Harnessing the power of ecosystems for long-term growth

Why a collaborative ecosystem approach as a business model is becoming more and more fundamental to the global tech and industry sector. And what it takes to build it up successfully.

Ever since the blacksmith John Deere developed the first self-cleaning steel plow somewhere in Illinois in the early 19th century, his name has become synonymous with engineering excellence. Above all: tractor construction. Recently, it has also come to stand as role model for a genuine tech revolution: the tractor as an IIoT platform. Modern John Deere tractors collect data and upload it to clouds, which farmers use to manage their entire business. John Deere is no longer just selling tractors, but serving an ecosystem for digital agriculture. And it does so with such a range of partnerships and applications that the name John Deere today stands for a model case among digital thought leaders: how to transform a product company into an ecosystem player. How to ecosystemize perfectly. 

To successfully build up ecosystems today, he has identified four factors as critical:

1. New technologies

To become a relevant driver of future ecosystems, companies must strongly develop their tech capabilities and solutions. In the digital arena, AI, machine learning and cloud applications help develop solutions that integrate all layers of technology. And with unlimited server capacity, 5G, big data and new display levels through augmented and virtual reality, the IIOT can provide companies with new ways of working. Innovations such as AMR (autonomous mobile robots) or AM (additive manufacturing) combine hardware and digital solutions – with unimagined opportunities for productivity, quality and synergies.

2. New business models

Innovative service solutions on a partnership basis are permeating all industries. Software as a Service (SaaS) is being transferred to many other applications: Output as a Service, Robots as a Service, X...as a Service. Another powerful approach: Gain Sharing, where the partner company only participates in the predefined profit of its customer. And completely new options are available for Co-Creation or Minimum Viable Product Development (MVP). No company can do this alone. They need to be either a relevant partner or the leader of an industry ecosystem. A network of partners can better identify trends and improve the customer experience – and someone in the ecosystem will have the next big idea.

3. New market players

Significant innovation pressure also comes from new B2B entrants. In the IIOT, AI and software world, there are two in particular: start-ups and established global tech players. Some of them are also becoming industry- and vertically-leading ecosystem players – for example, by expanding IIOT platforms across all industries. Or by taking automation and Industry 4.0 offerings to new levels. 

4. Leadership: Know your role and success factors in the relevant ecosystem

Among the many options to join an ecosystem or to start one yourself, only a few are really successful. These 5 questions should be answered before starting:

• What is the benefit and added value of the specific ecosystem for the customers?
• What are the success factors of this ecosystem?
• What is the maturity level of this ecosystem?
• What is my company contributing to the ecosystem?
• What is the benefit for my company being part of the ecosystem

Building ecosystems has been a central part of the Körber strategy for years – with the goal of becoming a leading global ecosystem player in the machinery and process industry sector by 2024. For this, Körber is continuously developing its technology stack and partnering to define and shape ecosystem-relevant solutions. Today, the company already generates more than 20% of its revenue from software and digital solutions, and around a quarter of our employees work in these areas. And Körber is working specifically to increase these numbers sharply.

In order to position itself as a leading ecosystem player, Körber continuously invests in M&A and partnerships. “Through recent strategic partnerships with Geek+, global market leader for AMR, we are pooling our joint expertise around the integration, consulting and maintenance of robotics solutions, enabling us to offer customers even more efficient, flexible and intelligent logistics operations”, says Stephan Seifert. More examples? The cooperation with the Canadian robotics company Attabotics to support European companies with completely new technological solutions in warehouse management and order fulfillment. The majority investment in DAIN Studios, taking Körber’s expertise in Smart Data and AI strategies to a new level. Or the partnership with the global investment firm KKR, opening up entirely new ways for us to implement a successful growth strategy for Körber’s Supply Chain software business. 

“My personal belief is: If you want to remain a leader in your industry, get started, and accelerate or strengthen your ecosystemizing process”, says Stephan Seifert. “In the future, market leadership will be decided by ecosystem leadership more than ever.”