Advantech At the Cutting-edge of Industrial Computing
Advantech has undergone a significant transformation over the past four decades, evolving from a hardware manufacturer to a provider of a complete range of edge-to-cloud products, including IoT sensing devices, industrial communication devices, edge computing platforms, application software, and cloud platforms. Indeed, Advantech has grown into a global leader in the IoT industry, with a presence in over 100 countries around the world. In an exclusive interview Vincent Chang – Vice President, Advantech Co. Ltd. lets us have a ringside view of the company’s capabilities, commitments, offerings and its growth strategies to touch the next milestone of its Golden Jubilee replete with accomplishements in a plethora of areas which will personify its predominance in industrial computing. Excerpts:
Q. As a global leader in the industrial computer industry, what do you see as the potential for Advantech in the Indian market?
As the Managing Director of Advantech Asia and Intercontinental Region and General Manager of Advantech India, I can say that Advantech has a strong presence in the Indian market, having invested here for over 30 years. We recognize India, as one of the most important and emerging markets for both Asia and Europe. Our business model is to localize our approach in every market, and we have continued to invest in our India branch.
We believe that there is great potential in the India IoT and Industry 4.0 market, especially in the areas of smart manufacturing, renewable energy, and oil & gas. To this end, we plan to invest in R&D to develop innovative solutions in these areas and expand our business to new regions, supporting our partners in achieving greater success. We see our role as not just providing products and services, but also partnering with our customers to provide comprehensive solutions that meet their specific needs.
Our business model is to localize our approach in every market, and we plan to leverage the advantage of our talented and high-quality Indian employees to support our partners in achieving greater success. Our team’s talent, intelligence, and smart work ethos are some of our greatest assets. Specifically, our India team has a deep understanding of the local market and can provide tailored services and support to our partners in the region.
We are excited to work with local partners to bring our cloud-based software solutions and market-oriented ready-to-use software applications to the India market. These solutions have been successful in Taiwan, China, ASEAN and we believe that they can help Indian companies make sense of the vast amounts of data generated by their devices and sensors. Additionally, we establish a local service center in India to develop new solutions and technologies that meet the unique needs of the market.
Our goal is to empower our customers to implement IIoT technology quickly and effectively, providing a flexible and scalable infrastructure that allows customers to connect their devices and sensors to the cloud. Overall, we believe that Advantech has a bright future in the Indian market, and we are committed to continuing our investment and expansion efforts in the region. We are excited about the opportunities that lie ahead and look forward to working with our partners to drive business success in India.
Q. Why did you decide to invest in cloud-based software solutions and market-oriented ready to use software applications?
Advantech, as a leader in the industrial computer industry, recognized the growing need for cloud-based software solutions and sector-specific applications that could provide our customers with comprehensive solutions tailored to their specific needs.
Market trends and reports indicate that edge computing represents enormous potential value, estimated to reach between $175 billion and $215 billion in edge computing hardware by 2025. The major focus industries for edge computing include transportation, artificial intelligence, retail, healthcare, the public sector and utilities, and global energy and materials. These sectors align with Advantech’s strategic focus on high-potential growth markets for the coming years.
According to a report from Gartner, the market size of edge computing, encompassing hardware, software, and services, is expected to grow to $500 billion by 2025. The ratio of hardware to platform and security software is 1:5, and the demand for application and consulting services, as well as implementation and managed services, is 10 times that of hardware. This rapid growth in demand for cloud-based software solutions and applications presents a significant opportunity for companies like Advantech to offer comprehensive solutions to their customers.
Furthermore, it is expected that 60% of technical service partners will develop partner ecosystems, up from approximately 25% today. To shorten development cycles and expedite go-to-market strategies, low-code and no-code tools will become widely used, with more than 20% of new edge applications being developed using these tools.
