As every company becomes a software company, digital value creation will increasingly happen across industry borders
When an agriculture machinery manufacturer equips its latest tractor with more than 300 IoT sensors, 100+ controllers and the ability to process more than 15,0000 measurements per second, it doesn’t only transform the functionality of the tractor. It fundamentally alters the logic of value creation. From having been an isolated physical product, the tractor is now a data generating unit, feeding in to and communicating with an ecosystems of services, ranging from weather forecast-services, commodity pricing markets and crop yield businesses.
Or, when a smart watch manufacturer adds the ability to monitor heart rate and glucose level in real time, it similarly not only transforms the product: it also immediately generates data of value to an entire health ecosystem, including wellness companies, insurers and food manufacturers.
In both cases, the logic is the same. As every company become a software company generating proprietary data,
what previously were isolated parts in an implicit ecosystem now become interconnected parts in explicit digital ecosystems: with far-reaching consequences for the business landscape. Are we a farming equipment manufacturer or a farming data platform? Are we selling a health data tracker or optimal health as-a-service?
Regardless of answer, platforms and ecosystems are likely to provide better guidance for tomorrow's enterprises than yesterday’s industry boundaries and value chains.
“Companies like Uber and Airbnb have created a whole new type of business model compared to what we were doing just a few years ago. This is only the beginning of what´s to come.”
SENIOR VP, HEAD OF BUSINESS AREA DIGITAL SERVICES ERICSSON
This article is part of our report: 12 predictions for Tomorrow's Connected Enterprise read the rest of the predictions here:
Tomorrow's Connected Enterprise