Bosch is a things company at heart but will leverage new capabilities to capitalize on emerging data opportunities

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Bosch takes off its tie

To achieve its current position, Bosch self-admittedly had to transform from a traditional components manufacturer to an evolutionary technology and services company. Bosch CEO Volkmar Denner characterized this transformation as the “taking off of the tie” as the company evolves from a stiffer, traditional mindset to one more like that of Silicon Valley, which focuses on agility, innovation and attracting young talent through corporate flexibility. Denner suggested that while this was indeed a technological development, the path to transformation necessitated a culture change. To help, in 2018 Bosch brought Dr. Michael Bolle on board as chief digital officer, tasked with organizing companywide digital transformation efforts, corralling shadow IoT efforts, and breaking down business silos to share resources, knowledge and capabilities.

Denner indicated Bosch has been implementing proto IoT, often termed telematics, for decades, but its evolutionary journey started in earnest in 2014 as the company began realizing the disruption IoT, AI and other emerging technologies would cause within its business and wider market. To outmaneuver peers and expand the reach of its business, Bosch began taking steps toward transformation:

  • Bosch’s journey began in 2008 when it acquired Innovations Software Technology. It was the foundation of the newly founded Bosch Software Innovations and was positioned as corporate Bosch´s IoT software and system unit and was leveraged to begin building a horizontal software foundation to link together Bosch’s vertical businesses’ efforts in connected equipment.
  • From 2014 to 2016, Bosch began focusing on enabling IoT inside its larger business. This included making strategic acquisitions to build a stronger horizontal software footing, building the Bosch IoT Suite, establishing the Bosch Center for Artificial Intelligence, and setting the goal for all of the company’s electronic products to be connectivity-enabled by 2020. By the end of 2018, 52 million IP-enabled products were sold by Bosch.
  • Starting in 2016 Bosch began to emphasize the digitization of existing ecosystems and the scaling of IoT within those ecosystems. Bosch also started leveraging its Bosch IoT Suite to corral data from a client’s entire operations and using AI to generate elevated insight.

To help speed its transformation, Bosch acquired inubit AG and ProSyst early in its journey to enhance its IT foundation in the application and platform space. But Bosch has also been investing organically in technical talent. Bosch leadership indicates the company had 69,500 associates in R&D as of 2019, a significant jump from when the company began its journey (though an exact compare was not provided); 27,000 software developers, which is a sizeable pool for a manufacturing company; and more than 5,000 dedicated IoT developers. Denner indicated AI is a cornerstone of Bosch’s IoT strategy and that the company has over 200 dedicated researchers in the field. Bosch is leveraging all of this talent to not only improve its verticalized products and services but also to grow its capabilities horizontally, akin to an IT company. The Bosch IoT Suite, which is examined in depth in this report, aims to serve as a foundational layer to support customer deployments across multiple verticals, in addition to enhancing the company’s own capabilities.

Bosch ConnectedWorld is an IoT and digital transformation conference hosted annually in Berlin. It stands out in the sea of IoT conferences due to its emphasis on operational technology (OT), with sessions often headed by industrial partners talking about industrial challenges, and its use as a platform for EMEA-based technology and industrial companies to highlight their products and strategies in a technology area that is sometimes dominated by U.S.-based messaging. Bosch ConnectedWorld has grown from 500 attendees in 2014 to nearly 5,000 in 2019, indicating customers’ increasing interest in digital transformation, as well as the power of Bosch’s messaging around connected products.

CSP spend on edge compute infrastructure will grow at a 76.5% CAGR to over $67B in 2023

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According to TBR’s 2Q19 Telecom Edge Compute Market Landscape, cost optimization of the network is the primary initial justification for CSPs to build out edge compute infrastructure, with new revenue from low latency use cases expected to materialize in a few years. This initial edge build-out will lay a foundation for CSPs to support new business models as they emerge, particularly as it pertains to low latency services.

Cost savings from the use of edge sites stem from infrastructure virtualization and real estate footprint consolidation as well as bandwidth optimization. One of the key areas of cost savings for CSPs is the use of white-box hardware in their virtualized networks. According to TBR’s research, white-box hardware can cost up to 50% less than black-box hardware. This represents significant cost savings to CSPs that adopt white boxes at scale. Webscales already widely use white boxes in their central data centers, and leading CSPs such as Rakuten, AT&T, Verizon and Telefonica are beginning to build their edge sites using almost exclusively white boxes. The use of white boxes will make it economically feasible for the capillary network to be built out, as cost feasibility is one of the primary inhibitors to edge build-outs.

