Oracle TV presents: Industry Innovations—new business models
welcome to Industry Innovations a new Oracle TV series where we talk technology new business and revenue models and share Innovation news and insights and all of that starts right now hi everyone Welcome to our brand new industry Innovation series here with Oracle TV I'm Kendall Fisher your Oracle TV anchor and I am here with burchin kaplanalu great job thank you I've been practicing now burchin is our new Oracle TV correspondent and host of this new series we're so excited to have you virgin thank you a few housekeeping notes before we get going with today's Awesome event make sure that you use the comments to ask any questions that you have throughout today's conversation because we will be doing a live q a at the end of today's event and hey if you don't have any questions that's okay too you can always just give us a shout out tell us where you're tuning in from or tell us what you are excited to learn on this new series and with that Merchant I think it's time to put you in the hot seat what do you think let's do it all right so for starters where are we right now what is this facility and what is it used for so we're in Chicago this is Oracle industry lab we build this as a simulated construction site in 2018 we opened in August and we've been testing validating Technologies with customers and partners then two years ago we actually built start building this this site this is a big facility in the same location at the same location and it is built as a test bed I saw before this you were in a trailer right out for this is way bigger than that trailer right out front you've come a long way in the last couple years well trailer was our garage right like a like a little startup so we started uh being a trailer and still outside that turned into the big facility that we're in right now got it okay so this is called the industry Innovation lab and the industry Innovation series what industries do we focus on here in the Chicago lab we focus on construction engineering Energy Water communication Public Safety and Manufacturing the do we have labs in other locations we do we have two other labs and they're focused on different use cases so we have one in Reading UK and and one in Sydney Australia and what industries are those focused on so the one in Reading UK we have construction engineering energy communication food and beverage and hospitality and the one in Sydney we have construction engineering got it okay so you say industry use cases um for somebody who might not know what does that actually mean what are we actually doing in these Labs so one key differentiator is we are actually physically doing things okay let me give you an example so if we want to pick a sensor and we want to embed into concrete and Link it to a schedule we can physically do it it's really hard for our customers to actually try some of these Technologies when they're running day-to-day operations so this lab is built as a simulated site it's not a demo Center we pick those use cases with them we look at the business process we look at the use cases we figure out what technologies fits in and then we physically do that well if it doesn't work we do it again we do it again eventually these things work and they become commercially available Solutions so kind of zooming out of all this I'm I'm hearing you say all this and I can kind of put the pieces together but I'm going to ask anyway how is this helping our Oracle Community our customers and businesses overcome their biggest challenges right now well each industry has their own specific challenges but overall what we're really working on here is improving productivity improving safety with the power of cloud 5G and AI so the high level we're really leveraging Technologies the skills of the people and the Technologies kind of combined together to solve those problems okay I got it um that this is a I mean this is between the amount of industries that we cover at our different locations um and the topics that you just hit I mean this is a lot of content but we're going to cover all of this in this new series right absolutely so we're not going to lack content that's one thing because we have been working on this for years we come up with commercial available Solutions some are prototypes we also have drones robots things that are people are pretty interested to figure out we've been working on different AI Solutions so kind of looking at this big picture we're gonna provide fly on the wall in some ways yeah the work we do at the lab to the audiences I love that I love this idea of us kind of jumping in like you said as of our audience being able to participate as a fly on the wall rather than this kind of really heavily curated content that you often see with events like this you know across different platforms I love that and I also love what what our audience might not know is Virgin isn't just the lovely face of Oracle TV he's actually an expert that can speak to all of this which I think is going to bring just shed so much more light and insight into these various areas and topics so super excited about that and how how often are we going to be streaming and where are we going to be streaming where can our audience make sure to tune in for more well we're going to be doing this once a month we're going to pick certain use cases and have the audience actually experience them and we are going to also have this in Oracle connect and so we're kicking things off right now aren't we who's our first guest on today's segment and what will we be