The possibilities raised by applying digitalization to manufacturing has created a name: Industry 4.0. In Europe, perhaps nobody is leading the charge into this fourth industrial revolution faster or more cohesively than Germany. The nation now is well-placed to overcome early obstacles with the arrival of German-built clouds, slated to meet the needs of the nation's Industry 4.0 participants.
Before the arrival of local cloud, some businesses had no clear plan or timeline for implementing a digital strategy, according to a March 2016 McKinsey report. Indeed, 60% of those surveyed said they had hit obstacles to executing digital strategies (See: Industrie 4.0: Rebooting Germany).
One fundamental problem? Finding a way to integrate data entering their solutions -- something essential to extract a comprehensive picture of the manufacturing process while maximizing efficiency without compromising data security or ownership when it passes into third-party technology. German companies also must comply with the nation's stringent data privacy regulations and a distrust of data centers located outside the country, heightened after Edward Snowden's revelations.
Getting the right cloud solves those problems. Perhaps that is why not just one but two companies announced rollouts of German-based clouds this year. Both promise to make it possible to achieve what McKinsey calls "the complete integration of data along the product lifecycle." In November 2015, Microsoft disclosed plans to set up data centers in Germany; privately owned manufacturer Bosch already launched its own.
Bosch CEO Volkmar Denner unveiled the Bosch IoT Cloud in March at Bosch ConnectedWorld. Showing awareness of his target market's concerns, Denner pointed out a "strong focus on privacy and security" as one of its qualities. The Bosch IoT Cloud capitalizes on the engineering company's experience in the industrial space and promises to deliver the advantage of predictive maintenance.
In fact, predictive maintenance is one of Industry 4.0's greatest boons to productivity, according to the McKinsey report. "[Progress] in data availability, machine learning technology and cloud technology is enabling an entirely new approach [to predictive maintenance, one] that integrates diverse data sets and uses complex deep learning algorithms." As a result of such systems, maintenance expenses can drop dramatically, the research and consulting firm estimates.
Bosch will not be the only native German cloud for long if Microsoft meets its own timeline. When it announced its partnership with Deutsche Telekom to offer cloud services from German locations, Microsoft aimed for a rollout this year, as well. The partnership is key to making inroads in the country, since 83% of German enterprises expect a national cloud provider, according to the "Cloud Monitor 2015" BITKOM study.
By working with German expectations and addressing German concerns, native-built clouds can propel Industry 4.0 further. Certainly, that's the impression of Sabine Bendiek, head of German operations at Microsoft Corp. (Nasdaq: MSFT).
Until recently, data protection and data security concerns held up cloud adoption in Germany. But with systems designed specifically to address those concerns emerging now, she predicts "a significant cloud market will develop in Germany." There also will be increasing demand for public-private hybrid clouds for businesses that want to keep data ownership of their trade secrets or other sensitive information under their own control while enjoying the benefits of industrial IoT connection, says Bendiek.
— Ariella Brown, Freelance Contributor. Special to The New IP
Box Zones enable businesses -- including medical and financial services firms -- in Europe or Asia to use cloud services while maintaining the security standards set by their own countries and more local data centers.