CSPs are in the experimentation phase of testing new business models that leverage edge compute, with low latency services being the focus area. Though there are myriad potential use cases that would require low latency connectivity, such as connected transportation and AR/VR gaming, the business case remains unclear and the theoretical investment to enable and support said use cases is high. TBR believes it will take a few more years before new revenue-generating use cases for the network that require edge compute become commercialized and begin to contribute to CSPs’ revenue.

Lenovo Accelerate 2019 stresses vertical integration, process agility and people

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Experience tells these Lenovo executives that the hard work of driving execution at scale and transforming channels lies ahead

While Lenovo has turned the corner on revenue, profits will come from driving scale through the retooled operation. Known challenges outlined during the event include:

  • Services: Lenovo DCG services at the time of the acquisition of the IBM x86 line consisted of holding the paper while IBM executed on the service. From there, Lenovo has built its own break-fix programs, added consulting and education, and aspired to build out vertical solutions through collaborative work with partners and customers. Tuck-in acquisitions to rapidly acquire repeatable frameworks and subject matter expertise will likely arise as Lenovo goes about the painstaking process of creating a people-centric business necessary for solution assembly and maintenance and management.
  • Direct go-to-market pivots: Lenovo will organize its selling functions around solution stacks in addition to general territory reps. To gain the hearts and minds of the traditional territory reps, the company has added monitoring of storage and services attach to quotes to break the existing sales mindset of thinking in terms of server units. Lenovo has multiple transformational initiatives occurring within its go-to-market motions, in some ways reminiscent of the old Hewlett-Packard Co. selling motions of the 1980s and 1990s. Lenovo plans to have more dedicated selling units with deeper domain expertise around:
    • Targeting the hyperscale market where the lead sales point of contact needs deep engineering expertise to engage in capturing the design requirements for custom-engineered systems.
    • Adding dedicated storage reps to push harder to scale out the storage product cross-sell opportunities from the NetApp alliance and China-based joint venture. This team will be led by Dave Mooney, who joined Lenovo shortly after the event as the VP of Worldwide Storage Sales. Motruney has over 25 years of storage experience, most recently as the VP of Worldwide OEM Sales for NetApp.
    • Taking a vertical approach to IoT. While not necessarily distinct from competitors, Lenovo will be taking specific multivendor collaborations built on a custom basis and hardening them to be delivered as solution bundles at scale.
    • Leveraging TruScale to entice channel partners to sell through a new business model — reinforced by arming its channel partners with the entire ThinkSystem and ThinkAgile stacks behind this push.
  • Channel first: Many a firm has made this claim before, and Lenovo is no different. Lenovo claims it has made the activity revenue neutral and has put teeth into the policy regarding noncompliance among its direct sales force. Time will tell in terms of its success.
  • “As a Service” monetizations: Lenovo’s established Device as a Service (DaaS) commercial offering is being replicated for the data center in what it calls its TruScale Infrastructure Services program. Lenovo makes great pains to assert TruScale is not just a new form of operating leases. For DaaS, Lenovo will take back underutilized devices and bring them back into service when the customer requires. For the data center, the service arguably provides true public cloud consumption opex provisioning by only charging for the amount of data storage used on premises. Future service innovations outlined under nondisclosure agreement (NDA) make this offering a service to watch from Lenovo over the next several years.

Interchangeably called Lenovo Transform 3.0 and Lenovo Accelerate, the three-day combined customer and analyst event made several things abundantly clear. Lenovo believes it has turned an operational corner, that it has the right people and processes in place, and now all Lenovo has to do to drive growth and lift margins is to execute on these hardening operational best practices at scale across an ever-expanding array of technology assets including a growing contribution of software and services to offset persistent macroeconomic pressures on hardware margins.

