The hairstyle was Mohawk. This lean guy lives in Friedrichshafen, an industrial city in Germany. And if his namaste gesticulation was symmetrical to a fault, it is possibly because Daniel Eberle is into design thinking. He was in Bengaluru late January.
Eberle is chief design and technology officer at MTU, a manufacturing company owned by Rolls-Royce Power Systems that makes power solutions for large ships, rail vehicles, as well as industrial applications. In India, its power systems are in use at the Mumbai airport.
“I haven’t signed on paper in a while,” the chirpy Eberle remarked, as the MTU digital solutions delegation headed by Jurgen Winterholler signed an MoU with Robert Bosch Engineering and Business Solutions (RBEBS). The two companies will collaborate at the Robert Bosch Engineering centre in Bengaluru, which houses the largest Internet of Things (IoT) team for Robert Bosch Group globally.
“Any IoT solution that’s thought of in the Bosch world, engineers first reach out to the Bangalore centre,” Raghuram Joshi, a senior general manager at Robert Bosch Engineering, later told me. Eberle and his colleagues had spent the previous day with Bosch engineers at its UX and UI labs, which will work on MTU’s digitalisation projects. They also met the second cohort of DNA (Discover-Nurture-Align), Bosch’s startup accelerator.
All this bonhomie reminded me of a waltz.
Co-innovation helps conserve time — fail fast or scale fast. Such partnerships between technology players, enterprises and manufacturers help them share risks and jointly find new applications for diverse kinds of users. Most importantly, it helps the partners compete with hyper-funded Born-on-the-Internet companies, who give the Old Guard sleepless nights.
There is probably an acronym in every country for companies that were born on the internet. In India, I have heard of GAFAAN! (Short for ‘Google, Apple, Facebook, Amazon, Alibaba, Netflix.) In the West, it’s FAANG — the same bunch, minus Alibaba. You get the picture. The online chaps are way ahead of government, regulators and traditional competition.
That’s why the response of companies like MTU and Bosch is to harness partnerships and digitise together to discover new consumption patterns. Turning digital for this reality has required them to leave behind concepts like ‘mass manufacturing’. On the contrary, in the past three years, they have turned to philosophies like ‘Microservices’.
Technology advisory firm ISG’s analyst Alex Bakker had spelt it out some years ago. But it was hard to imagine how Microservices would shape up in practice. “Microservices will enable companies to develop additional services, capabilities and applications without replacing existing systems,” Bakker had said. “Most companies that are attempting to transform themselves into Digital Businesses are facing challenges with speed of development, and their ability to react quickly to demand.”
The Microservices methodology spawns many business model options for enterprises, the best of which can be tested and measured. As Eberle of MTU put it, “Explore a new technology, but with an eye for potential use cases for customers. Bring them up to scale, and make them successful in the market.”
Earlier this week, ISG analysts Pedro Maschio, Kenn Walters and Jan Erik Aase wrote on the importance of partnerships for digitalisation. “In the past, partnerships were intended to expand the sales channels… Today, these partnerships aim to create new offerings and develop the market, thereby improving customer experience,” they said, adding this is true even for technology companies of early vintage. “Microsoft and IBM have more value each if they work together, and each has less value if broken apart.”
After the bonhomie at Robert Bosch Engineering and Business Solutions (RBEBS), I sat down Joshi to ask two fundamental questions: How will both companies monetise services? And what about the IP (intellectual property)?
So we discussed MTU products in the rail industry. Traditionally, the mass-manufacturing approach meant that the business and technology teams agreed on the shape and design of a product, which got produced in large quantities for a long period of time.
Under the Microservices methodology, both partners are now looking at use-cases such as how to design hybrid power-packs (batteries) for rail cars? Or, how does it design a process by which rail industry clients can ‘pay-as-you-go’ (variable pricing)? This is a services mindset, which calls for designing a cloud capability for the battery pack, and billing processes. (The traditional payout would have been a fixed price.)
At one level, Microservices means a need to ‘sensorize’ (or put sensors) in the products, and add sufficient software to connect the products. “You need to create a connectable product. Then, you have a possibility of services like buying power for half an hour or up to an hour. The whole solution is enabled digitally,” Joshi said.
Connected products also yield more data, for which RBEBS will partner with a cloud computing company. As a result, revenue share is based on a number of factors, such as who brings in the enterprise customer, who contributes what in the end-solution, and who incurs what cost of running the solution. Similarly, the end-solution IP will reside with MTU, whereas a lot of the UI/UX and processes IP will be with RBEBS, which it can repurpose for its other enterprise customers and Bosch Group customers.
The most important thing for both parties is to be relevant with services end-consumers appreciate, Joshi said. It’s about time. “While there will always be a hype curve, it is a question of being ready when the story kicks in. It is no longer about individual brands, but more about partnerships—who is partnering with whom in the market?”
Implications for India
Sridhar Vedala, an entrepreneur in the area of digital transformation, has seen the landscape change from the era of large deals. He mentions two key changes at the client end. Both have huge implications for IT-services companies in India that became billion-dollar firms in the mass-solutioning era. They now need to re-learn for the Microservices Age.
“Traditional customers are seeing the need to change their org structure,” Vedala says. So if a bank once had its retail and institutional (lending) operations under one brand, that was a consolidated perspective. But their online competition is now individual – micro. It could just be a lending app. So, clients want to release creativity at a granular level.”
Two, there isn't a monolithic technology base for solutions. “Old IT departments (in client organisations) are dismantling the structures. They put people in each of the business units—business and IT.”
For Indian IT companies, this now means gathering technology requirements from business units of the client organisation—not just one centralised IT department. It also calls for a multidisciplinary team with the Microservices mindset.
The good news is: large technology companies in the west are still getting out of the ‘product’ mindset of the mass-manufacturing era. The exceptions are their Born-on-the-Internet counterparts like AWS, Uber and Airbnb.
In comparison, Indians have a greater affinity for the services mindset to create platforms and ecosystems. This is where mobile consumption happened on a pay-as-you-go (or prepaid) basis, remember? Vijay Ratnaparkhe, managing director of Robert Bosch Engineering, is often heard saying: “The East will lead the digitisation and not the West, which led the industrialisation. The East will lead the consumerisation and digitisation.”
Tech Trail is a column that delves on technology in the Indian realm. Kunal Talgeri is a freelance journalist in Bengaluru. The views in this column are those of the author.
Published Date: Mar 01, 2019 09:03 AM | Updated Date: Mar 29, 2019 09:03 AM IST