SMART SERVICE WELT Recommendations for the Strategic Initiative Web-based Services for Businesses - acatech

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SMART SERVICE WELT Recommendations for the Strategic Initiative Web-based Services for Businesses - acatech
SMART SERVICE WELT
Recommendations for the Strategic Initiative
Web-based Services for Businesses

March 2014
SMART SERVICE WELT Recommendations for the Strategic Initiative Web-based Services for Businesses - acatech
Imprint                                                         I

Authors                                                         Graphics
Smart Service Welt Working Group                                isotype.com
Prof. Dr. Henning Kagermann (co-chair)                          HEILMEYERUNDSERNAU ■ GESTALTUNG
acatech

Frank Riemensperger (co-chair)                                  Printing
Accenture GmbH                                                  Christian & Cornelius Rüss
Dirk Hoke (spokesperson Sub-committee 1)
Siemens AG
                                                                Contact
Dr. Johannes Helbig (spokesperson Sub-committee 2)              acatech – National Academy of Science and Engineering
Deutsche Post AG                                                Unter den Linden 14
Dirk Stocksmeier (spokesperson Sub-committee 2)                 10117 Berlin
]init[ AG                                                       www.acatech.de

Prof. Dr. Wolfgang Wahlster (spokesperson Sub-committee 3)
                                                                Publication date: März 2014
Deutsches Forschungszentrum für Künstliche Intelligenz (DFKI)

Prof. Dr. August-Wilhelm Scheer
(spokesperson Sub-committee 4)
Scheer Group GmbH

Dieter Schweer (spokesperson Sub-committee 5)
Bundesverband der Deutschen Industrie (BDI)

acatech – National Academy of Science and Engineering
                                                                The Working Group would also like to thank the following organisa-
                                                                tions for their support:
Editorial staff                                                 Accenture GmbH
Sigrid Stinnes                                                  Boehringer Ingelheim Pharma GmbH & Co. KG
Accenture GmbH                                                  Deutsche Bahn AG
                                                                Deutsche Post AG
Veronika Stumpf                                                 Deutsche Telekom AG
Stefanie Baumann                                                Google Germany GmbH
acatech                                                         IG Metall
                                                                Nokia GmbH
                                                                Robert Bosch GmbH
Copy editing                                                    SAP AG
Dunja Reulein                                                   secunet Security Networks AG

English translation
Joaquin Blasco
Dr. Helen Galloway

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Contents

               Contents

               Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04

               Working Group members | Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08

               1             Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

               2   Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
               2.1 The Smart Service Welt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
               2.2 New digital infrastructures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

               3             Challenges and opportunities for Germany and Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

               4             Use Cases in the Smart Service Welt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

               Use Case 1: From product to service: expanding a product portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

               Use Case 2: Use Case 2: Optimising the operation of industrial facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

               Use Case 3: Patient-centred digital healthcare: enhancing prevention and treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

               Use Case 4: Technology data marketing: a manufacturer expands the control point at
                           the customer interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

               Use Case 5: Europe-wide networking of charging station operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

               Use Case 6: Targeting consumers at the dinner table: a personal process assistant for buying
                           and preparing food and providing nutritional advice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

               Use Case 7: Virtualisation of telecoms infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

           2   Smart Service Welt
Contents
                                                                                                                                                                                                                                                                                                                        Contents
5          Enablers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
5.1        Software-defined platforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                 44
5.2        Service platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               47
5.3        Information and knowledge as the fourth factor of production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                              48
5.4        Education and training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        51

6          Innovation-oriented Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                     56
6.1        The importance of data to modern industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                             57
6.2        Security issues for government, industry and the public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                   59
6.3        Removing the entry barriers for SMEs and startups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                             60

7          Provisional recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

The Smart Service Welt Working Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

