SECO SpA | Big Conversation | Dario Freddi, Seco Mind Co-CEO
hi everyone and welcome to this new video about seco i am marco parisi head of ir today i have a guest with me dario freddy the ceo of seco mind our iot and artificial intelligence branch hello dario how are you doing hey marco how you doing pretty good here very good so dario let us understand today a bit more let's say about what's going on today in terms of digitalization artificial intelligence i mean there's a lot of talking about data analytics smart devices but how big this market is and what's the opportunity for a company to leverage ai let us financial practitioners understand this yeah so first of all we don't have so much time because this question could have an answer which is days long and i mean when you talk about digitalization and in general what is happening in the connected devices in artificial intelligence space we need to take a few step backwards i mean this is nothing new and this is very important to say because all of these trends have started years and years ago and simply have impacted different segments and different verticals than the ones we're talking about today and the ones the seco is in so if we look backwards i mean i always like to say that the the mobile market was always several steps ahead of the industry and i believe that what we're seeing today in the industrial market or in the embedded market as we like to call it is nothing but the very same thing that has happened before for the mobile market and consumer users what is it basically it is turning products into services and i always like to make an example right because to me innovation is always about innovating processes more than the technology itself let's take the calculator why would you ask me why about the calculator because you will never put a calculator in your hand or in your pocket and you will never go around with a calculator but if you need to do some math a calculator will be handy well guess what if i ask you this question 20 years ago maybe maybe more you will have told me well i don't have a calculator with me but guess what everybody who's seeing this video right now has a calculator in his pocket why because simply the processes that we built allow you to have that as a service now this is a very very adherent example if you think about what is the transformation that we're looking at today in the embedded device space and in the connected devices space you will not have thought about paying your coffee with your cell phone a few years ago you will not have thought about doing a lot of things that today are so where are we we are basically diving in a continuous innovating world in which services are evolving as we speak and services are being created as we speak the challenge today is not asking ourselves how big is the market because the market is so big this is very hard to size the total addressable market that we're talking about is potentially every single device that is used for non-consumer purposes or even for customer purposes think about your oven think about think about your vacuum cleaner think about anything you have in your house that runs some electronics on board you expect them to be connected today so the total addressable market is literally everything you see around you that has some electronics in it but where does it go nobody has a as the answer what we can say though is that the trend by which we look at this market is that these devices will need to become smarter and smarter as demand evolves i mean the usual counter argument is iot is old the ai is already let's say on the downward trend but the reality is that we are just at the beginning and why do i say that because as much as it is true that a lot of devices are already connected not all of them actually just a very small portion of them are currently capable of providing smart services as we intend them so doing something active and proactive for you and if in the consumer world we start seeing a trend that makes some sense if you look at the industry which is our primary market we address at seco that is literally just in its early days apart from some companies that have been thinking very much ahead are very much ahead in this revolution but if you look at the seat of the market it's still quite a blue ocean if you ask so where is it going it's going in a direction in which we see a steady growth in the market beyond what seco is doing gartner says that every analyst is saying that and most of all the difference in the value chain that all of this is being is actually asking for is changing radically as we speak i mean if we look backwards five years ago when i still was in this market there was a very big proliferation of different hardware vendors different isds different companies providing i.t services there was the whole cloud deal that was still let's say in process and there was a lot of confusion so companies who wanted to invest needed to go to different partners put them all together and make something out of it and sometimes they didn't even think about the business model because technology was such a challenge but of course you will solve the technological problem first now the shift that we see is that as technology evolves as we are more capable of offering all all-round services and seco let me say it's a big pioneer in that sense because we are really pulling together everything that makes sense in this value chain companies now are starting to look for partners who can take them by the hand and walk them into this world and make it so that they have the technology the business model and everything delivered on time with the right price tag because that is really what is making the difference and if you ask me what is going to be the driver for this trend to evolve i truly believe it's going to be the capability of companies to get services exactly in the way i just described so that's also why i think we are really a key player in this space because if you look at our vision and if you look at the state of the market i really think we kind of pull together the right threads to make it happen for those companies who need today these kind of services on top of the devices that's great and let's say from what you said i would have five or six questions coming to my mind but let's say let's start from from one very important point you mentioned which is talking about the customer benefits i mean it's not just about let's say adopting the latest technologies for the sake of it but for the real benefits that they can have on the business of the customers and so this sounds more like a conversation you may have with a c level rather than the r&t department doesn't it yeah marco you know me i'm a technology person i'm all about technology but when it comes to what you're saying reality is that when it comes to a company this is more of a strategy discussion i mean let me explain let me expand on this right technology is our job it's seco´s job at seco we build amazing technology i think we do it very well i think we have amazing pieces of technology and the reason why people come and buy and come and use our technology is because they don't want to make it themselves why would you ask because it is super expensive it doesn't scale with the cost of your product