Informatica touts AI benefits with a caveat: Data cleanliness and management are critical

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To be widely effective, AI needs clean data and cloud scale

Informatica World 2019’s focus was on customers of all backgrounds and sizes leveraging AI to accelerate digital transformation. While AI is not a new or novel discipline, cloud computing has supported its growing accessibility by enabling scalable, cost-effective data processing. In that spirit, Informatica has forged partnerships with the three most prominent public cloud brands, Amazon Web Services (AWS; Nasdaq: AMZN), Microsoft (Nasdaq: MSFT) and Google Cloud (Nasdaq: GOOGL), and put these three Platinum partners on stage throughout the event’s keynotes and breakout sessions.

Google Cloud

Google Cloud was represented on the keynote stage by new CEO Thomas Kurian, who harped on both data processing at scale and the idea of ensuring you’re informing AI and analytics with clean and comprehensive data sets. Informatica and Google jointly announced that as of the conference, Informatica’s Intelligent Cloud Services (IICS) and Master Data Management (MDM) solution were available on Google Cloud, better enabling customers to move their data warehouses to Google Cloud Platform, leverage Informatica’s products in the environment, and run analytics through BigQuery and Google’s AI capabilities.

AWS

Ariel Kelman, VP of Worldwide Marketing at AWS, joined Informatica CEO Anil Chakravarthy on stage to describe how AWS is innovating and enabling customers with AI, but more importantly to explain the relationship between Informatica and AWS in supporting their joint customers. Kelman admitted that “a lot of [AWS’] services need data and a lot of that data is still on premises.” Though AWS is bringing its services into customers’ environments through AWS Outposts, customers also want help bringing their data to the cloud. In addition to supporting integration between Informatica products such as Power Center and IICS with Amazon Redshift, the partners announced a joint offering with Cognizant (Nasdaq: CTSH) that enables customers to complete a free, self-service data migration assessment. The assessment service leverages Informatica Enterprise Data Catalog on AWS and Cognizant’s data-to-cloud migration assessment and strategy services to help customers begin planning and mapping their data migrations to cloud. The service is intended to accelerate customers’ data migrations to AWS infrastructure while ensuring enlistment of Informatica data management products and Cognizant consulting and systems integration services in the process.

Microsoft

While Microsoft and Informatica did not make a formal announcement on stage, Microsoft had a large presence in the final keynote of Informatica World and in breakout sessions, highlighting how Microsoft approaches AI innovation and use cases across various industries and customer roles. At the outset of the event, Informatica announced its support of the Microsoft Common Data Model (CDM), data frameworks meant to ultimately reduce data silos across workloads and applications through data model standardization on Microsoft Azure. Informatica’s support of the Microsoft CDM, which is a key aspect of the widely discussed Open Data Initiative between Microsoft, Adobe (Nasdaq: ADBE) and SAP (NYSE: SAP), enables customers to utilize Informatica’s portfolio of products and solutions to manage data across applications and enable analytics and business intelligence efforts across the data landscape. TBR believes there’s a clear opportunity for Informatica to similarly extend its Customer 360 and Customer 360 Intelligence solutions into the Open Data Initiative alliance, particularly to bring greater light to the capabilities brought with Informatica’s recent acquisition of AllSight, a storyline that was overshadowed at the event despite its deliberate inclusion in the narrative.

Disrupting, but not disrupted: Accenture pivoted to become a solutions broker through innovation

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No single vendor can do it on its own, not even Accenture

While maintaining a workforce bench that can operate in hybrid IT environments remains key to Accenture’s long-term success, managing relationships with core technology partners also adds another building block to the company’s foundation. As seen with talent-based conversations, discussions around Accenture’s ecosystem were part of almost every single presentation during the two-day conference. While Accenture maintains relationships with over 200 technology partners, SAP (NYSE: SAP), Oracle (NYSE: ORCL), Microsoft (Nasdaq: MSFT), Salesforce (NYSE: CRM) and Workday (Nasdaq: WDAY) are the top five platforms that truly move the needle for the company, helping it generate approximately 40% of services revenue.

From codeveloping solutions to engaging in joint go-to-market and sales efforts, Accenture recognizes the need to prioritize solutions with specific partners to operate in a more agile way, as the company rapidly departs from being truly technology agnostic. TBR does not necessarily think this is a bad move considering that the majority of Accenture’s clients operate in one or more of these technology environments, which alleviates the pain points around migrating applications workloads from on-premises only to hybrid IT environments. Additionally, according to TBR’s digital transformation insights research, the majority of DT buyers are in the “extension” phase, which entails buyers adding disruptive technology that allows for significant improvements to an existing ecosystem.