                                                                                                                                                                                                                                                                                Smart Service Welt                  3
I

Executive Summary
Executive Summary
Executive Summary

Information and communication technology has be-               nation of products and services to meet their individual
come an integral part of our industry and society as a         needs anytime, anywhere. Businesses must therefore
whole. Digitally enabled products, processes and ser-          get ready to cooperate with partners from other indus-
vices are increasingly being combined in innovative            tries and systematically and continuously adapt or ex-
ways to create on-demand, personalised Smart Ser-              pand their product and service portfolios.
vices that meet the needs of individual consumers.
These new services and business models make use of             Digital infrastructures and enablers
the growing volume of data that is being captured every        New digital infrastructures will be required to enable
day in all areas of our private and working lives.             physical and digital services to be combined to create
The disruptive impact of Smart Services is already             innovative Smart Services. These infrastructures will
being keenly felt in the retail trade, for example in online   play a system-critical role in the imminent transforma-
marketplaces. However, the changes are also affecting          tion of our economy and society. The key requirement in
the traditional business models of Germany’s flagship          terms of technology infrastructure is the upgrading of
industries, such as the automotive, mechanical en-             the broadband network in order to enable networking
gineering, chemicals, electrical engineering, medical          of products, services and people in different areas such
technology, logistics and energy technology industries,        as public transport infrastructure, healthcare and the
not to mention the rest of the economy. These indus-           urban environment.
tries are already benefiting from the support of Web-
based services. In the not too distant future, however,        However, it is the platforms built on this infrastructure
the business models of suppliers, manufacturers and            that will hold the key to success. These platforms can
operators alike will be faced with a genuine revolution        be divided into three levels. Smart Products themselves
as a result of being systematically digitised, analysed,       simultaneously serve as networked physical plat-
augmented with Smart Products and Services and net-            forms, for example an individual car acting as a node
worked with each other.                                        on the Internet or a machine in a factory equipped with
                                                               Web-based control. The Smart Products are constantly
Germany has set itself the goal of becoming the num-           capturing data which is then collated and processed at
ber one country in Europe in terms of digital growth.          the next level, known as software-defined platforms.
With its first strategic initiative “Industrie 4.0”, Germany   Since these platforms are deployed in many different
has already taken an important step towards being the          areas of application, they need to meet all type of
first country to tap into the potential of this new form of    requirements. It is therefore necessary to deliver re-
industrialisation. Now, the second strategic initiative,       search and technological developments across a wide
entitled “Smart Service World”, is focusing on the value       range of different fields. Software-defined platforms en-
chains that incorporate the Smart Products made by             able modular configuration of value chains which can
Industrie 4.0 once they have left the factory. Smart           then be combined to form network-like business mod-
Products are combined with physical and digital ser-           els. In this context, the key concept is virtualisation,
vices to create Smart Services that then can be mar-           thanks to which the different products, processes and
keted as a flexible, on-demand service.                        actors need no longer to depend on specialised hard-
An extraordinary paradigm shift is taking place in our         ware. Finally, the data are refined at the service plat-
economy. Individual suppliers of traditional products          form level in order to create Smart Services. The ser-
and services will no longer be at the centre of the new        vice platform connects all kinds of different product
model but consumers in their respective roles as users,        suppliers and service providers, allowing completely
patients, employees, technicians, passengers, entre-           new services to be put together. For this to be possible,
preneurs, etc. Consumers will expect the right combi-          all the companies involved must speak the same lan-

