Interview with Tony Liu, Investment Manager, Advantech Corporate Investment Division
With rapid ongoing progress in the development of IoT, Advantech is committed to working with its partners across a wide range of industrial sectors to achieve mutually beneficial outcomes through an innovative co-creation model.
Co-Creation Strategies and Business Models
Advantech found that the process and development of IoT solutions is hard to fully realize and complete for a single person, business, or entity, so it was important to establish a supportive ecosystem for different sectors with the aim of accelerating business growth together with partners and joint venture companies. In 2018, Advantech announced its co-creation strategies for the next phase of IoT development. Mr. Tony Liu, Investment Manager of Advantech Corporate Investment (ACI) Division, described the co-creation strategy and business model. “We provide our hardware and WISEPaaS software to two types of developers: solution-ready package (SRP) developers and domain-focused systems integrators (DFSI).
SRP developers typically have their own unique solution in a specific domain. We bundle our platform together with their solution to produce new SRPs. Then, we help them promote and sell these SRPs to customers worldwide.
Our DFSI partnership model is focused on regional and vertical markets, whereby we offer existing SRPs to our regional partners with system integration services for their end customers. This involves training to help DFSI partners become more familiar with our SRPs and the WISE-PaaS platform so they can deliver the ‘last mile’ service to customers. They also offer customization and after-sales support while establishing themselves as key domain specialist partners to work with in that region in the future. This creates a win-win situation going forward.”
Besides mergers and acquisitions, the co-creation program will be the new key initiative of ACI for the upcoming years. Advantech looks for new businesses to engage with and potentially partner with; then starts discussions to identify the key actions and directions of the co-creation plan, as well as the roles and responsibilities of each party. Mr. Liu further stated, “ACI team members act as program managers and team facilitators of the co-creation program or joint venture.”
Co-Creation Partners and Industry 4.0
The attributes and capabilities of the ideal co-creation partner are extensive domain knowledge of specific sectors and a strong regional presence with sufficient resources. Mr. Liu mentioned, “A couple of the typical DFSI co-creation partners we have joint ventured with are Nippon RAD and YCM. Based in Japan, Nippon RAD is an IT-oriented SI for various enterprise and factory solutions with an emphasis on ERP, CRM, customization, and consultation.
Last year, Advantech invested almost 20% equity in Nippon RAD so we could empower them to become our DFSI partner in the factory sector. We trained their people to use our WISE-PaaS software solution, and our sales team in Japan started to provide iFactory-related projects that they adopted for their own projects. Our sales people trained them to offer the last mile of sales and customization support.
In this way, Advantech’s sales team was able to enjoy key DFSI partner support for other projects throughout the region. We were also able to benefit from the establishment of a WISE-PaaS competence center with the invaluable support provided by Nippon RAD.”
Mr. Liu continued, “YCM is a Taiwan-based CNC manufacturer with expert domain knowledge in their field. We provided hardware and WISE-PaaS software, and they told us what their CNC factory management team would like to see in their customers’ factories, what they care about, and what their pain points were. So we worked closely with them to create new SRP solutions specifically designed for CNC factory management, their existing CNC equipment, and the factory environment. To achieve this, we even created a brand-new company called Dot Zero that is focused on CNC and cloud service solutions. Dot Zero is a joint venture co-creation company owned by both Advantech and YCM.”
Benefits of Co-Creation
The benefits of co-creation are deep and wide-ranging for all participating partners. These include new business opportunities whereby Advantech sales teams prioritize and refer the most suitable projects directly to our co-creation partners based on their specific domain expertise. Advantages in marketing are also another key benefit. The branding expertise of Advantech can help smaller, less-experienced businesses generate more opportunities. We invite these businesses to our trade shows and solution days, and introduce them to many joint-marketing initiatives and deliverables, namely eDMs, brochures, white papers, and much more.
Finally, from a technical perspective, our WISE-PaaS platform acts as a catalyst for transitioning from a more traditional SI into a true IoT-based SI, whereby we can co-develop new SRP solutions with them.
Future Co-Creation Plans and Industry 4.0
In 2018, Advantech hosted its first hugely successful IoT Co-Creation Summit in Suzhou, China. Starting this year, Advantech has hosted Co-Creation Partner Conferences (CCPCs) around the world. Advantech aims to host a total of 60 CCPCs worldwide, which means Advantech will identify new partners, and give its global regional business units access to key strategic partners with which to co-create with.
Mr. Liu finished off by expressing his thoughts on Industry 4.0, stating, “Industry 4.0 is such a fragmented market, and this is why we need to establish an IoT ecosystem that develops domain-focused solutions that meet the demands of all types of factories and industrial markets. One of the trends we’ve noticed is data visualization and analysis, which will be an important aspect of Industry 4.0. Moreover, cloud storage and services combined with powerful AI algorithms will be a key tipping point for generating new value and maintaining a competitive advantage for factory owners. We will be focusing on partners that can provide these types of solutions and SRPs.”
With its three phases of IoT growth, Advantech has transformed from a hardware provider into an IoT service provider actively engaged in co-creating domainfocused solutions with partners from various industries. Going forward, Advantech hopes to make its IoT CCPCs prodigious events for showcasing AIoT SRPs with strategic partners, potential new partners, and industrial customers globally.