IDC’s forecast about one-third of leading corporates being digital disrupted by 2018 while new startups emerge as game-changers, is something we are already seeing in action. Within last 2-3 years we witnessed how Uber disrupted the Taxicab industry and Tesla challenged the automotive space.
Today the need to apply the right spin on technology and offer innovative conveniences and value to customers is much less of a choice and more of an imperative to stay in business.
While speaking at The IOT Review, Kirstein Billhardt, Marketing director for IOT Business at Dell Technologies noted “if your brand is an existing player or even a leader in the industry, then being a little paranoid is a very good thing… to seriously think what you could or should be doing to become a “disruptor” instead of being a victim.”
How can a well-established business stay agile and competitive?
Today promising startups backed by compelling business model around a digital innovation are able to disrupt and deliver much faster. But what if you are a well-established business?
To stay agile and innovative Kirstein points two routes: Build or Buy.
In the Build route GE has set a great example by establishing a digital leadership footprint by incubating GE Digital – the agile and innovative avatar of a rather traditional engineering behemoth.
Google, which has always been a successful player in the digital space, is also a good example when it comes to building disruptive solutions at a fast pace in-house.
While building internally, corporates need top-level executive sponsorship to incubate new innovations, recruit new talent, bring in new capabilities and drive new focused objectives.
The Buy route primarily involves mergers and acquisitions, where bigger brands shop for new expertise, merge or even gobble up an entire brand. In recent days we have seen how Cisco tried to gain traction in IOT markets by acquiring Jasper, Parstream and AppDynamics and Dell merged with EMC, VMWare and other leading brands to evolve into “Dell Technologies”.
Both routes have pros and cons, to be weighed based on where you are as a business in your journey.
Partnerships: The “biggest IOT story of 2016” is the rise of partnerships and different ecosystems around IOT. We have seen big players team up with complimentary players and even startups.
Between build & buy, partnerships are more in the “buy” compartment, since you are leveraging other companies’ capabilities without giving up you own identity.
Re-aligning Internal Dynamics – As a business whether you choose to build, buy or partner, to thrive you must be mindful to tune your organizational dynamics.
This may call for a change in culture, challenging the status quo and old norms. You may need to introduce focused changes, set clear priorities and internal communication channels, rebalance investments, new ideas and foster a culture that supports new blood.
What has worked for years if not decades is hard to give up, and that’s the hardest challenge to overcome when we are thriving in a digitally disruptive marketplace.
In technology companies change isn’t all that uncommon.
But today industrial IOT is set to disrupt traditional operational companies. In these companies traditionally the pace of change has been slower. So those companies need to adjust to the new pace of change. While it might frustrate some, change often energizes, incubates new opportunities, new vision and new leaders. Operational companies can look for the right digital partners with complimenting tools and technology.
Partnerships and M&A in the IOT Context
Industrial IOT is a unique merger of IT and OT.
Major IOT implementation are happening in traditional OT organizations. One of their challenges is how do they bring in the various IT capabilities, either through partnerships or by on-boarding technology through acquisition.
So in IOT leveraging the IT space and finding a path to gain those capabilities is probably the biggest and most important strategic decision to move forward.
To do this starting small can be more prudent. Find out what works before you scale. When starting small, it is better to take up a real problem than Proof of Concepts (POCs). POCs often wither way. But if you are trying to solve a real problem smaller in scope, solve it and quickly gain the ROI, then that instills enthusiasm, and helps you to move to the second problem which is usually what you really wanted to solve & implement.
Expanding the channels – IT Versus OT
IT corporations have established sales channels targeting IT markets and so do operational companies. How can businesses expand channels in this converged IT and OT space?
Kirstein says Dell’s IOT marketing mantra is ‘Never go alone!’
Dell for example is a reputed IT brand and needs to penetrate in IOT space which is still rooted in the operational world. An effective penetration strategy could be:
Strategy 1: Bring in SMEs from each vertical, such as manufacturing, energy etc. who can offer their domain expertise in the product development phase and provide the right and reliable direction.
Strategy 2: Build a marketing strategy where you team up with the right partner while appearing in trade shows. What worked for Dell Technologies was to go with, for example, SAP in a manufacturing trade shows, since SAP has an established brand presence in manufacturing.
Similarly in the building automation space Dell would partner with Tridium Honeywell which is a big player in that space.
Seeing OT and IT companies together also builds confidence in your prospects and customers as they can expect a complete baked solution to speed up their deployment process.