While Accenture, like many of its consultancy peers, often approaches client discussions with business outcomes in mind, maintaining functional expertise around a particular technology usually tips the scale in Accenture’s favor, considering that the IT buyer still maintains an active role in the DT services purchasing cycle.

Accenture Industry Analyst Conference 2019 was held at Accenture’s Innovation Hub, located in the Salesforce Tower in San Francisco. Accenture’s relationship with Salesforce, one of the top five platforms contributing to Accenture’s sales, has evolved over the years, especially as Accenture has made eight Salesforce-centric acquisitions, enabled by the Accenture Salesforce Business Group, to reach its current status. The two partners are well intertwined, evidenced by the fact that Accenture is the only partner that works on product and service cocreation with Salesforce as well as the global scale and commitment to training Accenture resources on Salesforce technologies including over 16,500 Salesforce-skilled professionals, 17 global hubs and over 55,000 training hours last year, among other attributes.  

TBR does not discount the importance of SAP, Oracle, Microsoft, Workday or any other partners — the first three of which were highlighted heavily during the conference through myConcerto for SAP and Oracle and Accenture Microsoft Business Group as well as through client use cases. However, we think the opportunity around Salesforce is somewhat unique considering it is born-on-the-cloud technology delivered in an “as a Service” model, toward which Accenture is moving its legacy and new business.  

During the two-day Accenture Industry Analyst Conference 2019 in early May, Accenture (NYSE: ACN) hosted close to two dozen analysts at its recently opened flagship Innovation Hub, which is strategically located in Salesforce Tower in San Francisco. As part of the event’s “Leading the epic disruption” theme, key topics, including Accenture’s investments in the new “new,” its partner ecosystem and its talent, were widely discussed, solidifying TBR’s view of Accenture as a market leading vendor but also raising questions about what is next for the company and what kind of disruption Accenture is facing and anticipating.     

Dell Technologies knew what it was doing all along

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Dell Technologies’ strategies

Deliver ‘essential infrastructure’

Dell Technologies’ key strategy is to deliver on what it promises: comprehensive and competitive essential infrastructure, specifically, hardware and systems software for PCs, data centers and cloud vendors. Dell Technologies fills in this spectrum with a mantra of “from edge to the core to the cloud,” where edge includes PCs, gateways and near-the-edge data center hardware. By “core,” Dell refers to on-premises data centers. Dell has been investing in R&D and in breaking down internal silos to compete in its core business, with a successful recent track record. For the last two years, part of this strategy included consumption-based pricing to compete with cloud offerings. Dell Technologies’ main competitors, Hewlett Packard Enterprise (HPE) and Lenovo, have similar strategies, including flexible pricing.

‘Better together’ with VMware

The company differs from its competitors in its ownership of VMware, a provider of popular software products that provide an abstraction layer between workloads and hardware, allowing flexibility and efficiency. VMware products run on all vendors’ hardware — a necessity for VMware’s continued presence in the market. Dell Technologies seeks to leverage its relationship with VMware to make it easier for customers to benefit from VMware solutions when they buy them on Dell hardware. This “better together” approach is delicate; “better together” implies “worse apart.” One company spokesperson described Dell Technologies’ approach as offering a combined solution to those who prefer Dell hardware or are indifferent and continuing to offer separate solutions for customers who prefer competitors’ hardware.

With or without Dell hardware, VMware’s solutions are very profitable, and contribute approximately one-third of Dell Technologies’ operating profit. Maintaining VMware’s strong position in both core and cloud markets is critical to Dell’s continued success. For this reason, Dell and VMware must ensure that Dell hardware and VMware cannot be too much better together. VMware also plays a role in Dell’s cloud strategy by playing key roles in the company’s multicloud offering, Dell Technologies Cloud, providing a way to work with multiple clouds, both public and on premises. By providing the ability to move workloads between public and on-premises clouds, Dell makes it easier to bring workloads back on premises, where Dell’s margins are stronger and where, the company claims, customer operating costs are often lower.

