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

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.

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