Microsoft and BMW pair up for IoT Open Manufacturing Platform

Microsoft has partnered up with the BMW Group to launch a new initiative aimed at stimulating growth for IoT in the smart factory segment.

The Open Manufacturing Platform (OMP) will be built on the Microsoft Azure cloud platform, aiming to have four to six partners by the end of the year, to help grow an ecosystem and build future Industry 4.0 solutions. The smart factory segment is promising much with the emergence of 5G, but with every new concept there is scepticism; someone always needs to drag it towards the finish line.

“Microsoft is joining forces with the BMW Group to transform digital production efficiency across the industry,” said Scott Guthrie, EVP of the Microsoft Cloud and AI Group. “Our commitment to building an open community will create new opportunities for collaboration across the entire manufacturing value chain.”

“We have been relying on the cloud since 2016 and are consistently developing new approaches,” said Oliver Zipse, a board member at BMW. “With the Open Manufacturing Platform as the next step, we want to make our solutions available to other companies and jointly leverage potential in order to secure our strong position in the market in the long term.”

BMW is already a significant customer of Microsoft Azure, with over 3,000 machines, robots and autonomous transport systems connected with through the BMW Group IoT platform, which is built on Microsoft Azure cloud.

Openness is one of the key messages here as the pair bemoan data silos and slow productivity created by complex, proprietary systems. The OMP aims to break down these barriers through the creation of an open technology framework and cross-industry community.

For both, the objective of this group is relatively simple. At BMW, the team wants to improve operational efficiencies and reduce costs, partly by taking back control of the supply chain, while Microsoft just wants more people, processes and data on Azure. The more accessible the smart factory is, more companies will become cloud-first, and the more successful the OMP becomes, the more customers Azure gains.

The OMP will provide community members with a reference architecture with open source components based on open industrial standards and an open data model. Through openness, the pair claim data models will be standardised to enable more data analytics and machine learning scenarios and usecases. For Microsoft and the manufacturers, its great news, for the suppliers not so much.

Openness sounds like a great idea, but with any fundamental change comes consequence. There will be numerous companies who benefit considerably from proprietary technologies and processes, especially in traditional industries like manufacturing, though those who resist change will be the losers in the long-run. The world is evolving to a new dynamic, where openness rules the roost, resistance only means future redundancy.

Intel VC arm plugs its disruptive vision

Intel has seemingly learned a lesson from the woes of stumbling giants, announcing it has invested $117 million in ‘disruptive’ start-ups at its annual VC conference.

There is a very good reason investors are so keen to pump cash into the likes of Google and Amazon, despite recent criticism and the threat of regulatory reform; these are companies which never sit still. The likes of Jeff Bezos and Sundar Pichai are constantly pushing the boundaries, expanding the business into new segments. It should be viewed as a lesson for every CEO around the world.

However, this is seemingly a lesson which has only recently been added to the management curriculum. In generations gone, some of the worlds’ leading technology companies have climbed further than any other before, and then stopped exploring. IBM, Oracle and Microsoft are three examples of companies which sat still for years, and the industry moved on without them. They have since recovered, but it took a lot to bridge the chasm.

“Intel Capital is continuing that legacy of disruption with these investments,” said Wendell Brooks, President of the VC arm, Intel Capital.

“These companies are shifting the way we think about artificial intelligence, communications, manufacturing and health care – areas that will become increasingly essential in coming years as the linchpins of a smarter, more connected society.”

One of the oldest phrases in the technology industry is often forgotten, but it seems Intel is attempting to resurrect it; disrupt or be disrupted.

Google and Amazon are the perfect embodiment of this statement. If you look at the acquisitions made over the years, they are incredibly intelligent bets. Google bought YouTube, Android and DeepMind for huge sums at the time, but now they look like bargains. Amazon didn’t make a profit for years, instead re-investing and now has AWS as a profit machine. These companies could have collected profits, paid more dividends and rewarded management with more bonus’, but look at what the end result is.

As it stands, Intel is in a relatively healthy position. Looking at the financials for 2018, revenue was $17.1 billion for the fourth quarter and $62.8 billion for the 12 months. These figures are 8% and 9% up year-on-year respectively, with data-centric revenue up 21% compared to Q4 in 2016. Share price declined on the news, investors were concerned over a conservative forecast, but the warning shot has seemingly been heeded.

If growth is not satisfying investors, something needs to change. The status quo is unlikely to reap more rewards tomorrow than today, therefore investment is required. Some of this will be directed inwards, though through the investments in Intel Capital the firm is welcoming disruption; it wants to be in on the ground floor of these potential booming enterprises.

“Our continued goal is to leverage the global resources and expertise of the world’s greatest engineering company, and its ecosystem of customers and partners, to help these founders accelerate growth and innovation,” said Brooks.

Looking at the investments, AI features heavily. Cloudpick is a smart retail technology provider with proprietary computer vision, deep learning, sensor fusion and edge computing technologies to enable cashier-free stores. SambaNova Systems is building an advanced systems platform to run AI applications. Zhuhai EEasy Technology is an AI system-on-chip (SoC) design house and total solution provider.

The team is also investing in the edge computing hype with Pixeom, mobile content streaming with Polystream, digital healthcare with Medical Informatics and Reveal Biosciences and also smart manufacturing.

The lessons of sitting still are incredibly obvious. Oracle founder CEO Larry Ellison dismissed the cloud and look where that has landed the firm. IBM refused to respond to the evolving PC market and it resulted in a colossal overhaul. Microsoft was another which ignored market trends, with former CEO Steve Balmer making some very off-target predictions in 2006. All of these companies have learned a lesson on disruption, but it came at a cost which took years to fix.

With its VC arm, Intel is promising to invest $300 to $500 million a year in disruptive technologies. It is taking a page out of the Amazon and Google playbook; if you want to remain on top, you can never sit still.