Winning strategies for IIoT start-ups
Discover winning strategies for IIoT startups.
Start-ups clamoring to the Industrial Internet of Things (IIoT) space are finding it a challenge to differentiate themselves in a market with hundreds of competitors entering the market every year.
There’s good reason start-ups are flocking to IIoT; it is transformational across industries and enables new business models. IIoT reduces errors and downtime, supercharges efficiency, stops people from getting hurt at work. It saves money, reduces waste, lowers manufacturers’ carbon footprints.
And it’s expected to grow – to $28 billion in 2026, a 33% compound annual growth rate (2020 to 2026). The growth is fueled by the rapid adoption of cloud based IoT platforms and the increasing number of customers choosing to buy (not make) IoT platforms.
Catalysts for innovation, growth
By 2025, there will be over 50 billion IIoT connected devices, according to McKinsey. IIoT start-ups know this and are ideating and creating innovative new technology to serve the industry. Some of you are emerging as catalysts for radical innovation and are key drivers of economic growth and job creation.
Start-ups like yours are grabbing hold of some of the biggest emerging trends in IIoT: Hyper automation, service-led business models, predictive and preventive maintenance, data quality and contextualization, or edge processing.
Your companies are transforming factory floors, supply chains, offices, and hospitals around the world. You are providing cybersecurity at the corporate, factory and sensor level. You are designing systems that connect autonomous vehicles and optimize fleets and traffic.
Your customers – today’s industrial enterprises – realize that they must make the jump across the river from one bank—where their business is today—to the other bank—a digitally transformed business. There are all kinds and obstacles so, to do this, they need supportive partners to help. They know that sustained innovation and disruptive thinking come from outside – and it could be your IIoT start-up that provides this.
So, as an IIoT start-up, how can you shine?
What will it take for these enterprises to choose your start-up as that partner? How do you attract their attention? High competition makes it difficult to differentiate yourself from others. So, it’s imperative to stand out and create your edge.
Here are two things I believe are essential to help you win in this space:
Set a stake to SCALE
In the past two years alone, of the 620 IoT platform companies IoT Analytics Research identified in 2019, 188 IoT platform companies have discontinued operations. Why? Because scaling a business is a challenging task. Set your stake to scale, tell people what you solve and how you solve it, ensuring you consider your customers’ and partner ecosystem. In other words, don’t fall into the build trap, leverage proven technology where possible, while staying open and extensible.
Getting customers on board is a battle for any business, especially IIoT start-ups. If you cannot scale with your current customers, getting new customers is TOUGH. Therefore, you need to do something revolutionary to make a mark on your customers and boost customer experience. You may be able to solve just one problem for them, but you must be nimble enough to support rapid, sustainable growth – be specific with your business case.
Be close to your customers; focus on creating relationships with existing clients and treating them well. Think of every situation as winning their business back repeatedly. They need a true partner to collaborate and co-innovate, so help them sort out and solve their specific problems.
Offer them a unique VALUE
Today, enterprises in many industries need to innovate through software. New digital business models are written in software and data is the basis. They are looking for the possibility to deploy, integrate, analyze and audit data to gain value and automate their business processes, with greater ease and much lower costs.
Traditional companies do not have the workforce to develop and maintain high-end technology products – the goal is to stay competitive. Industrial age companies are trying to build their digital departments, determine their IIoT strategies. However, this is expensive and time-consuming. Therefore, acquisitions make sense – choosing not to do it alone and bringing in the right expertise as well as mindset.
Acquiring a partner allows you both to innovate together and scale your solutions. The other factor of partnerships, especially for big businesses, is acquisitions.
The best way I can show you how larger enterprises, especially a technology company, chooses acquisition targets, is to tell you why we decided to buy Cumulocity in 2017 and TrendMiner in 2018.
Cumulocity’s technology laid the foundation for our IoT software services portfolio. While streaming analytics is key for real-time analysis in IoT, customers first need connected devices to obtain the sensor data. With Cumulocity, we acquired a cloud-first, scalable platform that enables our customers to connect and manage their devices across different networks and protocols. In combination with streaming analytics and hybrid integration, we formed an even more powerful IoT software platform offering, making IIoT easy and fast.
TrendMiner focuses on democratizing industrial analytics. It empowers domain experts to leverage the data generated by devices, industrial assets and processes for fact-based decision making. Further synergies with the wider Software AG portfolio include the use of webMethods to integrate contextual data and augmenting Cumulocity IoT with a search for patterns and anomalies over stored time-series data.
Each company convinced Software AG that it would accelerate our success, bringing the best mutual benefits for us and for customers. The benefits went far beyond the product area and included the growth of our customer base and relationships, domain expertise, innovative approaches to customer success, while growing a highly talented, diverse team.
Today, our partnerships are bearing fruit:
IoT projects using our technology deliver an ROI of 339% over a 3-year duration for our customers
Our technology is highly recognized in the market – we are a leader in “The Forrester Wave for Industrial IoT Software Platforms, Q3 2021” and “The Gartner Magic Quadrant for Industrial IoT Software Platforms, Q4 2021”
Our customer success and a personal approach are appreciated. The CEO of Lanxess once told us: “My teams love TrendMiner.”
This is helping us:
Grow our business
Gain market share and reach
Improve reputation and credibility
IIoT start-ups and scaleups are the driving force for digital transformation and economic growth.
Go get ‘em. It’s the right time.