BOSCH: IoT SUITE PLATFORM AND IoT CLOUD SERVICES

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1 COMPANY PROFILE BOSCH: IoT SUITE PLATFORM AND IoT CLOUD SERVICES AHMED ALI Analysys Mason Limited 2017 analysysmason.com

2 Company summary Bosch is a privately held multinational corporation with more than 400 subsidiaries developing and providing industrial and engineering technologies and services to different sectors including automotive, manufacturing, energy and home appliances. Bosch made an early move into the IoT market through a combination of internal development and technology acquisition in the device connectivity and management space. In 2008, to support its entry into the platform market, Bosch acquired Innovations Software Technology which had expertise in developing embedded applications. Innovations was later established as Bosch Software Innovations (Bosch SI) in Bosch launched its IoT Suite in 2013 and also established a new subsidiary, Bosch Connected Devices and Solutions GmbH, to focus on providing IoT sensor and connectivity solutions and services to different verticals including logistics, transportation, manufacturing and smart homes. The company continued to strengthen its software offering through acquisitions such as inubit, a process management provider, in 2011, and ProSyst, a gateway software provider, in In 2016, Bosch further extended its platform features by releasing its IoT Cloud Service offering which runs on its own infrastructure. Figure 1: Bosch company facts Founded 1886 Offices Headquarters in Stuttgart, Germany. Worldwide offices Employees (December 2016) Regional focus Revenue Selected IoT customers Selected IoT partnerships Global EUR73.1 billion Amdocs, EWE NETZ GmbH, Deutsche Telekom, MANN+HUMMEL, Stadtwerke München, The Yield Implementation: Amdocs, HCL, Infosys, Tata Consultancy Services, Tech Mahindra, T-Systems Semiconductor: Broadcom, Intel, NXP, Texas Instruments, Marvell, MediaTek Cloud: Amazon Web Services, GE Digital, IBM, Salesforce, SAP, PTC Technology: AWS, GE Digital, IBM, Salesforce, SAP, PTC, Oracle, Software AG, Vodafone Analysys Mason Limited

3 (EUR billion) BOSCH: IoT Suite platform and IoT cloud services Company summary: financials Bosch s total sales revenue in 2016 was EUR73.1 billion, growing at a CAGR of 13% since 2012 (Figure 2). Over the same period, net profit grew at a CAGR of 0.8% to reach EUR2.4 billion. Revenue increased significantly in 2015 due to the full acquisition of the former joint ventures; Automotive Steering and BSH Hausgeräte. Bosch Group has four main business sectors: Mobility Solutions (which generated 60% of 2016 revenue) targets the automotive market. Bosch Connected Devices and Solutions subsidiary is also part of this sector Industrial Technology (9%) contains automation and packaging solutions Consumer Goods (24%), contains power tools and household appliances Energy and Building Technology (7%) includes Security systems, Heating systems, Service solutions and Services to increase energy efficiency in non-residential buildings. Figure 2: Bosch s revenue and net profit, worldwide, 2012 to Revenue Net profit Source: Bosch Group Figure 3: Bosch s revenue by region, worldwide, % Europe Bosch generated 80% of its 2016 revenue outside Germany. Europe which is the company s largest market (Figure 3) grew by 3.4% YoY. The Americas revenue decreased by 2.8% YoY due to the lower sales in the Industrial Technology and Mobility Solutions sectors and the overall lower sales in Latin America. Asia-Pacific (and the rest of the world) is where Bosch had the highest growth (8.3% YoY) as a result of strong sales throughout the region 28% Total revenue: EUR73.1 billion 53% Asia Pacific (and other regions; including Africa) Americas Source: Bosch Group Analysys Mason Limited

4 Business overview Bosch s main IoT subsidiary is Bosch Software Innovations which provides IoT software platform services and SaaS applications. Bosch also provides sensors through Bosch Connected Devices and Solutions. The two units collaborate together to develop and deploy IoT solutions and services for different verticals and enterprise customers. Bosch Software Innovations is not allocated to a specific Bosch business sector as it works across all four. Bosch SI employs 800 IoT professionals and has locations in Germany, Bulgaria, Singapore, China, Japan and the US. Through its IoT Suite solution, the company has executed more than 250 international projects and has connected more than 6 million sensors and machines. Bosch is aiming to extend its services to 25 million devices by The company offers IoT Suite hosted on its own cloud. The platform implements a modular design that offers multiple device management microservices and allows customers to pick and choose services. On top of the IoT Suite platform, Bosch also offers pre-packaged applications for Manufacturing, Mobility, Energy, City, Home and building. The company extends its capabilities, especially in the application enablement space, by partnering with other major platform providers such as PTC ThingWorx and Software AG (Figure 4). Besides the hardware and software components, Bosch supports its IoT customers with a range of services including consulting, training, co-development and marketing. Figure 4: Bosch IoT platform and solutions Applications Application enablement & analytics Device management Connectivity & connectivity mgmt. Gateways Hardware Mobility Manufacturing Energy Key Software (ProSyst) Sensors Bosch Home & building e.g. PTC ThingWorx, Software AG Bosh IoT Suite/ Bosch IoT Cloud Cellular, LPWA, Management platform Partners Hardware City Devices, Sensors, Modules Partners Apps Source: Analysys Mason Analysys Mason Limited