covering today well we have our first guest today Muhammad Soni he is the associate dean of Northwestern Kellogg's business school his expertise is innovation his expert it's his business model so we're really going to talk about how these Technologies change business models and what's really changing the environment after all technology is awesome but we really will need to make sure that new business models come into our lives and we'll be able to generate Revenue right it's like that you're set up for it and that it's not going to be a business a business model that doesn't work for you absolutely well I'm very excited to learn from Mohan and I will actually be back with Mohan and burchin at the end of today's segment we're going to answer as many of your questions live with with Virgin and Mohan um so make sure you keep commenting to ask those questions and again if you don't have any questions just keep shouting out telling tell us where you're tuning in from and again we will answer as many of you as we possibly can and with that Burch and I'm going to hand it off to you what's next well you're going to watch a minute video about what we have done last year meanwhile I'm actually going to walk out to our dry lab I'm going to meet our colleague Tiffany and spot spot is the robot she's doing some testing out there so we're going to talk about the technology what's used for so this is another fly on the wall moment so you'll be able to see what we're doing here then I'm gonna walk to the manufacturing floor and meet Mohan so enjoy the video we'll be back foreign [Music] [Music] hi spots hi Tiffany I see you doing some testing today what are you working on yes today we're testing spots connectivity on Verizon's Network awesome so spot is a product by Boston Dynamics it has cameras at the front it has cameras on the side and it has a camera at the back it uses cameras to map its surroundings that's how it can navigate we also have a lidar attached to it what lidar does is it actually allows you to map even further distances the feature of autonomous operations I personally believe multimodal AI what that means is you're going to have multiple data sources and AI will be able to make sense out of them in this example it's the lidar it's the cameras it could be radar and we are also seeing that autonomous vehicles are actually using similar Technologies too what I really want to talk about is this attachment so this is a laser scanner it's from Ferro Technologies three years ago March 2020 we were under construction this lab was being built and Pharaoh Technologies brought Austin Dynamic spots and its prototype attachment to the laser scanner to the site well it was really interesting everyone stopped working all the workers even us we all came to check it out and it was really interesting to see the responses everybody was excited they wanted to see what the use cases you can do what the robot was going to do but after a while as we continue the prototyping people got used to it people got used to having a robot actually on the site what we did is the integration of the laser Scanner with the robot but also management of the data in Oracle smart construction platform we're going to put this in the comments you'll be able to check out that product robots are pretty hot topic I did a post about friendly robots got over 2 million views on LinkedIn and there are tons of comments and it was really interesting to see how we all responded there were some comments about excitement and you know this is the future and there were also some comments about you know how scared people were so I want to ask all of you what do you think I personally believe autonomy is gonna allow us to do less repetitive tasks it's going to bring productivity it's going to improve our safety on operations yeah please comment now what I'm going to do is I'm actually going to walk on the manufacturing floor and I see that Mohan and my colleague eilish are actually having a conversation we're gonna walk there and really talk about use cases business cases and business models because the important part is Technologies are coming into our lives especially for Industries but we really have to figure out how new business models can actually come with these new technologies follow me hi eilish I need to talk to Mohan for five minutes can I steal him hi Mohan hi hi Russian good to see you good to see you thanks for coming my pleasure So currently you are on our manufacturer floor of our test bed and today I really want to talk to you about business models especially subscriptions models so before we get to talk about that I really want our audience to get to know you a little bit if you can introduce yourself and you know what you do for a living uh sure I'm uh at Northwestern where I'm the associate Dean for digital Innovation and I also run the center for technology and Innovation I've been there 30 years and I studied the interface of Technology Innovation and marketing so I'm curious uh you know when we look at these business models why businesses are looking into business models to reinerate themselves well as you start to transform your business by using new methods of delivery for instance your not delivering software over a network that shift has to be accompanied by a shift in how you make money and therefore the business model shift has to accompany the transformation of your products and services so when we talk about business models which ones you see as the most popular ones one thing I'm seeing is an evolution towards subscription because subscription really