Dell Technologies World 2019 was, to a large extent, a celebration of the success of a long-term plan. Dell has emerged from a sequence of going private, shedding many businesses, acquiring a huge federation of related business, and then going public as a healthy, growing company. Despite some continuing challenges, Dell Technologies has largely achieved the goals of an ambitious plan to become the dominant provider of “essential infrastructure,” which includes computer hardware, systems software and supporting services “from the edge to the core to the cloud,” including PCs, cloud hardware and data centers.

Leading CSPs pull forward 5G-related investments, driving CAGR increase in the North America TIS market

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According to Technology Business Research, Inc.’s (TBR) Telecom Infrastructure Services North America Market Forecast 2018-2023, the CAGR of the TIS market in North America increased compared to last year’s forecast as leading communication service providers (CSPs) in the U.S. committed to accelerate and broaden the scope of their 5G-related initiatives.

In the past 12 months, the five largest mobile operators in the U.S. have made formal commitments to deploy 5G at scale across their U.S. footprints over the next few years. This acceleration in deployment timetables is primarily in response to competitive and government pressures. Spend pertaining to these overarching trends will be partly offset by cost savings from legacy infrastructure decommissioning, cloud, and NFV/SDN as well as synergies that are realized from M&A.

Though 5G will be the primary driver of the TIS market in North America over the next five years, digital transformation-related initiatives, which encompass network and business model transformation, will also support TIS market development. With the competitive landscape in the U.S. facing significant disruption from M&A events and new entrants, CSPs will be under pressure to respond by continuing their transformations. Digital transformation requires rearchitecting networks to become cloudified, virtualized and intelligent. AT&T (NYSE: AT&T), Verizon (NYSE: VZ), Comcast (Nasdaq: CMCSA) and T-Mobile (Nasdaq: TMUS) are expected to drive the bulk of digital transformation-related spend through the forecast period.

TBR’s Telecom Infrastructure Services North America Market Forecast provides annual analysis and forecasting of the deployment, maintenance, professional services and managed services markets for network and IT suppliers.

In IoT, Oracle means business

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“Business first” is the resounding message from Oracle regarding IoT. The company leaps over the technical morass and ecosystem complexities, which often bog down any digital transformation discussion, and instead starts with the business discussion: What is your pain point? Oracle has deep relationships with a wide customer base due to its legacy solutions, including ERP and supply chain management. Oracle leverages this vendor standing to start discussions with VPs and line-of-business (LOB) managers on how Oracle can improve the client’s business outcomes. Once a set of KPIs are agreed on, Oracle and its partners work backward with operational technology (OT) and IT teams to reach the business outcome.

TBR believes Oracle has made great strides with its business outcomes focus. The first time we talked to company executives, in September 2017, they seemed to be following the traditional route of going through IT, as IT vendors tend to do. However, the company faced similar roadblocks to its peers. Tribalism inside the organization — OT versus IT versus C-Suite — made collaboration inside a customer organization difficult. Oracle found itself selling to customer IT, with customer IT having to sell to management, and Oracle admits this approach was not working. And the issue was not just with the audience; what Oracle was selling — IoT capabilities and solutions — was also an issue. Now, the company is upselling features attached to existing products.

Oracle retooled its IoT go-to-market strategy to focus heavily on selling business outcomes and making its platform accessible to the business user. Below, we outline a few important steps Oracle has taken.

Portfolio simplification

Figuring out IoT is difficult for customers. It is not always clear which direction to go in, which use case to chase or how technologies will benefit the business. Ultimately, the number of paths to follow can lead to choice paralysis. Oracle addressed this with a narrower (but not less impactful) portfolio with five primary applications, or packaged solutions, aimed at specific business goals:

  • Asset monitoring: Focuses on asset health, utilization, availability and predictive maintenance
  • Production monitoring: Manufacturing equipment and production line monitoring and prognostics
  • Fleet monitoring: Monitors shipments, fleet vehicles, driver behavior and costs
  • Connected worker: Focuses on worker safety by monitoring workers and their environments
  • Service monitoring for connected assets: Allows customers to engage in value-added services to their end customers through incorporating asset monitoring and manipulation capabilities into products

Red Hat builds the digital transformation autobahn, where developers are king of the road

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Red Hat production systems curate community IP into a simplified horizontal platform, paving the way for scaled innovation

In a 2015 conference for financial analysts, Red Hat CEO Jim Whitehurst declared victory in commoditizing the enterprise OS market into RHEL and Windows Server, while outlining Red Hat’s intentions to do the same thing to the (then) emerging PaaS layer with OpenShift.

