The four steps of Digital Transformation. Kai Uwe Beecken Principal Solutions Specialist, IoT, Microsoft

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1 The four steps of Digital Transformation Kai Uwe Beecken Principal Solutions Specialist, IoT, Microsoft

2 Here s what we re covering Four steps of digital transformation Differences between PaaS & SaaS Business opportunities by partner type Digital transformation case study

3 Digital Disruption and the 4th Industrial Revolution Mechanized production Mass production Automated production 1780s 1870s 1970s Digitized production 2015+

4 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

5 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

6 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

7 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

8 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

9 Transformation in your Market offering Profitability Customer relationships From MRI Scanner to Remote diagnostics subscription From Industrial Machine to Machine uptime subscription From Thermometer to Temperature Control Service From hardware margin to subscription margin From capex to capex+opex From transaction relationship to annuity relationship From procurement relationship to business owner relationship

10 IoT Partner Value Chain End Points Security Connectivity Services Business Consultants Distributors Developers Regulators

11 IoT as a service models Suitable for more complex solutions requiring high controllability, high customization, with low endpoint volume Suitable for less complex solutions and common use cases requiring low degree of customization, with high endpoint volume

12 IoT as a service models Suitable for more complex solutions requiring high controllability, high customization, with low endpoint volume Suitable for less complex solutions and common use cases requiring low degree of customization, with high endpoint volume Partnership Opportunities for PaaS providers: System Integrators for integrating customer apps into platform ISVs for delivering companion apps for customer integration Cloud Service and Connectivity Providers for IaaS services Partnership Opportunities for SaaS providers: ISVs for app dev Channel partners for customer acquisition Cloud Service and Connectivity Providers for IaaS services CRM partners for customer data management

13 IoT as a service models in Microsoft Azure IoT Solution Accelerators Solution accelerators for customers with cloud solution expertise and the need to fully customize Azure IoT Central Fully managed IoT SaaS No cloud solution expertise required Built on the same Azure IoT Platform Services SaaS PaaS

14 Opportunities for P&L transformation by business type

15 Opportunities for P&L transformation by business type Device Builder / OEM New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Insight on how product is used in the field. Decrease manufacturing downtime by predicting and resolving issues before they happen. Product as a service. Attach and monetize new services. Optimize customer service & maintenance.

16 Opportunities for P&L transformation by business type ISV New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Enhance customer experience by understanding how product features are used. Increase speed to market and reduce cost through process automation. Subscription-based services. Consumer apps represent a new channel for future services.

17 Opportunities for P&L transformation by business type System Integrator New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Remote monitoring of systems and processes. Remote troubleshoot and problem resolution. Service engineer arrives with right parts to fix physical infrastructure. Selling repeatable solutions and retaining IP. New services offerings such as business consulting, data science and device lifecycle management.

18 Opportunities for P&L transformation by business type Solution Aggregator New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Remote monitoring of systems and processes. Single relationship and billing for customer including applications, infrastructure and cloud. Aggregation of hardware and softwarebased connected device solutions for specific verticals. Subscription-based revenue. Higher margin for higher value services than pure hardware distribution.

19 Introducing an example of all four steps of business model transformation through broad ecosystem partnership

20 Connected Buses Image needed Solution Aggregator Aggregate multiple solutions Single platform for end-customer Simplified billing Cloud Solution Provider Transit and Commuter solutions Passenger wifi access Fleet management Digital signage CCTV security Driver panic button

21 How Synnex gets value from all 4 stages Business Insights Operational Efficiencies New Business Models New features & Revenue streams Fleet management and GPS location Video-based security Digital signage enables remote management of advertising collateral Single platform for the end customer (1 app instead of 6) Single vendor and billing (Synnex) Modular platform of services on top of wifi solution Inclusion into Microsoft Smart City blueprint offering Service-based margins Recurring revenue stream from Digital Signage and other services. App represents new channel to customer for delivery of future services. Ongoing solution management services.

22 Agenda TIME SESSION SPEAKER

23 Thank you 2018 Microsoft Corporation. All rights reserved.