Bosch makes IoT Cloud play to tap into digital transformation

SUMMARY:

Bosch is the latest industrial giant to make its own proprietary IoT cloud play, with CEO Volkmar Denner proclaiming it’s the last piece of the puzzle to drive new growth areas.

IoT BoschFollowing in the footsteps of the likes of GE, German industrial giant Robert Bosch GmbH is launching its own Internet of Things (IoT) cloud platform.

For use on 50 applications in internal projects only at first, the Bosch IoT Cloud will be made available to clients across all four of  the firm’s main market sectors – automotive, home equipment, energy and manufacturing – in 2017.

Bosch’s cloud platform will be underpinned by its existing IoT Suite, the self-styled “brain of the connected world”, which provides the software to connect devices, users and companies. According to Bosch, the Suite services 5 million devices and machines today. The IoT Cloud is the next step, says Chief Executive Volkmar Denner:

As of today, we offer all the ace cards for the connected world from a single source. The Bosch IoT Cloud is the final piece of the puzzle that completes our software expertise. We are now a full service provider for connectivity and the Internet of Things.

A major factor in the success of connected solutions is their scalability. Business models must be able to grow quickly when necessary. The Bosch IoT Cloud means Bosch now has the relevant infrastructure. We see this as a major milestone for Bosch.

At its Connected World event in Stuttgart yesterday, Bosch highlighted a number of IoT successes to date, including:

  • The Bosch Smart Home System which can tell users the current temperature in their home and let them change the setting while they are still on the road.
  • An IoT-enabled field service technicians applications that provides remote access to authorized Bosch heating systems so they can troubleshoot problems and then bring along any required replacement parts to their first and only service visit.
  • An asparagus farming offering that allows farmers to know the exact temperature of the ground, data which enables them to improve their harvest.
  • An online map of available park-and-ride spaces throughout Stuttgart’s commuter train network, with sensors detecting where there are parking spaces unoccupied and delivering this information as a real-time map that users can call up on their smartphone.
  • A book-and-park service for truck drivers that enables the truck to send its location data to the Bosch IoT Cloud which then reserves an available parking space nearby and informs the driver.

Denner says:

These examples show that intelligently connected devices, complemented by services from our IoT Cloud, are the basis of successful IoT business models.Connected solutions improve people’s quality of life and conserve natural resources.

Competitive landscape

As well as supporting the firm’s ambitions to grow its footprint in emerging sectors,  such as smart cars smart homes, as well as intelligent manufacturing, the move takes the German engineering firm into competition with traditional IT players as it morphs into a hybrid IT and industrial operations provider.

Denner posits a competitive landscape with the main competitive forces approaching the end goal from opposite directions:

There are product companies like Bosch trying to add software and services and there are IT companies trying to get into the physical space. The race is completely open.

While no funding numbers were produced specific to IoT initiatives, Bosch says it will invest €500 million ($550.7 million) annually in new technologies and that it has north of 3,000 software engineers working on IoT projects. Last November, diginomica reported on some of the learnings from those projects in conversation with Dirk Slama, director of business development at Bosch Software Innovation. 

With an eye to data privacy culture on its own doorstep, Bosch will run its cloud out of Germany, but the longer term roadmap will involve opening data centers around the globe. No further details are available at the moment. Denner states:

Many companies and consumers state that security concerns keep them from using cloud technologies and connectivity solutions. The Bosch IoT Cloud is the answer to those concerns. Consumers want to know whether their data are protected and secure. For this reason, the security we offer our customers is always state of the art.

He adds that he sees growth in the connected world and IoT arms of the business as a key enabler for future growth, building on the firm’s most recent 35% year-on-year profit growth to €5 billion, on revenue up 10% €70.6 billion, from €64.2 billion in 2014. Denner says Bosch has been savvy in its investment in growth areas:

We were able to successfully continue our growth trend in a challenging business environment and a number of stagnating markets in 2015. A major driver of this positive business development was an increasing number of solutions for the connected world.

He adds that traditional industrial companies can ride the current digital transformation wave in order to enter completely new markets:

Digital transformation and increasing connectivity are huge opportunities for us. The key pre-requisite for this is to have in-house software and IT expertise. Bosch has been building these capabilities for many years.

My take

The advantage for companies like Bosch – and GE, Caterpillar and so on – is of course their proximity to the devices. Unlike the likes of Amazon and Google, they own the commodity kit that’s going to be doing the talking in the Smart Home, for example, or build the trucks and cars and trains and so on. 

What becomes interesting then is the power-sharing between the industrial operators and the IT establishment looking to tap into the IoT-enablement opportunity. Increasingly the thought-leadership is likely to come from the industrial giants closest to the device users and consumers, with the IT providers in supporting roles to help deliver optimum value from IoT offerings. The winners will be those who can strike a balance and create mutually-beneficial working partnerships. 

Image credit - Bosch

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    1. says:

      Amazon owns Alexa, Google (Alphabet) owns Nest. You can argue about success or otherwise in each case though Amazon makes the stronger case because it ties to much more than a few disparate services.

      I’d argue that Bosch’s examples are not unique, plenty of others have done all of the things they are talking about. Perhaps the difference is in brand. The weakness I see is in not explaining exactly what opportunities exist beyond what we see today.Reference