and most of all you don't want to reinvent the wheel i mean one of the main reasons why we are successful is that we operate in so many different verticals and we can reapply the very same concept and the very same technology which is then completely battle tested on the ground on so many different customers that will not have the means or even the money to invest to make it happen by themselves this has been something that has happened in the i.t world since as long as i can remember now of course if you if you pull together the threats that i mentioned before it is obviously a discussion that is for the c-level and for the management because we are not talking about technological advancement in your product i mean of course we are but it's not for the sake of it it is for the sake of changing the way you do business you were asking me how companies are can benefit out of this right am i right so what will be your first answer for example let's try you let's let's reverse the table what will the answer to that let's say i would say i want to cut my cost i want to optimize my cost i want to increase my revenue yeah i mean cutting cost is usually the yeah i mean the usual argument is always cutting the cost right and it is a very sound argument because i mean the the first use case for ai was telling you i mean giving you insights for making decisions so helping you making your daily decisions as a c- level as an executive but also of course to find ways by which you can cut your cost but i mean i think this is not an argument which is sound enough to drive a transformation unless you're cutting costs by a mile i think that is there is another very different argument that you mentioned which is increasing revenues because when you look at servitization it all starts with a service that you can provide to your users and i don't think it's just about increasing revenues i think it's all about changing the way these revenues are built today product companies will sell you the oven we'll sell you the vacuum cleaner and we'll sell you everything that we talked before if you're an industrial customer you will buy your equipment you will buy your whatever and that is it then maybe you will buy maintenance on top and maybe you will buy some customizations but if you're talking about services you want to sell subscriptions you want to sell something that this customer sticks with and you want to change radically the way you sell what you build now this is really where the servitization comes into play because at the end of the day if you need to revolutionize your business model you need to revolutionize your product and this is no longer a product this is a service i mean we've been seeing a software as a service everything is a service something something is a service you're all sick and tired of it but the reality is that all of these aas thing that we all see and we all talk about it is really a shift in how revenues are built in how cash flow works because that's another big deal and another big topic and most of all in the way your product your service is deployed and delivered to customers that is a complete revolution in the way you put things together so i think that the real drive and it's not really about technology it's about the fact that companies executives are seeing the possibility of changing the way they do business and maybe a few years ago the market wasn't ready arguably somebody will tell you the market is not ready today but as always there is always a let's say a ladder of maturity right in which not everyone is ready at the same time but from my own personal experience and looking at the market in general i will say that i've been surprised over the last month to see how many companies that you will not even think of are willing and actually ready to sell their stuff as a service and you will be even more surprised to learn that their customers are willing to dive into that so i think that there is a transformation going on that is happening is way faster than we can perceive from the outside and as the word evolves as your consumer mind is influenced by the fact that you're buying subscription you're buying netflix you're buying spotify you're buying everything you're buying your car as a lease today you're no longer buying a car you're paying a lease so everything is becoming a service in your own pocket and now executives are starting to think that everything should become a service in their opinions rather than their own wallets that is really the transformation at a management point of view that really drives this kind of idea of changing the way we sell stuff and again it's not because of the technology because of the technology we can enable that but it's because of the fact that the world is changing the way we use our services is changing the way we are building our products is changing and executives are changing the way they think so that is real the real driver i think of this revolution absolutely so basically we sniffed this opportunity and said okay we want to be faster than others so we bought four small companies including yours created seco mind and spent let's say three years of work to develop clea basically very simple speaking a software suite that allows customers to gather insightful data from their own field devices in real time through artificial intelligence so we launched clea early last year and i would say it already had a pretty good return in terms of revenue and adoption rate from customers walk us through how the platform was born was the business model and let's say a few cases in which it has been already adopted really want me to talk for years don't you i mean you really you really are testing if i can if you're patient yeah not really my patient but i mean there will be so much to say right and i do think it's it's really a unique project both in the way it has been built and in the way it has progressed so yes we we built clea and seco mind out of m&a and i think it is really important to mention that the product was born out of existing assets because do not make the mistake of thinking that clea is just a few years old and it's not mature it's not ready for prime time the reason why we went for m&a and the reason why companies like mine were acquired is because we put together existing assets and join them together to create a new product this really gave us the edge in making sure that we were building something that was already battle tested and ready for prime time we already have a lot of deployments ongoing and i have to say that you know since when we started the seco mind though the whole business has been booming and i don't really want to make a sales pitch here but as a matter of fact and if you look at the share numbers if you look at our financial results i think it shows by itself and i don't even need to vouch for it because if you look at the numbers and if you look at how the iot business has grown it really tells you something about the the amount of interest we are seeing from the market not just interest but interest with orders and pos behind it that i think it is really the main thing that we should address now as for the platform itself it is pretty much the synthesis of the vision that explained before it is a mean for companies to build their own