In the light of this information, our decision to invest in cloud-based software solutions, referred to as Phase II business, stemmed from the understanding that our customers need more than just hardware solutions. They require software solutions to help them manage and analyze the vast amounts of data generated by their devices and sensors. By offering cloud-based software solutions and domain-focused, low-code and no-code tools, we can provide our customers with comprehensive solutions that meet their specific needs.
We have been offering these solutions for over a decade and have been continuously developing and improving them to address the evolving needs of our customers. These solutions have been very successful in Taiwan, China, and other Asian countries, and we are excited to bring these success cases to the Indian market while collaborating with local partners.
Q. You always emphasize on co-creation methodology in your business model. Why is it so important?
Co-creation has become increasingly important in the ever-evolving IIoT market. With the understanding that software and hardware solutions cannot be developed independently, co-creation enables both aspects to complement each other and remain fully compatible. In fact, it is anticipated that 60% of technical service partners will develop partner ecosystems, a significant increase from the current 25%.
Emphasizing on co-creation in our business model at Advantech allows us to work closely with customers and partners, understanding their specific needs, and developing customized solutions tailored to their requirements. By involving customers and partners in the product development process, we can gain a deeper understanding of their needs and pain points, leading to innovative and customized solutions that are more efficient and cost-effective. Ultimately, this drives business success for our customers.
Building an IIoT ecosystem based on co-creation also helps establish stronger relationships with customers and partners, increasing loyalty and trust in a highly competitive market.
A significant portion of AIoT value contribution comes from domain solutions, which requires close collaboration with external partners, especially Domain-Focused Solution Integrators (DFSI). These partners possess the domain knowledge and expertise necessary to support and service domain customers. Our focus is on specific domain areas in Industrial IoT and Service IoT, including sectors such as iFactory (Industry 4.0), Machine to Intelligence, Energy and Environment, Intelligent Retail, Public Services, iHospital, iEMS (Intelligent Energy Management System), and iLogistics.
Co-creation is essential in the IIoT market, as it allows us to differentiate ourselves by offering tailored solutions that meet our customers’ specific needs. This approach ultimately helps us achieve our goals of continued innovation, global expansion, and becoming an intelligent enabler of a sustainable planet.
Q. With investments such as 5G, Industry 4.0 and Artificial Intelligence, technology is developing at a great pace. Where is Advantech in this technology evolution?
As technology continues to advance rapidly with developments in 5G, Industry 4.0, and Artificial Intelligence, Advantech remains committed to staying at the forefront of this evolving landscape. Recognizing the transformative potential of AI in various industries, we are dedicated to developing tailored solutions for different vertical markets.
Over the next ten years, we envision Advantech as a key player in the IoT market, driving innovation and growth. Our mission is to remain at the cutting edge of 5G, Industry 4.0, and AI development, providing state-of-the-art solutions that enable our customers to excel in their industries. Our extensive experience in creating solutions for diverse sectors will be our most significant advantage during this period.
Our roadmap and AIoT business model are designed to support Advantech’s continuous, sustainable growth in the coming decade through a three-phase approach:
Phase I – Edge Computing & IO Device: This phase includes our traditional product and business units, which encompass edge computing, iEM Design-in, device & IO service, industrial server, Cloud IoT, AI, and video platform.
Phase II – WISE-PaaS Platform & Marketplace: This phase involves the integration of hardware and software, providing services such as WISE STACK edge cloud, AI framework service, insight APM, WISE DeviceOn, and WISE-Edge Plus.
Phase III – Domain Solutions: In this phase, we will collaborate closely with external partners, particularly Domain-Focused Solution Integrators (DFSI), to create tailored solutions for various industries.
Ultimately, our goal is to establish a strong presence in the AIoT market, powered by edge computing and edge AI technology.
Q. What makes you different from other brands in the cloud-based software solutions and hardware bundled software solution packages that you offer?
