During Advantech’s recent World Partner conference in Taiwan a lot was said about the company’s Solutions Ready Platform (SRP) and its partnerships. As a hardware company, Advantech has been on a march towards becoming a total solutions company, building out its software business by acquisitions or strategic partnerships. Chaney Ho, president, Advantech discusses the company’s direction and its developing business model.
Q: Advantech’s Solutions Ready Platform (SRP) and discussion around the sharing economy are capturing the imagination of many organisations. Discuss further the status of your SRP and new business models that will arise from this sharing economy?
Chaney Ho (CH): The sharing economy has become very popular in recent years. It is this kind of concept that is disrupting many of the existing industries, like ecommerce. Especially in China, we are seeing an increasing number of companies leverage the sharing economy. We believe this will also happen in the industrial segment.
For instance, in the Internet of Things (IoT), software is very important. For successful deployment it has to be a seamless between the application, the middleware, and the hardware. For our SRP model we packed all the necessary hardware, from the sensors to the gateway, to the middleware and even some of the analytics applications, for the customer. This makes it easy for the customer to implement our solutions.
We make an effort to shorten the cycle time that the customer needs to spend to complete an IoT solution. That is our objective. As such we will develop one by one all the SRP models, for instance, we have an SRP for machine connection, we have an SRP for machine performance measurement, and an SRP for visualisation, and one for predictive maintenance or failure analysis. That is our strategy.
Q: You started as a hardware company. Now you want to move into a more software driven company and provide a complete solution. You are doing that by partnering third parties, such as Microsoft, IBM, etc, do you see this partnership model as the direction you want to take or are you interested in expanding through acquisitions?
CH: It is impossible for us to acquire a company like Microsoft, so it is necessary for us to establish these partnerships. Microsoft have the infrastructure as a Service (IaaS) that we build our applications upon and subsequently retail to our customers. Microsoft and IBM develop many analytics applications and APIs, which they place on their respective marketplaces. We built our own marketplace to allow Microsoft and IBM to place their APIs to sell to Advantech’s customers. When our customers buy one copy of their licence from our marketplace, they pay us and a percentage is given to our partner as well, such as IBM or Microsoft. This is our business model.
In addition to this we also look for companies that we can acquire to expanding our core offerings. These are the two approaches we use.
Q: You are moving towards a more solutions originated model. A lot of companies are doing something similar. What sets Advantech apart?
CH: I believe we have the better position. We have been in the market for 30 years. We have all the hardware. It is easier for Advantech to integrate with a sensor company, for instance. For a software company it is more difficult because you do not have the hardware. The reason companies such as IBM and Microsoft are keen to work with Advantech is because we have a very wide customer base and we have the hardware. That is something that puts us in a better position compared to other companies.
Q: In regards to security, what safeguards do you implement to protect you customers?
CH: We have both the hardware and the software so we can implement security protection on both. In our software we bundle McAfee as a security measure. We then write the APIs to connect with the security software.
Q: What is your thoughts regarding the state of standards and protocols in the IoT space?
CH: When it comes to standards and protocols we are very important. We play a leading role in this area. Perhaps more than 8 or 10 different fieldbuses are used in the industry. In our gateway we have the ability to change the protocol. Whether you are using fieldbus, profibus, etc, you can convert into Ethernet. We have this level of compatibility. That is what we offer.