March 16, 2016

Mental Models of US based Industrial IOT Buyers ... 3 irreversible transitions !

Have you ever faced a situation where you had a strong market place hypothesis and it looked like things were not moving and then the inconceivable happens - momentum picks ? We at Flutura are experiencing this Deja vu right now in the Industrial IOT world
Its been a hectic 3 months with "Cowboy" Rick joining us in Houston ( The Silicon Valley of Industrial world) , things have really accelerated . When we look back and benchmark the momentum 1 year back and now in Industrial Internet, we can see the buildup happening in the marketplace - OEM, Utility companies, Shipping companies, and yes forward looking Oil n Gas companies ( in spite of sharp decline in oil prices ). While there is the challenge with slower sales cycles than consumer marketplaces, but once industrial mindset perceives value it can scale beyond ones wildest dreams. In this context, we wanted to share 3 important transitions converging fast to shift the gears ...

Transition-1 : From "Lets Pilot and see"  to "Wow ... this is strategic ...How do we scale" mental model

Last year same time, we at Flutura were executing a lot of pilots primarily because the electro-mechanical mindset wanted clarity on 3 specific things 
  1. Guaranteed impact on Tangible Industrial/Operational Outcomes
  2. Resonant Interaction design aligned towards the task flows of "greasy" industrial operator and detail oriented design/maintenance engineer.
  3.  Crystal clear clarity on Pricing & Business models around new IiOT offering
Today, we see a strategic in-flexion point where industrial customers are experiencing the removal of "fog" around 3 crucial dimensions and a clear cut emergence of clarity. This leads to a sense of urgency to scale and momentum builds.

Transition-2 : From  Optimizing Asset Efficiencies toExpanding Revenue Pools 

One year back the problem statements where Flutura Cerebra product was brought in as the solver, involved decreasing defects, increasing yield, bringing down mean time between failures. But today we are seeing a paradigm shift where OEMs and other industrial customers are forming separate organisational unit to monetize new IIoT powered offerings and create new revenue pools.

Transition-3 : From Fixed Capex pricing to Flexible Opex Pricing

Many large industrial players  in Utility and OEM industries are experimenting with flexible pricing models. One model which has been advanced is the "Pay per outcome" model. Flutura has found that in the  real world its a  practical challenge to build  complete attributability of outcome to industrial IOT platform when there are a plethora of other electro-mechanical factors affecting it. What we have found to be more practical is the  Pay per asset per month  mode. Here again there are 2 modes - uncapped pay per asset exposure orcapped pay per asset exposure. We see there is a natural gravitation towards capped pay per asset pricing models.

US IIoT vs Rest of world IIoT market

At the risk of sounding controversial, we find that the forward looking experimental mindset culturally embedded into Industrial buyers in US  being a strong advantage for disruptive IIoT projects as opposed to  European and Japanese counterparts. The willingness to experiment ,  celebrate failuresand scale massively  is a cultural advantage the US has over other markets which lends itself to be the leader in the IIoT space for sometime to come. We have seen this manifest itself in our conversations in all the 3 IIoT market places

Closing thoughts

From an IIoT product creators perspective, deep acceptance of the pace of industrial sales cycle has been a humbling experience for all of us at Flutura. We consider ourselves blessed to be part of this massive  digital revolution which is the next big thing to happen after the industrial revolution. We feel that the   IIoT networks  are going to deepen and solidify the the foundational digital backbone on which new business models are going to be created powering new revenue pools for the Industrial community.
The Digital age of Industrial IoT  is here and Flutura is loving the ride with our customers and partners ! Happy to hear your thoughts :)