cerebra Signal Studio helps Engineers surface signals using a 16 step guided process eliminating the minimizing the need for expensive hard to get industrial data scientists. Its unique functionality is the ability to see the most important patterns with “One click EDA”
  3. Cerebra Nano Apps: Cerebra Nano Apps are verticalized solvers which target an ultra-specific asset or process problem.

Closing thoughts

Platforms for Industrial sector are no longer ‘nice to have’ but rather now a ‘must have’ for an industrial company to survive in a changing world.  Industrial companies which do not have a platform road map risk being left behind as other Industrial companies leapfrog them.  
Industrial organizations like Siemens, ABB, Schneider, Eaton, and Honeywell are increasingly focused on digital IOT platforms. Flutura has been working with several pioneering industrial companies in Tokyo and Houston – which is being called the "Silicon Valley" for the industrial sector where we got a ringside view of this transition. 
For us as a company the future is very clear – Platforms will eat Assets.  We arenot in the business of building software, but powering disruptive business models in the Industrial world.  Click here to read more about Flutura

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