Bain@MWC
CEOs of machinery companies are looking for ways to exploit digital as a source of new revenue. Industrial machinery and equipment company CEOs attending MWC understand the need for digital transformation and its potential to redefine how products are created, sold, and serviced. Digital capabilities are already driving enormous efficiency and productivity gains in plants and factories.
Digital also enables a shift from a product-centric business model to a solutions-centric one. Tailored solutions have growth rates several times the size of machinery companies’ current portfolios, so CEOs are seeking to exploit digital as a source of significant additional revenue. MWC will allow them to explore the following notable trends:
The share of value creation that can be attributed to hardware will decrease from around 31% of a company’s profit today, on average, to around 23% by 2030. CEOs can therefore protect value by developing software and automation capabilities that allow machines to interoperate with other equipment through connectivity. Crucial will be exploring how to develop business solutions around the machine that can be tailored to customers’ needs, bundling equipment with software and services, and examining how to monetize it all.
The emerging winners are already thinking beyond machines. They’re developing a deeper understanding of how their products fit customers’ processes and finding new and creative ways to deliver value within a larger ecosystem. For those CEOs, MWC is about how to take advantage of this opportunity, grow in sophistication, and shift their value center further up the technology stack.
CEOs of tech-savvy manufacturing firms are taking advantage and disrupting the market with services based on connectivity and enhanced data. Potential inspiration for doing this could come from leading cloud providers, who will be at MWC targeting segments of the machinery profit pool with solutions such as global plant monitoring and optimization.
Industrial machinery and equipment companies are increasingly aware that winning in the next decade will depend largely on how well they adapt to one trend: the further commoditization of their machines and equipment. Advanced services are expected to account for 30% of their service revenue by 2024, so MWC is a must visit for CEOs wanting to implement the Machinery as a Service agenda.
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