5 IoT Strategic direction Based on the company s background in the manufacturing sector and supplying various components to major industries including automotive, Bosch s focus for IoT is device connectivity and management. Bosch is providing generic capabilities to all vertical markets and has extended these capabilities to selected markets (e.g. mobility, buildings) with industrial IoT and manufacturing remaining its strongest domain. To reinforce its industrial IoT strategy, Bosch established its Connected Industry unit in The unit will build on the expertise of all of other Bosch s units and will develop solutions that can be used by Bosch internally and sold to customers. The company also remains active in the standardisation process and industry collaborations. Bosch: heavily influenced the development of a free and an open source Industry 4.0 protocol known as the Production Performance Management Protocol (PPMP). leads a European Union project to develop a unified industrial manufacturing concept to meet different production requirements is a member of both the German Platform Industrie 4.0 and the USA-based Industrial Internet Consortium (IIC) alliances. Bosch is building expertise in artificial intelligence and its applications in IoT and industry 4.0. The company opened its Bosch Centre for AI R&D in 2017 with around 100 experts to support internal AI projects. The company will invest EUR300 million in AI research by To strengthen support for device management, Bosch is hosting its platform and services on its own as well as partners clouds. Bosch data centres are located in German, USA and Singapore. While it does not have the scale of a major cloud provider like Amazon Web Services, this move can support the company s projects in the German and European markets when these projects are subjected to data location regulations. The company also continues to expand deployment options into major public clouds including AWS, IBM and SAP. As well as acquisitions (following slide), Bosch has invested in a number of IoT start-ups. Notable examples include Actility for LPWA connectivity and FogHorn and iguazio for edge analytics. Vertical-specific investment examples include ParkTAG (automotive), the Yield (agriculture) and Cheetah and Emperra (healthcare). Analysys Mason Limited

6 Key acquisitions and investments Figure 5: Bosch s key IoT acquisitions and investments, Date Company Transaction Description Oct 2017 FogHorn Investment Founded in 2014 in the USA, FogHorn provides an analytics and machine learning development platform edge and fog computing applications. The company has a total funding of USD47.5 million. Jul 2017 iguazio Investment Founded in 2014 in Israel, iguazio is big data and analytics platform that support edge and fog applications. The company has a total funding of USD48 million. Apr 2017 Actility Investment Founded in 2010 in France, Actility is a connectivity solution provider that offers infrastructure and a management platform for LPWA networks. The company has a total funding of USD100 million. Apr 2015 ProSyst Acquisition Founded in 1997 in Germany, ProSyst developed software and middleware solutions for IoT gateways based on Java and OSGi standard. After the acquisition, ProSyst was merged with Bosch Software Innovations and its technology formed the ProSyst Gateway Software component of Bosch IoT Suite. ProSyst augmented Bosch s device management capabilities and extended the company s device management support to a wider range of protocols. Oct 2011 Inubit Acquisition Inubit was a German software provider that developed and offered business process management (BPM) solutions for enterprises in verticals such as utilities, automotive, insurance, logistics, healthcare and telecommunications. The inubit suite supports integration between internal and external system applications and allows enterprises to connect and manage different aspects of their business such as their workforce, assets, business partners and customers. The solution is part of Bosch BPM offering which supports the IoT Suite. Sep 2008 Innovation Software Technology Acquisition Founded in 1997 in Germany, Innovation Software developed rule-based enterprise software. The company offered a range of products including customer relationship management, compliance and credit risk platforms for different verticals such as financial, logistics, healthcare and energy management sectors. Innovation formed the core of Bosch Software Innovation subsidiary. Analysys Mason Limited

7 Product summary Figure 6: Bosch IoT Suite s Services Product Function Description Bosch IoT Analytics Analytics Anomaly detection Bosch IoT Hub Data ingestion Normalisation Protocol translation Bosch IoT Permissions User management Authentication and authorisation Provides analytics services based on anomaly detection which allow for device data validation and detection of devices sending irregular messages which in turn can be used in predictive maintenance. Facilitates communications and messaging between devices, applications and services. It includes protocol connectors that allow data ingestion and normalisation from different types of devices. It is available on Bosch IoT Cloud as a pay-as-you-go model and integrates with other Bosch IoT Suite services. Supports the multitenancy feature of the platform which applies managed access rules and allows authenticating and authorising multiple users, groups, roles, applications and tenants. It allows enterprises to allocate and monitor permissions accordance with compliance requirements. Bosch IoT Remote Manager (and ProSyst Gateway Software) Device management Provides backend remote management and control features for gateways and devices including lifecycle management, firmware updates, remote diagnostics and security administration. It supports open APIs and open standards such as OSGi, TR-069 and OMA-DM. It is based on the ProSyst technology and is supported by the on-premise ProSyst mprm device management agent. The service is available on Bosch IoT Cloud, AWS or SAP clouds. Bosch IoT Rollouts Firmware updates Over-the-air (OTA) Bosch IoT Things Digital twin Device registry Search index Enables and manages largescale firmware update rollout for gateways, controllers and devices through cables or over the air. Devices are either connected directly to service using an optimised interface or indirectly through device management servers. The service is available on Bosch IoT Cloud, AWS or IBM Cloud. A platform for creating and managing device digital twins and device inventory. It supports search indexing services to allow the identification of specific devices based on their attributes and domains Analysys Mason Limited