                                                                                                          Smart Service Welt   5
Executive Summary

                        guage. Service platforms therefore facilitate digital co-     tion will not be possible unless people are confident
                        operation between businesses by stipulating basic             about the security of both Smart Services and their per-
                        rules governing the interactions between the various          sonal data and convinced that the physical infrastruc-
                        actors and objects. They will provide standards, tools,       ture can be reliably controlled by digital means.
                        processes, interfaces and in particular simple mecha-
                        nisms for clarifying the legal basis of cooperation in dis-   Challenges and opportunities
                        tributed business processes.                                  The new digital business models in the Smart Service
                                                                                      Welt will cause existing control points to shift towards
                        The seven use cases described in this report show             software-defined platforms and service platforms or
                        how the business models and services based on these           lead to the emergence of completely new ones. As a
                        platforms may differ significantly depending on their         result, leading providers of digital business models in
                        specific application and consumer profile. This is illus-     different industries will attempt to gain control of the
                        trated by the example of a company that operates a            platforms to become the leading suppliers of the digi-
                        networked charging station infrastructure for electric        tal control points for Smart Services. However, any
                        vehicles. Only customers who have signed a contract           intermediary that is able to supply the customer and
                        stipulating how the service will be paid for can current-     data interfaces of smart, networked products and ser-
                        ly use this company’s charging stations. In the future,       vices can occupy a key service control point that could
                        the same company will use a service platform that             potentially relegate the manufacturers and providers of
                        holds data about all of its own charging stations as well     these Smart Products and Services from the position
                        as charging stations belonging to other operators. This       of leading suppliers to being just one among many in-
                        platform will provide a billing and payment system for        terchangeable suppliers.
                        electric mobility that is accepted throughout Europe,         Germany must treat digitisation as an opportunity and
                        allowing all electric vehicle users to charge their batter-   seek to creatively harness its disruptive power. Any
                        ies at any station belonging to any operator. Further-        business that is quick to recognise the opportunities
                        more, the marketplace also connects other service pro-        provided by Smart Services and implement the corre-
                        viders both to each other and to the charging                 sponding innovations will be able to tap into this po-
                        infrastructure operators. As well as simply charging          tential for growth. The digital infrastructures are a key
                        their vehicles, this means that customers can also ben-       to the success of German industry, since they are ush-
                        efit from additional services. For example, they can use      ering in a fundamental transformation of our economy
                        their mobile phones to find and reserve a charging slot       and society. Germany is a global market leader in the
                        at the nearest available charging station.                    engineering and manufacture of complex Smart Prod-
                                                                                      ucts. It now needs to develop critical system knowl-
                        The digital infrastructures are, however, no more than        edge about digital value networks and hybrid Smart
                        technological enablers. In order to unlock the full eco-      Services. Having already commenced work on intro-
                        nomic and social development potential of these digital       ducing the Internet of Things, Data and Services into
                        infrastructures, new innovation, information, organisa-       the manufacturing environment, Germany has consoli-
                        tional and human resources management methods spe-            dated its strengths in networked physical platforms and
                        cifically targeting Web-based services will be required.      is therefore in a well-positioned starting point.
                        Different businesses will need to pool their expertise
                        and form alliances. It will also be necessary to employ       Recommendations of the Smart Service World Working
                        education and training programmes and new learn-              Group
                        ing technologies to ensure that people are well pre-          Technological sovereignty is of system-critical impor-
                        pared for the digital society, both in their capacity as      tance in maintaining and expanding Germany’s ability
                        employees of new digital enterprises and as sovereign         to innovate and compete. A number of programmes ad-
                        consumers. Moreover, a successful digital transforma-         dressing some of the key technologies required to up-

                    6   Smart Service Welt
Executive Summary
grade Germany’s digital infrastructures have already
been established. As well as research and develop-
ment, the establishment of the Smart Service World
will also call for industrial and industrial policy initia-
tives. In addition to the continued development of the
Industrie 4.0 Platform, the Working Group therefore
recommends four further initiatives:

1) The establishment of cross-industry national
   competence centres for Smart Service platforms.

2) The establishment of knowledge platforms to
   enable the joint development of products and
   services by several different companies.

3) The formulation of an Integrated Research Agen-
   da on “Software-defined Platforms”.

4) The creation of a single digital market in Europe.

In order to be at the forefront of the digital Smart Ser-
vices market, Germany will need to develop leading
software-defined platforms and service platforms. This
will play an essential role in securing Germany’s com-
petitive position in the global market and will also be
indispensable for helping to find flexible solutions to
some of the challenges facing our society, such as
healthcare provision. There is an opportunity for Smart
Services bearing the “made in Germany” brand to be-
come known for providing systemic solutions, not only
in Germany but around the globe.

