Interview with Thomas Svensson – ThingWorx

Thomas Svensson, Senior VP & GM EMEA at ThingWorx

At IoT World Forum 2014 in London (UK), M2M World News had the opportunity to interview Thomas Svensson, Senior VP & GM EMEA at ThingWorx.

M2M World News: ThingWorx has been on the market for some years now in the US but also in Europe. What do you see in terms of market dynamics: which segment is growing the fastest according to ThingWorx, in Europe in particular?

Thomas Svensson: We are focusing on the discrete manufacturing side because of the PTC background in that segment. Therefore, we see a lot of applications around remote service and software upgrades together with remote monitoring of the usage and performance of the products out in the field. That’s a mature business we are addressing with IoT types of services and solutions. Of course, there is a lot of talk around smart cities, smart homes, healthcare…but we feel it is a longer term business whereas for us the low-hanging fruit is in connected products on the discrete manufacturing side. That’s where we see the biggest traction right now.

M2M World News: Is there a market segment where the ThingWorx value proposition is particularly strong or relevant?

Thomas: If you take the discrete manufacturing market, it is fairly broad but you can break that down into, for example, heavy machinery, industrial, medical devices, electronic devices and white goods, that’s where we try to focus right now.
As far as smart cities are concerned, there is a lot of talk, we see many research projects but that’s not where we see our short term business. It is more in connecting an industrial pump for example, sending firmware updates to that pump or remotely controlling its performance, checking if it is not vibrating or heating too much, doing predictive maintenance, etc. It can also be windmills, elevators, ventilation systems on the roof… This type of application is much more mature today. And that’s where the fit with PTC is interesting because PTC customers are actually manufacturing those products, and adding connectivity to them makes a lot of sense.

M2M World News: Do you see more & more IoT projects coming, i.e with consumer-oriented products, or is the market still mostly in professional M2M applications?

Thomas: As far as we’re concerned, we are more enterprise-focused, but it is good to see the market moving to consumer applications. This is going to help us stimulate the market. Moreover the programming kits from companies like Google and Apple are going to help the connected home market and then help create the hype around IoT. And in the end, it helps us give visibility to our M2M projects. Beyond professional and consumer categories, we can also think about the benefits of what we call “connected operations” i.e connecting a process to optimize it. It can be for automated vending for example. Connected products and connected operations are in fact two flavors of the same thing, but that is where most of our business is today.

M2M World News: To transform businesses, data from remote assets must be converted into valuable information and business decisions. Is ThingWorx positioned yet or will be positioned in the Business Intelligence part of an M2M solution?

Thomas: Yes, we are there already. The objective with the ThingWorx solution is to take the data out of the devices but also from other systems like databases, ERPs, CRMs, unstructured data coming from the web like social medias, the blogs, weather forecasts…and bring all this data into one application. And ThingWorx enables to develop this application very quickly, with all these data streams. And bringing this value back to the company and to the end-user will make them spend money in IoT. If you don’t bring a clear business case with real value taken out of the application, you cannot drive investments in IoT or M2M.
Concerning Business Intelligence, you can almost say that ThingWorx is a BI tool because we are aggregating different data sources and then, we give the ability to process this data through different BI modules provided by our partners. There are many of them because most of the solutions available on the market are specialized by type (artificial intelligence for example) or market vertical. There is no “one size fits all” solution and we support the most recognized solutions available on the market.

M2M World News: Does ThingWorx offer the development tools only or do you also offer consultancy services to help your customers get the most out of their assets or from their M2M solution?

Thomas: We are not willing to provide long-term day-to-day consultancy services. We are rather doing a quick evaluation of where they are today, where they want to be tomorrow, and with our ROI analysis tools we help them monitor the impact of process changes so that it is easier for them to take a decision to start the project. So yes, we provide consultancy services but on a very high level.

M2M World News: The ThingWorx solution helps companies prototype & develop faster and more easily their M2M solution. From your experience, what part of the development process is perceived as the most complex by your customers? In other words, in which part of the development your solution is seen as delivering the most value?

Thomas: If you take the lower ends of the stack in the overall solution like the sensors, the devices, the connectivity…most of these components are going to become more and more a commodity over time, with a competition focused on price. Then, the higher up you go in the stack, so the device cloud, the connection up to an application layer, this is where you are going to make the difference in the future, this is where the businesses are going to see the value from an IoT solution. So the complexity is going to move up through the stack over time. In the past, like 5-6 years back, most of the discussions where on the sensors, the edge technologies and the connectivity side. But now, the subject is more on the upper layers of the solution.
The more data streams you have from different sources, the more devices you get in the solution, the more demands you are going to have on the application layer, in order to get valuable information from the data collected and bring value to the end-user or to the company. So the complexity is going to move upwards and the lower end is becoming a commodity. We see this trend very clearly already.

M2M World News: Has ThingWorx the sufficient surface to assist or support the thousands of IoT/M2M projects out there? What is the ThingWorx growth plan: organic growth or acquisitions?

Thomas: The way PTC has been working in the past is that they buy technologies which fit into their solution. First acquiring ThingWorx, then buying Axeda, then next probably acquiring some kind of analytics or big data company, then maybe some other complementary technologies companies around it. So we are looking at getting bigger, combining both organic growth and via acquisitions. Then, of course, it is a very diversified, spread-out market, with a lot of startups everywhere. Some of them are going to survive, some of them are going to be acquired and some of them are going to die. It is going to be a fairly hard market in the next 2 to 3 years, with a lot of consolidation to come. The bigger ones will get bigger. You are going to see movements from IBM, movements from Salesforce, Cisco, Bosch… some major players are going to buy technology to put it into their solutions. We saw that in the ERP and in the CRM business where only the big ones remain after a consolidation phase on the market. It will be the same with IoT, with a consolidation to come, and PTC is going to participate to that transformation. PTC really wanted to move quickly and proceed very early to strategic acquisitions, which makes us seen now as a leader. Moving early is really an advantage.

M2M World News: As an expert in the development of M2M/IoT solutions, what is your implication or contribution to M2M standardization?

Thomas: We participate in some of the standardization communities but there are so many of them! There will be standards for sure but they will be in all the different layers of the solution, from sensors and connectivity up to the device cloud and application layer. There will be standards emerging over time based on the best technologies and we will be following and supporting them very closely.

M2M World News: From your experience, are there any specificities of the EMEA market compared to the US market?

Thomas: The EMEA market is fairly mature, not necessarily in the volumes deployed, but there are many indications that countries like Germany, France, UK, Sweden… are fairly advanced in approaching this IoT/M2M market and they are ranking us higher than in the US. US is usually quite early developing new technologies. ThingWorx and Axeda were born there, but the companies using the technologies are moving quicker in Europe compared to the US. Maybe companies here are keener to test new technologies, because they are trying to get the business benefits out of them whereas in the US, companies are a bit more conservative in the way they work. I have the feeling that Europe takes over the leading edge of IoT right now. And I have recently received some research saying that UK is the most mature and advanced IoT country in the world right now based on certain stats.

M2M World News: Would you like to add anything to conclude this interview?

Thomas: Well, to give you an idea of how fast things are going for ThingWorx, it may be worth giving a few figures: at the beginning of the year, ThingWorx was 40 people in the world and now we are 320 people just dealing with IoT, including 120 developers! So we are in a massive investment phase to put the company at the leading edge. In Europe we have recently grown the team from 2 to 40! Even though we do not make profit yet we do everything to be well positioned to get the benefits from the market acceleration which is happening now!

Interview conducted by Manuel Nau, for M2M World News, on November the 25th at the IoT World Forum in London (UK).

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