Siemens vs GE Business Growth Strategy | Implementing Digital Transformation Strategy & IIoT

In this video, I discuss the digital transformation effort of GE & Siemens. Each had a unique business strategy for IIoT, machine learning, & a.i.; which can be boiled down to a platform vs a product strategy.
Siemens and GE both have consumer product lines, such as appliances, as well as B2B and Industrial offerings, like jet engines and Information Technology (IT) solutions for businesses. Both of these companies were experiencing slow or no growth, and therefore needed to seek out new opportunities for new growth.
For GE, they saw the future in Industrial Internet of Things, or IIoT. And if you’re not aware, IoT, is simply connecting various objects to the internet to either increase capabilities or somehow provide added value. GE, who provided industrial equipment to companies, IIoT meant enabling their products to be able to capture and share real-time data , which in turn would be ran through data analytics software to help improve efficiency and overall optimize activities surrounding that piece of equipment. All the data is also processed with machine learning and artificial intelligence, therefore constantly improving overall efficiency.
Like GE, Siemens was looking for new growth. Their Vision 2020 strategy was ultimately a digitalization initiative. Digitalization was seen as the future. Roland Busch, the Chief Strategy Officer at the time, anticipated the “2nd IT Revolution” and pushed for change within in Siemens so that they could capitalize on this new growth. They wanted to move from horizontal IT to vertical IT, which focused on software that helped companies run their core processes.
Let talk about how each company pursued Industrial Internet of things. As mentioned earlier, Siemens was looking to help businesses with their core processes through software. To properly develop a software solution for a company in this manner, they needed to have a great deal of domain-specific expertise in each vertical. So basically Siemens was pursuing highly tailored solutions to companies for their specific use case.
This is in contrast to GE, who was approaching their IIoT offering from primarily a platform strategy. Meaning their offering was the actual platform, which the purchasing company or outside developers could create their own unique solutions on. Obviously, there can be many benefits to this platform and open source strategy. You can focus all of your resources on perfecting that single offering. You have the benefit of outside resources, such as other people’s time, and money. As well as access to talent outside of your organization.As mentioned in the case, the new goal was to transform GE into an analytics-focused company that leveraged IIoT. And that is exactly what they did. They had their developers create a data-analytics product. GE management knew that focusing their IoT efforts on solutions only applicable to their own products was a defensive strategy. They needed to develop a product that helped their customers on all machines. GE also realized that the value of IIoT was not just in specific apps, but in creating an ecosystem. As mentioned in the case, “GE built the world’s first industrial-strength platform too enable developers to create apps that will deliver more value and superior outcomes for GE and their customers. The platform, Predix, “Would enable the company to become the orchestrator of an ecosystem of apps not only built by GE, but with open source, for other developers and equipment manufacturers”.
As of Today, there are little more similarities between the two companies. One core product of Siemens is their PaaS offering, MindSphere, which seems similar to GE’s Predix in that it is an IoT platform on which a company or third party can develop apps specific to their needs. Siemens also is driving significant revenues through their digital factories offering, where they create a “digital twin” of a product, process, or plant and test various activities and those activities’ implications within the digital world.
it was hard to determine what revenues were related primarily to each companies digitization efforts. From what I can tell GE’s revenue from GE Digital was $4billion in 2018. And Siemens Digital Industries segment had revenues of (15.3 billion euros) in 2019. So while both the companies pursued Industrial Internet of Things, machine learning, and artificial intelligence, they both did it in their own.
I will make sure to do a completely separate video on this idea of platform strategy vs product strategy. It can be seen in many different areas. One example being Apple & Microsoft.
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Hope you enjoyed this video talking about digital transformation strategy & industrial iot . Thanks for watching!.

Видео Siemens vs GE Business Growth Strategy | Implementing Digital Transformation Strategy & IIoT канала JP Sauceda - Business, Startups, & Side Hustles