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Jun 5th, 2014
How to extract value from the IoT ? Deep dive with us into the IoT initiative from Bosch Connected...
Yole Développement interviewed Bosch Connected Devices and Solutions to learn more about it!
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Internet of Things (IoT) is at the moment the aggregation of several businesses which are quite disconnected. From industrial network of sensors to wearable electronic assistant, you can wear on your clothes while golfing, swimming, running… or sleeping. The business potential is clearly there but it will be shared between the electronic vendors, the cloud services providers, the data management companies and all the companies that will be able to provide added value services on top of that. We are moving from business like the GPS where the signal is free and the hardware is generating the business to a new area where the hardware as to be as cheap as possible in order to gather the data and sell the right services around it. So a complete change in the business models!
Yole Développement has just launched a report on the sensors and technology trends linked to the IoT applications (Technologies & Sensors for the Internet of Things: Businesses & Market Trends 2014-2024). In order to illustrate Yole Développement analysis, we have asked Bosch Connected Devices and Solutions to explain us what is the strategy of Bosch for the IoT. Enjoy it!

Yole Développement: About Bosch Connected Devices and Solutions GmbH: Can you introduce your company and why it has been created?
Bosch Connected:
We believe that with people already widely utilizing connected devices, the next logical step is that devices will communicate with each other, thereby creating additional value for people. The technological advancements being made with regards to miniaturization, energy usage, component prices as well as the fact that wireless networks are available almost everywhere will lead to new exciting products and solutions across a wide range of verticals. Everyday objects will be able to get senses by deploying or integrating our connected sensor devices. The information generated will then be made available for further use in the cloud.

YD: What are the key factor success of your company in this domain?
Bosch is a pioneer in the world of micro electromechanical systems (MEMS). Since the mid 90s, Bosch has developed sensors for Airbags and the Electronic Stability Program (ESP) applications. Bosch founded Bosch Sensortec back in 2005 to address the consumer electronic market. Currently approximately every second smart phone has Bosch Sensortec sensors inside. As a consequent next step, we will embed these sensor modules into everyday’s objects. Bosch has manufactured more than a billion MEMS sensors last year. The additional potential we see for new connected objects is even much bigger.

YD: Are you trying to manage IoT’s chain (hardware, cloud, data) with a transversal action?
Bosch has a broad spectrum of business units and competencies, so that we as a group can cover the complete value chain. Our business divisions offer connectivity based applications. Connected devices from Bosch Connected Devices and Solutions will be an important enabler for their businesses. With Bosch Software Innovations we also have a cloud architecture solution (Business Rules Management, Business Process Management and M2M server interface) available in house.

Bosch Connected Devices and Solutions delivers small, multifunctional, application optimized sensor devices with the optimum communication interface to integrate seamlessly into our customers existing IT landscape. And when our customers do not already have their own system solution, we also offer a complete solution to them. That’s why our company name is Devices and Solutions.

YD: How will you manage the interaction between hardware, cloud and data processing?
Today even within a particular applications field, there is often a variety of communication technologies and protocols already existing in parallel. Standards still have not been adopted and we believe that this is not going to change any time soon. Therefore we offer a wide range of communication technologies and protocols to our clients. To ensure that the resulting information is transmitted as efficient as possible, we embed local intelligence into our sensors devices. Our smart algorithms extract use-case specific events, which are then forwarded to the cloud environment for further processing.

We also work together with partners to develop open standards. An example here is our initiative together with ABB, Cisco and LG to develop a common platform for smart home applications. Especially in residential homes as well as commercial buildings, the current plurality of interfaces and protocols results in a high hurdle for the fast and widespread adoption of smart home / smart building technologies.  So the main opportunity of this joint initiative is to create an open communication platform to seamlessly integrate products from different brands.

YD: What is your business model for IoT?
We enable our business customers to take advantage of our unique sensor based functions through the use of our devices and solutions. We orientate our business models according to the customer’s requirements and already installed base. We constantly seek the optimum for a long term, sustainable and successful partnership with our customers.
Our offering ranges from connected devices and subsystems to complete solutions (smart sensors, cloud software and services). The Bosch Group is already deeply involved in software and services, for example Bosch is operating a worldwide network of call centers as a business solution provider.
In summary: The Bosch Group is active in nearly all areas of the IoTS value chain, giving us a unique positioning in the IoTS space.

YD: What kind of products or services are you developing? What is the time-to-market for your products? For which applications, market? Have you lead a segmentation analysis?
Our products are small, internet ready, typically battery powered smart sensor devices, e.g. measuring acceleration, turning speed and magnetic fields in three spatial directions as well as temperature, pressure, humidity, light and sound. Utilizing optimized algorithms we can draw important conclusions out of raw sensor data.

Let me give you one example of a product already introduced to the market: Our so-called door sensor device can not only detect whether a door is open or closed, but can also sense, whether there is someone knocking at your door or whether a violent intrusion is currently ongoing. This information is transmitted securely to our customer’s cloud-based IT platform, which can either trigger a push notification to your smartphone or relay the information to the monitoring center of a professional security provider. Our activities focus on the rapidly growing markets of smart homes and transportation / logistics. Further domains, like smart manufacturing, will follow soon.