                                                              Smart Service Welt   7
I

Working Group members
Authors
Members | Authors
Working Group members | Authors
Chairs                                                Ole Vollertsen, Deutsche Post DHL AG
Prof. Dr. Henning Kagermann, acatech                  Dr. Heinrich Arnold, Deutsche Telekom AG
Frank Riemensperger, Accenture GmbH                   Thomas Schiemann, Deutsche Telekom AG
                                                      Ernst Joachim Steffens, Deutsche Telekom AG
                                                      Dr. Tom Kirschbaum, Door2Door GmbH
Sub-committee spokespersons                           Dr. Stephan Wess, Empolis GmbH
Sub-committee 1 – Integrated Production and Service   Prof. Dr. Emanuele Gatti, Fresenius Medical Care SE
Innovation                                            & Co. KGaA
Dirk Hoke, Siemens AG                                 Dr. Ullrich Dietz, GFT Technologies AG
                                                      Dr. Alexandra Schroeter, GFT Technologies AG
Sub-committee 2 – Internet and Service Economy        Sandro Gianella, Google Germany GmbH
Dr. Johannes Helbig, Deutsche Post DHL AG             Ansgar Baums, Hewlett-Packard GmbH
Dirk Stocksmeier, ]init[ AG                           Dr. Michael Brandkamp, High-Tech Gründerfonds
                                                      Management GmbH
Sub-committee 3 – Technological Enablers              Andreas Pfeiffer, Hubject GmbH
Prof. Dr. Wolfgang Wahlster, DFKI                     Malte Friedrich-Freska, idalab GmbH
                                                      Liliane Ludin, ]init[ AG
Sub-committee 4 – Business Organisation               Dr. Christian Plenge, Metro Group AG
Requirements                                          Tanja Böhm, Microsoft Deutschland GmbH
Prof. Dr. August-Wilhelm Scheer, Scheer Group         Christoph Wendker, Miele & Cie. KG
GmbH                                                  Dr. Boris Blechschmidt, Mister Spex GmbH
                                                      Dr. Fred Schneidereit, mobileVision GmbH
Sub-committee 5 – Innovation-oriented Framework       Dr. Michael Bültmann, Nokia GmbH
Dieter Schweer, BDI                                   Achim Schlosser, ParStream GmbH
                                                      Julia Kleber, polidia GmbH
                                                      Alexander Rigo, PS-Team Deutschland GmbH &
Members from industry                                 Co. KG
Marco Brunzel, AGIV GmbH                              Peter Schmehl, PS-Team Deutschland GmbH &
Dr. Joachim Schaper, AGT Group GmbH                   Co. KG
Uta Knebel, Allianz AG                                Harald Hönninger, Robert Bosch GmbH
Dr. Ralf Schneider, Allianz AG                        Dr. Dieter Hötzer, Robert Bosch GmbH
Markus Lampart, Blue Yonder GmbH & Co KG              Dr. Dieter Garus, RWE AG
Martina Bergmann, Boehringer-Ingelheim Pharma         Dr. Reiner Bildmayer, SAP AG
GmbH & Co. KG                                         Dr. Stephan Fischer, SAP AG
Dr. Till Luhmann, BTC AG                              Dr. Caroline King, SAP AG
Dr. Ralf Belusa, coronaris GmbH                       Michael Böffel, secunet Security Networks AG
Michael M. Kuhn, Daimler AG                           Volker Schneider, secunet Security Networks AG
Ingo Schwarzer, Deutsche Bahn AG                      Gerhard Mutter, SICK AG
Dr. Ingo Rollwagen, Deutsche Bank AG                  Michael Butschek, Siemens AG
Dr. Lars Slomka, Deutsche Bank AG                     Dr. Jan Kirsten, Siemens AG
Dr. Antje Stobbe, Deutsche Bank AG                    Michael Steinbauer, Siemens AG
Dr. Adrian Nitsche, Deutsche Lufthansa AG             Guido Stephan, Siemens AG
Tobias Maurin Broil, Deutsche Post DHL AG             Dr. Gero Decker, Signavio GmbH