reduces your capex and makes it into Opex it also creates greater transparency and accountability for the vendor um and it's a pay-as-you-go model I'm also seeing the evolution of usage based models more for infrastructure the utility type model where you use your your charge based on how much you consume and I'm also seeing the evolution of gain sharing or value-based pricing models so subscription usage and gain sharing models these are some of the innovations that I've seen so I really want to focus on the subscription model and in Industries we need to have hardware and software working together yeah most of us have subscription services for gaming for shopping other services but when it comes to Industries you know you need to have Hardware tied to it too so when we look at that can you think of an example that actually model has has been successful yeah consider for instance a military drone you know sold by a company like Textron and this drone is used for surveillance over enemy territory so the business model there is pixels over Target which is I pay you for the imagery and I don't buy a drone you maintain it and so on so in effect I am subscribing to a service or I'm paying you by the transaction so Hardware software Consulting is all wrapped into one you know we've also seen in a consumer realm take a company like Peloton where they used to sell the hardware but they also had a software-based subscription service now they've combined the two and for one subscription fee you get access to the machine as well as the software so I'm seeing hardware and software and information and Consulting all rolled into one subscription-based service well that reminded me a story I read a few months ago how vehicle manufacturers are looking to say well you know if you commute to you know between two spots frequently they'll be able to map it with the cameras everything else and one day they will be able to come and say to you hey Mohan would you like to subscribe for the service we will have assisted driving or autonomous driving for you for that route only so you're subscribing it and you're gonna get that service so um when we look at these models what are the benefits that you see people actually switching to subscription models I think the benefits is first of all you're paying for what you use is pay as you go pay as you grow there's also greater accountability because you can have slas service level agreements and you can monitor the quality of the service you're providing and it also reduces the capital burden on customers because they're not paying for the equipment or the capital expense upfront they can spread it out over a period of time on the vendor side too it's it's helpful because now you have an annuity Revenue stream it's more predictable revenues and as opposed to selling Capital Equipment which is very lumpy you have much more consistent Revenue Stream So investors like that you know and it's a more predictable sort of Revenue so I think it helps on both sides and it creates a more collaborative relationship between vendors and customers because you're now your interests are more closely aligned than it used to be in the traditional enterprise software world where you used to rely on upfront pricing or licensing so can you give us an example from Manufacturing yeah so in manufacturing assume that you're selling a pump right which is used in say a mine to pump slurry now that pump you're you're trying to optimize the performance and very importantly you want to minimize the downtime so imagine that iron output sensors on that pump and I start to create a offer you a service which not only includes the operations of the pump but also predictive maintenance Diagnostics and performance optimization so I can see that done for instance in a in a wind farm or a turbine I can see it done for medical diagnostic equipment so any Capital Equipment in a manufacturing whether it's an assembly line or a shop floor uh two things that you can do is one is operations optimization which is making your asset work harder and be more productive but also preventive maintenance which is preventing unscheduled downtime so these are two really important applications that we can optimize through a subscription-based service actually that reminded me we use algorithm msat2 which detects anomalies on machinery and other things but we also like here at this lab we have been using autonomous drones to capture data and what we have done recently is rust action so you know right especially in U.S I can tell you this our infrastructure is Rusty yes Rusty so we do need to automate the process and also do it in a you know safe manner whether it is utilities whether it's construction whether it's a bridge construction right so you know it's cheaper it's faster most importantly safer right you don't need to have a bucket to go down a bridge to take images or a human in Spec you can collect this data but another thing that's coming from these models what we're realizing is you don't need to have scheduled maintenance right right so you can actually have maintenance the systems recognized and set up you got to go and they only flag the exception so you focus on what needs to be fixed as opposed to having the person go out and visit all of the towers or all of the poles or you know absolutely and how about our most important important asset our health because I see that coming too in terms of subscription how do you think that's going to work I think that we are entering into an era where uh you will be monitored continuously with a combination of