Advantech stands out from other brands due to our deep understanding of the industry and our customers’ needs. Our solutions are scalable, flexible, and user-friendly, enabling our customers to quickly benefit from IIoT technology. We differentiate ourselves by providing complete edge-to-cloud solutions that include both hardware and software, ensuring seamless integration and functionality to meet our customers’ unique needs.
A key differentiator for Advantech is our WISE-Edge365 solution, a cloud-based platform that provides a comprehensive suite of tools and services for IoT application development, deployment, and management. Recognizing that not everyone has the technical expertise to develop custom solutions, we offer low-code and no-code solutions, making it easier for our customers to develop custom applications without requiring extensive programming knowledge. Our customers can quickly develop and deploy custom IoT applications, leveraging a range of pre-built modules and templates with WISE-Edge365.
Advantech’s WISE-Core Service Architecture is a purely no-code/low-code platform that seamlessly connects with our full range of edge intelligent devices, including sensing devices, gateways, embedded boards, edge computing, IPCs, high computing servers, and domain-focused products such as intelligent service and logistics, and medical computing platforms. This architecture enables customers to easily develop and deploy their industrial applications with limited resource investment.
Our iFactory and iEMS (Intelligent Environmental Monitoring System) solutions are excellent examples of how we leverage low-code and no-code technology to provide cost-effective and efficient solutions for our customers.
Q. You are celebrating your 40th anniversary. Could you tell us shortly what has changed in Advantech after 40 years? What are the goals of the company for the coming years?
Advantech has undergone a significant transformation over the past four decades, evolving from a hardware manufacturer to a provider of a complete range of edge-to-cloud products, including IoT sensing devices, industrial communication devices, edge computing platforms, application software, and cloud platforms. As a result, Advantech has grown into a global leader in the IoT industry, with a presence in over 100 countries around the world. Our future goals are focused on continued innovation, expanding our global presence, and strengthening our partnerships with industry players.
In the coming years, we plan to build an IOT Eco-system & Alliance by Targeted Domains. This will involve enhancing our services and business approach in new regions, such as India, where we see great potential for growth in the smart manufacturing, new energy, and oil & gas markets. We will foster a strong local management team and encourage leadership growth and development among our partners, nurturing a culture of innovation and collaboration to drive business success.
Q. What has changed and will change in business models with the IoT and IIOT era? We are also curious about your prediction.
The IoT and IIoT era have brought significant changes to business models across industries and will continue to do so in the future. These changes include a shift towards more service-oriented models, increased collaboration between companies, and data-driven decision-making. Here are some predictions on how the IoT and IIoT era will continue to impact business models:
Traditional product-based models are giving way to service-oriented models that focus on providing ongoing value to customers. Companies need to offer continuous support and maintenance for IoT devices and systems, which has led to this shift.
As IoT technology becomes more prevalent, companies will increasingly collaborate and form partnerships to develop innovative solutions and address the complex challenges associated with IoT and IIoT implementations.
The massive amount of data generated by IoT and IIoT devices will lead to a greater emphasis on data-driven decision-making. Businesses will leverage analytics and machine learning to optimize operations, improve efficiency, and gain a competitive edge.
With the rise of IoT services and the need for ongoing support, businesses may adopt subscription-based models to generate recurring revenue while providing customers with access to the latest technologies and updates.
As IoT and IIoT devices become more common, concerns about security and privacy will grow. Businesses will need to invest in robust security measures to protect their customers’ data and maintain trust.
The increasing number of connected devices and the need for real-time data processing will drive the growth of edge computing. This trend will lead businesses to invest in edge computing infrastructure and develop new solutions that leverage its capabilities.
The IoT and IIoT era will continue to bring about significant changes in business models across various industries. Companies will need to adapt to these changes by embracing service-oriented models, increasing collaboration, leveraging data-driven decision-making, and focusing on customization, security, and edge computing. By staying ahead of these trends and adapting their business models accordingly, companies can capitalize on the opportunities offered by the IoT and IIoT era and achieve long-term success.