                                                                                             Smart Service Welt   9
Members | Authors

                         Dr. Ammar Alkassar, Sirrix AG                            Prof. Dr. Günter Müller, Institute of Computer Sci-
                         David Hanf, smava GmbH                                   ence and Social Studies (IIG), University of Freiburg
                         Dr. Wolfram Jost, Software AG                            Prof. Dr. Andreas Knie, InnoZ
                         Carsten Kestermann, Software AG                          Prof. Dr. Rudi Studer, KIT (Karlsruhe Institute of
                         Fabian Schmidt, Software AG                              Technology)
                         Dr. Harald Schöning, Software AG                         Prof. Dr. Christoph Weinhardt, KIT
                         Sascha Schubert, Spendino.de                             Olaf Reinhold, Leipzig University
                         Lutz Villalba, Start-up www.madegrid.com                 Prof. Dr. Rainer Alt, Leipzig University
                         Michael Minis, tamyca GmbH                               Stephan Sachse, Leipzig University
                         Detlev Hoch, thehighground                               Prof. Dr. Gerhard Weikum, MPI (Max Planck Institute)
                         Dr. Reinhold Achatz, Thyssen-Krupp AG                    Prof. Dr. Andreas Butz, LMU Munich
                         Karsten Hoff, Thyssen-Krupp AG                           Prof. Dr. Tobias Kretschmer, LMU Munich
                         Klaus Bauer, Trumpf GmbH & Co. KG                        Sara Hofmann, University of Münster
                         Gerd Brenner, Trumpf GmbH & Co. KG                       Prof. Dr. Jörg Becker, University of Münster
                         Karsten Tonn, Trumpf GmbH & Co. KG                       Prof. Dr. Otmar Schober, University of Münster
                         Daniel Steinberg, Vodafone GmbH                          Prof. Dr. Susanne Boll-Westermann, Offis
                         Michael Milbradt, Volkswagen AG                          Prof. Dr. Oliver Thomas, Osnabrück University
                         Thomas Zembok, Volkswagen AG                             Dr. Sebastian Leder, HPI University of Potsdam
                         Alfonso von Wunschheim, Xing AG                          Prof. Dr. Christoph Meinel, HPI University of Potsdam
                         Andreas Antrup, Zalando GmbH                             Sirko Hunnius, The Potsdam eGovernment Compe-
                                                                                  tence Center
                                                                                  Prof. Dr. Tino Schuppan, The Potsdam eGovernment
                         Academic members                                         Competence Center
                         Prof. Dr. Achim Kampker, RWTH University Aachen          Elisabeth Eppinger, University of Potsdam
                         Prof. Dr. Günther Schuh, RWTH University Aachen          Thomas Niessen, Trusted Cloud Kompetenzzentrum
                         Prof. Dr. Stefan Jähnichen, TU Berlin                    Prof. Dr. Jens Dittrich, Saarland University
                         Prof. Dr. Volker Markl, TU Berlin                        Prof. Dr. Volker Wulf, University of Siegen
                         Prof. Dr. Jörg Müller, TU Berlin
                         Prof. Dr. Michael Abramovici, Ruhr Universität-
                         Bochum                                                   Members from other organisations
                         Prof. Dr. Claudia Langowsky, Brandenburg University      Elena Gomez, AOK – Federal Association of the
                         of Applied Sciences                                      AOK
                         Prof. Dr. Diane Robers, EBS Universität für              Jan Christian Sahl, BDI
                         Wirtschaft und Recht                                     Dr. Joachim Bühler, BITKOM (Federal Association for
                         Prof. Dr. Helmmut Krcmar, Fortiss München                Information Technology, Telecommunications and New
                         Walter Ganz, Fraunhofer IAO                              Media)
                         Dr. Josephine Hofmann, Fraunhofer IAO                    Dr. Pablo Mentzinis, BITKOM
                         Thomas Renner, Fraunhofer IAO                            Constanze Osei-Becker, BITKOM
                         Prof. Dr. Michael ten Hompel, Fraunhofer IML             Steffen von Blumröder, BITKOM
                         (Institute for Material Flow and Logistics)              Johannes Weicksel, BITKOM
                         Luise Kranich, FZI Research Center for Information       Dr. Roland Deinzer, BDA (Federal Employment
                         Technology, University of Saarbrücken                    Agency)
                         Prof. Dr. Stefan Tai, FZI Research Center for Informa-   Martin Gross-Albenhausen, bvh (German E-Com-
                         tion Technology, University of Saarbrücken               merce and Distance Selling Trade Association)