YD: Google recently acquired several actors that can play a role in IoT (Nest (hardware), Boston Dynamics (hardware), DeepMind (Data)). Google, Cisco are potential competitors, how do you think you’re going to deal with them? 
The IoTS market has just began to emerge, but at a very rapid pace. Therefore constantly new possibilities and business models emerge, which require highly accurate data in order to generate maximum value for the customer. To enable this to the fullest extent, you need a variety of players with very different skill sets. We believe we are well equipped for the fast growing IoTS market because of three main arguments: 1. Given our more than 100 years of experience in the development and high volume production of innovative products as well as our worldwide footprint, we have a significant know-how and competency advantage compared to players originating from the software space. 2. Our sister company Bosch Software Innovations offers a broad and innovative portfolio of cloud based software components. 3. As a Bosch group we are active in several key verticals for quite some time, therefore we know how to optimize systems and provide value added services.

YD: How is it structured from your point of view?
The IoTS can be viewed from various perspectives, therefore allowing different horizontal or vertical segmentations. One important aspect is the value chain. Value chains in the IoTS space are typically very complex, starting from silicon based sensors, via connected devices, network technologies, cloud based computation up to big data based value added services. On the other hand several application areas (“verticals”) with different players exist in parallel. Even with technologies being similar at a basic level, there a substantial differences within these application areas in terms of bandwidth requirements, battery lifetime as well as latency times and data representation to the end user.

YD: Since when Bosch looks at IoT? And why?
Bosch – as a long-term orientated organization – already identified the great potentials of “connected things” about a decade ago. Research on topics such as Car2Car and Car2Infrastructure are ongoing since a while. Being the worldwide market leader in MEMS sensors, these tiny devices create the solid foundation for our IoTS engagement.

YD: We identified 3 axes in IoT’s structure: Hardware, Cloud, and Data processing. Are you agree with this decomposition?
From our point of view this is nearly correct. We would add the aspects of communication technology and value added services. 

YD: Did you identify key players in IoT’s landscape?
The IoTS is currently at a turning point. Many specialists from different domains are realizing the importance of the IoTS. Many however are not setup broad enough and do not have the required technology know-how to address the market on their own. Therefore we see many business opportunities for us.

YD: Where is the value of IoT? In the hardware, cloud, data? Have you an estimation of the proportion?
From our point of view the aim is to create new services using sensor information. And these services require rules-based software platforms like the ones our software unit Bosch Software Innovations has developed. Sensor technology, software, and services – this is our “3S program” for the connectivity business.

YD: What are the key success factors in IoT? What are the main barriers, challenges of IoT?
The key success factors are: a coherent 3S strategy, fast time-to-market, high levels of data security and safety as well as a transparent communication to the customer, for which purposes and how the data will be used.

YD: Do you have a roadmap for your generations of products?
We have already launched our first products. Additional products in different domains are currently in the pipeline. You will see new products launched, e.g. in the smart home as well as in the mobility market.

YD: What kind of sensors do you think they will play a key role in IoT?
Anything that is able to sense information from a “connected thing” is important for the solution. From our perspective three combinations of sensors will play a key role in IoTS: Motion-sensing, ambient-sensing and localization. That’s how we give things new senses.

Jens Mohaupt, Global Sales and Marketing Director of Bosch Connected Things
Jens Mohaupt was born in 1968 in Überlingen, Germany. He received his Diploma in Electrical Engineering from the University of Stuttgart in 1995, is married and has three children. Jens Mohaupt joined Robert Bosch GmbH in 1995. After six years in ASIC design for MEMS sensors and other automotive applications, he moved into an internal consulting group at Bosch. Focusing on change management and innovation, he led multiple Bosch divisions in filling up the innovation pipeline. In 2005 he joined the Diagnostics business unit within the Automotive
Aftermarket. He held a variety of senior positions here, including project director for vehicle tester solutions (hardware and software), director of business development for Diagnostics Software, and global director of marketing for WEB-based Diagnostics Software and Services.
In 2013 he became one of the two founders of an internal start up serving the emerging area of wirelessly connected, smart sensors and actuators for the Internet of Things and Services. With a background in MEMS, change management and Web-based business models and solutions, Mr. Mohaupt is now responsible for marketing and sales in this fast growing business field.

Dr. Thorsten Müller, CEO and General Manager Bosch Connected Devices and Solutions
Thorsten Müller was born in Duisburg, Germany in 1977. He holds a Diploma in physics from Gerhard-Mercator-University and a PhD in solid state physics from University Duisburg-Essen. In 2013 he successfully completed the Executive Transition Program at European School of Management and Technology in Berlin.
He joined the Bosch Group in 2005. During his first assignments as project manager at Corporate Research, he worked on new types of semiconductor sensors as well as on new manufacturing processes for the size reduction of inertial sensors. In 2008 he joined the business development department of the Automotive Electronics division where he was responsible for strategic planning, mergers & acquisitions as well as the division’s venture capital activities. In 2010 he was appointed director engineering for inertial sensors in automotive applications (airbag and ESP). He was one of the co-founders of the internal start-up “Connected Things”. After successfully having managed the proof-of-concept phase, he was appointed CEO of the newly founded subsidiary Bosch Connected Devices and Solutions in December 2013.

Pictures: Courtesy of Bosch Connected Devices and Solutions

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