sensors now you have sensors that can monitor your vitals your your blood sugar uh you know Peripheral arterial disease the smart socks so with all of these what we can do is really set up again preventive maintenance for human beings so imagine a situation where you have an elderly patient who is recovering or living you know by themselves so today you have to put them in a nursing home you have to have 24x7 monitoring but imagine that that monitoring was done remotely so any exceptions were flagged so that nurses and doctors can be on call so that way one nurse can monitor maybe 20 patients while earlier you would have to have a one-on-one plus they can have live in the comfort of their home as opposed to being in a nursing facility so I think that there's a huge potential particularly for elderly patients with chronic diseases that need to be monitored on a continuous basis can dramatically lower the cost of care and improve the quality of life for these patients now that's really amazing so I want to summarize it we said a lot of things can you summarize that uh you know what problems subscription models uh will solve so subscription models solve the problem of reducing the capital cost of acquiring expensive industrial assets they also improve the predictability of revenues for the vendors and for the customers they provide greater transparency greater accountability and they really align the interests of the vendor and the customer towards creating better outcomes so one more question so if I'm a business leader I'm you know listening to this I want to figure out how I could switch to you know that business model what should I be looking for well moving to subscription is not just changing the pricing model consider the world of software where if you are moving to a SAS model a subscription-based model you have to re-architect the product you have to you have to allow for you know joint tenancy you have to allow for you know you have to create a service operation that's 7 by 24 by 365 you have to improve the user interface you have to create performance monitoring so it's it's a matter of not only re-architecting the product but also changing the organization with the mindset of services so it's a really fundamental transformation and I would advise Business Leaders not to think of this mainly as a change in the way we price but it's really in a change in the way you do business wow that's fascinating insights thank you so much I also see Kendall uh walking towards us I think she's gonna have some questions I know I know time flies when you're having fun but I am back and unfortunately we're almost at the end of our segment today but I have some questions that came in from the audience I actually have been furiously writing them down so that I could ask each of you these questions so the first one is for Mohan um this one is coming from Serena in San Francisco what are the pros and cons of setting up a subscription based business models so the pro is that you know you get predictable revenues I'm going to take the vendors perspective right you get predictable revenues you get a closer relationship with the customer you're more accountable and you have to think much more carefully about how you create customer value it's closer to customer value the challenge is that now you want to absorb the capital cost right because now you own the asset that they're subscribing to think about how many data centers software companies have had to create and the capital investment that they have to make so there's an upfront investment that you're observing from the customer's point of view so those are the pros and cons God I and I was while you were saying this I of course thinking wait so what about also the what it takes on the back end to get set up and that's actually our next question who came from um it came from Olga in Mexico City who says if a business adds or changes in some way to a subscription model what back end processes then need to change What do businesses need to be thinking about infrastructure right because now you have to actually own the capital assets whether it's a data center whether it's equipment um you have to create a 24x7 service operation so because now you're not selling a product and forgetting it about about it for several years you're actually providing a service that has to be always on so that mindset of always on is important so at the back end you need to create the monitoring capability the service capability as well as the infrastructure on the capital assets that will be needed to provide the service yeah that makes sense virgin discipline uh this one is coming for you this is from Frank in Boston Frank asked how can we learn more about the work in which you're doing at the industry Innovation Labs well they can check our website it is oracle.com innovation oracle.com Innovation we got that yep
well that is all the time we have for today Mohan thank you so much for joining us and Virginia did a great job in your first Oracle TV correspondent segment so congratulations thank you Matt where can people go to learn more about what's to come from the series well I would suggest people to go to Oracle connect we're gonna put that in the comments okay great and for all of you who are tuning in of course thank you so much for joining us on our very first segment of the industry Innovation series um and there's so much more where that came from like virgin said so make sure that you give us a like a follow or a subscribe wherever you're tuning in from and we'll see you later bye foreign
2023-04-23 10:22
