According to UN, 68% of the population is expected to live in urban areas by 2050 (UN, 2018). As the world continues to urbanize, sustainable development will increasingly depend on the successful management of this growth. The need to manage the housing, transportation, energy, water, basic infrastructure and necessities like education, healthcare etc will be imperative. Under this setting, in this blog I will talk about smart cities and how Siemens, a traditionally pipeline company, is using IoT and smart cities to move to a platform based business model.
“A smart city is framework, predominantly composed of Information and Communication Technologies (ICT), to develop, deploy and promote sustainable development practices to address growing urbanization challenges” (Thales Group, n.d.). Disrupt yourself or be disrupted, Siemens has accepted this truth and is all set to disrupt themselves as they move from a infrastructure pipeline company to industrial IoT as service solution provider through MindSphere. “Using advanced analytics and AI, MindSphere powers IoT solutions from the edge to the cloud with data from connected products, plants and systems to optimize operations, create better quality products and deploy new business models. Built on the Mendix application platform, MindSphere empowers customers, partners and the Siemens organization to quickly build and integrate personalized IoT applications” (Siemens, n.d.). MindSphere provides a platform to the developers, operators and app sellers to use the data base created from the inputs of the sensors from hardware and system integration partners. As a user, they configure assets, ingest data and use MindSphere applications to unleash the potential of their own IoT data. As a developer, they build and test their own MindSphere applications. As an operator, they monetize and operate applications.
Eight billion devices were connected to the internet by 2016 and 1 trillion are expected to be by 2030 (World Economic Forum, 2016). If so many devices are connected and generating data then what is stopping smart cities from exploding and becoming the new normal? In most cases data is already available in contextualized form, but is not leveraged to its maximum potential benefits (Siemens PLM Software, 2017). In an interview, CEO of Siemens said that the most limiting factor in the adoption of IoT is not enough apps exist, so to propel and help developers Siemens acquired Mendix (Hemmelgarn, 2019). Mendix is a low code software platform that provides tools to build, test, deploy and iterate applications. They have also incorporated AWS and Microsoft Azuri cloud infrastructure. Thus augmenting the architecture and the rules of the platform to attract developers and simulate the network effect.
What about the envelopment of MindSphere? Is there anything stopping Google, Microsoft or Apple from engulfing MindSphere? Here FSAs play an important role since the companies already using Siemens hardware have higher familiarity to integrating with this platform than otherwise. On the other hand, several location-bound FSAs remain important, for smart city technologies in particular, pre-existing collaborations, partnerships, or contractual arrangements between MNEs and city governments within a specific urban environment are important (van den Buuse & Kolk, 2018).
The more the information available on the platform the better performance can be expected from the platform. In conclusion, I would like to say that Siemens has taken a step in the right direction since digitalization and IoT is inevitable if the company wants to survive the Industry 4.0. However, there are still some challenges lurking for MindSphere and the company needs to be mindful of the same and be ready to adapt on a continuous basis.
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References:
Thales Group, n.d. Secure, Sustainable Smart Cities and the IoT. [Online]
Available at: https://www.thalesgroup.com/en/markets/digital-identity-and-security/iot/inspired/smart-cities
[Accessed 28 09 2020].
UN, 2018. United Nations. [Online]
Available at: https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html
[Accessed 28 09 2020].
Siemens, n.d. MindSphere. [Online]
Available at: https://siemens.mindsphere.io/en
[Accessed 28 09 2020].
Siemens PLM Software, 2017. MindShpere – The Could Based, Open IoT operating system for digital transformation. [Online]
Available at: https://iiot-world.com/wp-content/uploads/2017/03/Siemens_MindSphere_Whitepaper.pdf
[Accessed 28 09 2020].
Hemmelgarn, T., 2019. Show Me the Money: Siemens Software CEO Opts for Substance Over Flash [Interview] (30 10 2019).
van den Buuse, D. & Kolk, A., 2018. An exploration of Smart city approaches by international ICT firms. Technological Forecasting & Social Change, 142(May 2019).
World Economic Forum, 2016. World Economic Forum White Paper Digital Transformation of Industries: In collaboration with Accenture, s.l.: World Economic Forum.