8 Use cases Figure 7: Bosch s selected IoT use cases products Customer Country Scope The Yield Australia The Yield is an agricultural technology startup offering IoT solutions to connect farms. The company used Bosch IoT Suite capabilities to develop and launch its end-to-end agricultural solution for irrigated crops; Sensing+, in October The solution allows farmers to use data to facilitate tasks and reduce guesswork in aspects such as observing the weather conditions and calculating irrigation requirements. The solution, based on microclimate sensors, a central on-farm gateway and Bosch s cloud platform, combines the real-time data with predictive analytics to produce a 7-day forecast about crops conditions and requirements. The solution also allows farmers to specify certain rules to alert about critical events such as frost. MANN+HUMMEL Singapore MANN+HUMMEL is a German manufacturer and a provider of filtration solutions such as liquid and air filters, intake systems and thermal management components. Through its IoT Lab in Singapore, the company developed and trialled its solution OurAir that addresses air quality problems in metropolitan cities. The solution uses sensors distributed across the city to collect and analyse data about the level of pollution and provides information to customers about their surroundings environmental conditions and their filtering systems. The company is planning to install devices per year and turned to Bosch IoT Suite for its device management features. The ProSyst gateway agent in combination with the Bosch IoT Remote Manager provided the required remote monitoring of the device fleet. It also enabled device grouping, configuration and software updates. QIVICON/Deutsche Telekom Germany QIVICON is an industry alliance, founded by Deutsche Telekom to develop a multi-vendor wireless solution for the smart home market. The QIVICON platform offers a unified set of features for devices from different providers including energy providers, household appliance vendors, telecoms companies and security solutions providers. The QIVICON solution consists of a smart home platform, gateways, devices, apps and services. Deutsche Telekom is using Remote Manager cloud service and gateway software to enable device management of its gateways, routers and devices. The solution enables Deutsche Telekom to scale its deployments and remotely configure and monitor the installed QIVICON Home Base units in addition to performing firmware updates. Analysys Mason Limited

9 Analysis: strengths, weaknesses, opportunities and threats STR ENGTHS Bosch offers a comprehensive and modular device management solution with multiple microservices offered at different pricing tiers. The company has also built a large partner ecosystem. Bosch is experienced in the operational technologies and uses of the platform internally with different group units. These support the continuous development and refinement of the platform capabilities to cope with the growth and changes in industrial applications requirements. Bosch SI strong marketing efforts demonstrate its capabilities across multiple channels including industrial events and social media. OPPOR TUNITIES Bosch Software Innovations has a good presence in the Asian-Pacific market with locations in Singapore, Tokyo and Shanghai. The group as a whole showed growth in the region and aims to double its sales there by Bosch s recognition in the German market, supported by its newly added local cloud hosting capabilities position the company as a trusted partner for sensitive data applications such as healthcare. WEAKNESSES Although Bosch has its own IoT Cloud that is open to developers, the company is yet to leverage its open platform approach and partner ecosystem to establish an open app marketplace to accelerate the platform adoption. Bosch does not provide details of many IoT use cases. Of those showcased, the Remote Manager and ProSyst Gateway Software components are the main functions highlighted. The rest of the services such as IoT Analytics are not featured quite enough. Bosch needs to increase the promotion of its other services, especially IoT Analytics THR EATS Bosch focuses on device management and relies on partners such as PTC ThingWorx and Software AG to complement the IoT stack with features like application enablement and advanced analytics. Such partners are also competing directly with Bosch in the device management layer. Despite the recent investments in edge analytics, Bosch has not made a significate move to compete in this market. Other providers are eager to promote such capabilities. Being late to support edge analytics features can devalue Bosch s IoT offering for industrial applications. Bosch s ambition to build its own cloud infrastructure might slow its IoT product development efforts. Analysys Mason Limited

10 About the author Ahmed Ali (Senior Analyst) is the lead analyst for Analysys Mason's IoT Platforms and Technology research programme. His research covers IoT software, applications and solutions used by service providers to enable their IoT offerings. Prior to joining Analysys Mason, Ahmed worked as a senior analyst at ABI Research for more than 3 years, where he was part of the next-generation mobile network research programme, covering wireless and core mobile markets like small cells, in-building solutions, network virtualisation, unlicensed spectrum, and other 4G and 5G technologies. Ahmed holds a master's degree in Electronics Communications and Computer Engineering from the University of Nottingham and a bachelor's degree in Electrical Engineering from the University of Khartoum, Sudan. Analysys Mason Limited

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