Inverter-as-a-Service - off to the platform!?
Episode 13
Definition work: From platforms and ecosystem ...
Are platforms in the industry sales tools or innovation hubs? What makes a ‘good’ platform? What problems can be solved on platforms? Who should be a partner in the ecosystem? Andreas Schmidt from Danfoss Drives and Prof. Dr. Heiko Gebauer from the Fraunhofer Center for International Management and Knowledge Economy (IMW) have been working on ecosystems and the platform economy for several years. It’s not enough to simply put products on the web. Behind the platform idea lies a major change process within the company. Find out how to do this, how to make money on industrial platforms, and why even the really big companies still have challenges in Drehmoment – Der Antriebspodcast | Episode 13. Is the inverter-as-a-service coming?
Inverter-as-a-Service?
Ten years from now, Danfoss will still be selling frequency converters. In the future, this will be supplemented by services, applications and new sales models on platforms as a central element of industrial ecosystems. Andreas Schmidt and Prof. Dr. Heiko Gebauer explain how this can work.
European Football Championship: The ball was supposed to start rolling in 2020. But the pandemic threw a spanner in the works for the fans and the organizers of the EURO 2020. Not only were fans grieving at the time, but beverage bottlers were worried, too. Some invested money in new machinery and equipment in the previous year – including inverter technology from Danfoss Drives. The plants then produced less than expected. The entrepreneur wrote off the machines and was left with costs. "For him, pay-by-use would have been brilliant in this case," says Andreas Schmidt of Danfoss. Among other things, he looks after new business models at Danfoss Drives in the Central Europe region. "This doesn’t have to be a disadvantage for Danfoss either. Sales are shifted over the life cycle of the inverter and we can offer services at the same time," adds Schmidt. Inverter-as-a-Service? "Why not?" asks the Danfoss manager.
B2B platform world: customer centricity is often still missing
Prof. Dr. Heiko Gebauer from the Fraunhofer IMW has been working on new business models, platforms and ecosystems in industry for several years. For him, it’s clear: "Without an ecosystem, a platform won’t work." Too often, companies equate platforms with marketplaces, he said. But a platform is much more than that; it should also be an innovation hub where new business models are developed with customers and partners. "We have to keep solving the customer problem on the platform as well." Too often, he says, platforms have been developed around the company setting the tone. "A logo in the middle and a few helpers around it and the platform is already in place. But that’s not how it works. We also have to allow competitors, we have to answer the customer’s questions," Gebauer warns.
Niche platforms
‘Coopetition’ is the new magic word. Schmidt takes a similar view. "Sure, everyone wants to be the tone-setting company, but if we exclude competitors, then our platform is not attractive enough for customers to use. The customer decides where to engage." And that, Gebauer and Schmidt agree, doesn’t just happen on one platform. "There was an effort in the industry to cover everything, but many vendors have learned," the researcher explains. He is certain: small companies also visit the platforms. "They may be much more agile. There, the owner decides personally whether he wants to participate or not. I wouldn’t underestimate the midmarket."
Change in corporate culture as the basis
Danfoss man Schmidt confirms, "Customers are asking and the first platforms are emerging." The company faces new challenges: "But we don’t just sell our inverters on these platforms. We have to think about what it means that the technical possibilities make it possible to separate hardware and software. The inverter will still exist in ten years, but the individualization of the software is becoming more important. Maybe in the future we will still supply frequency converters with basic software and application libraries, but for more applications a platform is developing where customers can exchange ideas with developers and do business." And Danfoss earns from the transaction? "That could be a source of revenue. Services, subscription models or licenses are also part of it. Developing an idea and making money is not that difficult. The challenge is to run three to four sales models at the same time," explains Prof. Gebauer.
Changes in sales
Sales departments are faced with new tasks that require new competencies. "At the same time, we have to be careful not to split the company. We still need the colleagues who can do classic product sales," warns Schmidt. Heiko Gebauer and Andreas Schmidt explain in a podcast conversation which platforms are trend-setting, when the platform idea will prevail and how Danfoss Drives wants to attract developers with open interfaces.