The closing guest speaker during the Red Hat keynote address at the 2019 summit was Microsoft (Nasdaq: MSFT) CEO Satya Nadella, who announced Azure Red Hat OpenShift. While it might still be premature to declare victory in fulfilling that aspirational objective from 2015, it certainly can be said that Red Hat has made significant progress in a short period of time.

RHEL and OpenShift represent the curation pillars for open upstream community innovations, coupled with Red Hat’s decades of open-source and service experience to deliver a capabilities-based advantage to its users. Red Hat represents the virtuous cycle of trusted platform delivery, user-contributed innovations, and Red Hat production-grade delivery of those innovations back to the community via a platform layer that is increasingly easier to deploy.

RHEL 8 delivers additional simplicity and automation capabilities to allow operators to better facilitate developer innovation

Red Hat heralds RHEL 8 as a significant improvement over RHEL 7, best illustrated by the fact that the upgrade process to RHEL 8 constitutes a simple point-and-click operation, after which automation can take over the rest of the process in seamless fashion.The latest release is said to be designed for applications to run across open hybrid cloud environments, addressing the enterprise hybrid reality. Before its official release to market at the summit, there were over 40,000 downloads of RHEL 8 in beta, which underscores pent-up demand for the release and also helped Red Hat to enhance the operating system based on invaluable feedback from those beta users.

TBR attended the Red Hat (NYSE: RHT) Summit, which featured the usual slew of product announcements. This year, the company focused intently on enhancements to Red Hat Enterprise Linux (RHEL) 8 and Red Hat OpenShift 4, which are the foundational products for the enterprise. However, more interesting were the general discussions throughout the summit about Red Hat’s business model and cultural uniqueness, which contribute to the company’s success in curating openly sourced IP into enterprise-grade technology products underpinning an ever-increasing share of business software. The value of its people and processes were regularly emphasized by reminding attendees that IBM (NYSE: IBM) is paying $34 billion for a $3.2 billion company that owns no IP.

In its third annual blockchain summit, EY calls this ‘Year 0’ for blockchain

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EY lays out its digital blueprint as ‘now, next and beyond’ with blockchain use cases easily fitting into the construct

This fundamental playbook repeated in many of the use cases discussed in breakout sessions at EY Global Blockchain Summit:

  • Early efforts focus on cross-collaborative business entities establishing business rules.
  • The rules become the digital contracts.
  • The first use case is either low-dollar-value or intracompany; the sponsoring enterprise working with EY becomes “customer zero.”
  • Once fully operationalized, EY and the client partner look for ways to enroll additional participants to:
    • Broaden the use case into an industry utility
    • Extend the underpinning business logic into adjacent industries for the repeatable capability to build out industry utilities

Gaming: The editors for the EY-Microsoft playbook

Much of the content shared at the 2018 event revolved around EY’s ongoing collaboration with Microsoft to deliver a blockchain royalty payment system to track developer community activities in the gaming space. This year, EY and Microsoft touted the collaboration on many different levels that easily fit into the “now, next and beyond” construct.

EY Tesseract: A clear view not to be confused with a short distance

The Tesseract-like aspirational objective is autonomous vehicles; period. To achieve the objective requires prototyping the IoT sensoring and business rules ahead of when specific technologies and revised public policy regulations have been hardened. Interim steps revolve around building out the ecosystem participants required to allow autonomous vehicles to be serviced absent human accompaniment as the vehicles course through the physical world based on their digital instructions.

The third annual EY Global Blockchain Summit gave an indication of the rapid acceleration in adoption that had EY describing this as “Year 0.” With hockey stick charts for the number of proof of concepts (POCs) and live applications, blockchain appears poised to deliver on its anticipated promises to transform business interactions and greatly reduce operating expenses while creating new business services networks. The event was held at 32 Old Slip in the heart of New York’s financial district with several hundred attendees and 28 breakout sessions organized in four tracks consisting of blockchain business applications (where TBR spent most of its time); blockchain assurance, tax & compliance implications; financial services and the token economy (where TBR attended a session on decentralized finance); and blockchain technology.