Digital platform strategy: build one before someone else does

Recently formed alliance intends to offer digital platform with commerce and IoT capabilities -- built 'by manufacturers, for manufacturers'

When you have a complex, multi-layer supply chain, a network of partners and suppliers, and hundreds or thousands of customers who depend upon everything working in sync, you take the threat of digital disruption very seriously. All it takes is a data-savvy player with a highly agile platform to slip into the process somewhere and boom -- before you can react, they take over the customer relationship.

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Photo: Joe McKendrick

That's the primal fear now running through the manufacturing sector, which has been addressing the challenge on two fronts -- for some time with digital commerce, and more lately, with the Internet of Things.

Taking advantage of all the IoT has to offer may be an overwhelming proposition for many enterprises and their technology teams. For manufacturers, the IoT means developing a new business model, based on after-sales monitoring, updates, predictive maintenance and other services. The question is how to go about such an undertaking.

There is the build-it-yourself option. As you can imagine, that will not be welcome news to overworked, stretched-to-the-limit IT departments. It likely will mean hiring a bunch of highly skilled new people, as well as expensive consultants.

Another approach may be to partner with an intermediary service that handles the movement of data and available applications. Of course, the service broker may not fully understand your business, and as mentioned above, your company risks losing control of its customer relationship -- not to mention data assets -- in the process.

There's a third way being advocated, and that is to collaborate with other companies in your industry to develop a shared platform -- assuming you aren't cutthroat competitors. There is an effort underway in high-tech manufacturing -- with the launch of a platform designed by manufacturers and run by manufacturers. That is the value proposition being put forth by some folks in Germany. A recently launched joint venture, called ADAMOS (for ADAptive Manufacturing Open Solutions), seeks to bundle knowledge in mechanical engineering, manufacturing and information technology to help make the IoT a reality for participating companies.

I caught up with Dr. Marco Link, CEO of ADAMOS, at Software AG's recent confab in Madrid, who discussed the rise of the shared platform approach to the IoT challenge. "ADAMOS is a platform built by manufacturers for manufacturers," he explained. "We would like to be the owner of the platform and the user of the platform at the same time. That means there's no third party, no big industry player, or no big software player that comes in the middle between companies and their customers. We give them the opportunity to present their digital market offering directly to the customer."

Software AG, an enterprise software company, is a founding partner in the alliance, and also provides backend infrastructure support. In addition, ITAC Software is also a key partner. However, Link says the platform is agnostic in terms of software and cloud choices. Currently, the alliance runs its services on Microsoft Azure, but can be quickly shifted to any infrastructure of choice in any geography, he adds.

Current manufacturing partners in the alliance include DMG Mori, Dualis, Durr, Homag, ISTOS, Schenk, and Ziess. ADAMOS' goal is to gain 200 to 300 partners over the next year, Link says.

The ADAMOS Industrial IoT (IIoT) platform is intended to provide both on-premises and cloud-based solutions in the core areas of device connectivity and management; real-time analytics and visualization; workflow automation and enterprise; and cloud integration. "We are connecting machines to customers," Link says. "Whoever can do this will have great power in this market." The purpose of ADAMOS is to fend off disruption from Amazon-like players -- or perhaps even Amazon itself -- from intervening in the relationship between manufacturers and their customers. A digital platform offered and run by manufacturers themselves will help cement their relationships with customers, offering commerce and IoT interactions.

ADAMOS also seeks to share knoweldge and expertise across the manufacturing domain with reusable applications. "With the App Factory Alliance component, for example, our production planning applications was not just developed for just one case. It is an application that can be reused in different applications, at different levels. Our partners can later on change those software applications, to rebuild applications for their for customers."

While it remains to be seen if a collaborative industry concept such as ADAMOS gains traction, it points to the fact that companies see the threat of potential digital intermediaries getting between themselves and their customers as looming large. Large, complex supply chains such as those seen in manufacturing are ripe for disruption by digital platform disruptors, and it makes sense for these companies to try to get out ahead of the earthquake.

(Disclosure: I was an invited guest at Software AG's Madrid meeting, mentioned above.)