services and transform their products into connected products first and into services they can sell to the end users that they have or the end business that they have because to us it's not only b2b to us it's also b2b2c which is a booming market and it is another thing that we cover quite widely and quite formally with clea as a use case and it's it's something very important to keep in mind because at the end of the day the user of this platform could be you if you buy the right product and the right product is sold to an end user so this has to be really really kept in mind and again if i said before that technology should not be the concern of who implements that technology is our concern and i do believe that the technology we built and pulled together with clea it is indeed something that is state of the art and it's proven by the fact that we are seeing a lot of recognition also from developer communities and all of our customers are extremely let's say satisfied to say the least about the technical things we put in place and this we really want to make life easier for developers we want to make life easier for those who are going to implement our products that we want to make it easy for customers and partners who are going to build their next big thing on top of the platform so we work daily for that and i think we're doing a very good job because we see a lot of appreciation which goes also beyond the financial statements right and and these really can only be measured by going out in the field and asking hey are you doing how do you like the product how what are you building and we are starting to see customers building things that we didn't even think about which i think is the best measure of success for these kind of products and and and really it is it is great and it is amazing to see traction picking up so fast in a way that i personally haven't foreseen would have been that fast but on one hand i think we're doing a very good job on the other hand i think we have a very cool product and the market is becoming ready so i mean when you pull this together it is to be expected that you will grow faster than you initially thought but it's i mean looking at the future i think that we recently announced right in our quarterly results called what's our vision for the future and again this vision is simply the one i mentioned at the beginning of this call we want to become an apple store an app store not an apple store sorry but of course right this operation is is taken from the apple store because we copy successful companies we copy companies we believe are cool and apple is really a cool company which we believe has a great product and so we want to bring that concept that very same concept in the industry why because we believe that we are very horizontal today but as our capability of going through verticals of all we will be able more and more to provide ready-made products ready-made apps which will not give you 100% of your end products but will give you 90% of your end products let alone your own customizations and your own look and feel and it is something that really is gearing towards making it so that you can pull together a product and a service in a matter of weeks look at the como... deal we just announced right this is a huge step in that direction if you read the announcement we are mentioning that we will be releasing a specific clea version tailor made for the smart industry field now that is just the first step towards the vision of putting together an app store in which not only smart industry but smart buildings vending machines the coffee world many other verticals can be addressed but most of all you can address this market yourself because we want to open up this ecosystem and make it so that developers software houses system integrators partner companies will be able to build and resell their applications on clea we want to become the technology enabler for an ecosystem that we already building today an ecosystem that generates value within itself that is really our vision that is really our goal this is really where the company is going and we are building this because we have an amazing team we have amazing skilled developers and we have a very crisp vision for m&a and as you have seen i think that the bolt-on deals that we just made are really a testimony to the fact that we are very focused on that vision and we can't believe it because of course we want to deliver this fast we believe we have a market advantage we believe we have an edge right now and we want to make it so that this edge will be kept in the future and i think that you know if we look at the last year or so the deals that we pulled together and the deliveries we we pulled together the customers who jumped on our bandwagon are really the best proof beyond anything i can tell you in this call about how the strategy is working so all in all i think that we will pursue this strategy and the reason why clea will become stronger is basically because i believe that as the more we put together verticals the more we put together use cases and the more we start partnering with companies to create complete solutions the more the product will be appealing and the more customers will be able to implement it fast today i think that the real goal we have is to make it even easier even simpler even faster to put your connected products into a service really asap great great absolutely so well we have put together a lot of things in a very short time but i think this conversation has been very very helpful to help our viewers financial practitioners understand a bit more what we are developing into the iot and artificial intelligence space i think we can wrap it up here but maybe in a short future update our viewers again with a few more good news with what we are developing on clea i i just like giving out good news you know me right but but you know to wrap it up i think that i mean first of all thank you very much for having this conversation i really i really liked it and i you know it's always good to be able to to share your vision and to you know talk about what we're doing and what we're building i think that you know if you want me to wrap it up with the last message i believe that the important thing to consider is that what we're building here is basically something that is driven by strong demand is driven by crisp vision and is backed by the fact that it has been done before elsewhere and i think this is super important when you consider the odds of success that something has to have in the future right so i really think and i hope that i gave you the crisper vision as possible about what we have in mind and what we're building and you know if you're looking out for our press releases you're gonna hear more and more customers jumping on clea in use cases that i really bet you will not think about that's absolutely true so thank you very much dario for the chat brilliant as usual thank you very much everyone for watching us and looking forward to speak soon ciao since you watch this company video until the end i'm guessing you like the video that's probably because we work very hard to create the most engaging and value-added content possible for you if you're 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2022-05-31 11:30