                    10   Smart Service Welt
Members | Authors
Sebastian Schulz, bvh                                Dr. Michael Littger, Deutschland sicher im Netz e.V.
Mirco Dragowski, Deutsche Startups e.V.              Sebastian T. Crusius, Hubject GmbH
Konrad Klingenburg, DGB (Confederation of            Prof. Dr. Christoph Igel, DFKI
German Trade Unions)                                 Dr. Norbert Reithinger, DFKI
Dr. Michael Liecke, DIHK (Association of German      Eva Schulz-Kamm, DIHK
Chambers of Commerce and Industry)                   Andreas Brandt, Deutsche Börse AG
Dr. Sandra Schulz, ECO Internetverband               Prof. Dr. Boris Otto, Fraunhofer IML
Iris Wolf, IG BCE trade union                        Andreas Steffen, ]init[ AG
Dr. Ludwig Bohrer, Department of the Interior and    Christian Fabry, RWTH Aachen University
Sport, Berlin Senate                                 Thomas Feld, Scheer Group GmbH
Olaf Franke, Department of the Interior and Sport,   Dr. Ulrich Löwen, Siemens AG
Berlin Senate                                        Fabian Hüske, TU Berlin
Stefan Kistler, TÜV IT GmbH                          Berthold Haustein, Würzburg University
Richard Goebelt, TÜV Vd                              Prof. Dr. Dr. Eric Hilgendorf, Würzburg University
Gerhard Schaas, ZVEI (German Electrical and
Electronic Manufacturers' Association)               Additional authors from the Working Group
                                                     sub-committees
Authors – core team                                  Dr. Svenja Falk, Accenture GmbH
Dr. Sebastian Krolop, Accenture GmbH                 Thomas Bachem, Deutsche Startups e.V.
Lutz Kneer, BDI                                      Prof. Dr. Arno Elmer, gematik GmbH
Dr. Lars Schatilow, Deekeling Arndt Advisors in      Nicole Weik, gematik GmbH
Communications GmbH                                  Prof. Dr. Björn Niehaves, Hertie School of
Dr. Uwe Radetzki, Deutsche Post DHL                  Governance
Jörg Heuer, Deutsche Telekom AG                      Dr. Constanze Kurz, IG Metall trade union

                                                                                                 Smart Service Welt   11
I

1 Introduction
1 Introduction
1 Introduction
In recent years, Information and Communication Tech-         forms of social organisation both within and between
nology (ICT) has spread at an extremely rapid rate.          the world of work and people’s private lives.
The growing digitisation of products and processes in        Both the power and the disruptive force of these inno-
our economy is triggering far-reaching changes in            vations first became apparent in industries that were
business models and the associated organisational            relatively easy to digitise such as the media, music and
systems, networks, consumption patterns and ways of          advertising (see also Fig. 1). In the space of a decade,
working. Germany has set itself the goal of becoming         new digital market leaders with a global presence such
the number one country in Europe in terms of digital         as Apple and Facebook have created completely new
growth. With the first strategic initiative “Industrie       business models that have undermined the business
4.0”, Germany has already taken an important step.           models of established companies that often only oper-
“Industrie 4.0” focused on the value chains used by          ate at a regional level. This trend is now gaining further
manufacturing industry to make Smart Products and            disruptive momentum as a result of the rapid growth in
the associated interactions between human beings             the number of products and services connected to the
and machines. This report will address the second            Internet. In the retail trade, Amazon, eBay and PayPal
strategic initiative, entitled “Smart Service Welt”. It is   provide a telling example of the dramatic impact that
focused on the value chains based on these Smart             hybrid services combining digital and physical services
Products once they have left the factory.1 The compo-        – based on a mix of digital marketplaces, secure online
nents of the value chains considered in this report          payment and first-class physical logistics – can have on
thus include the entire spectrum of tangible and intan-      traditional business models.
gible digitally compatible services (Smart Services).
The number of Smart Products and Services connect-           This transformation is set to affect a whole range of
ed to the Internet will continue to grow exponentially.      other industries. The basis for new services is provided
This will result in the emergence of numerous innova-        by the growing volume of new data being acquired
tive, Web-based business models as well as new               every day across all areas of our private and working

Figure 1:
Maturity of digital
business models

                                                                                                             Source: accenture

                                                                                                         Smart Service Welt      13
1 Introduction

                      lives. In future, Web-based and physical services will        This applies in equal measure to Germany’s flagship
                      be combined in order to meet the needs of individ-            industries – such as the automotive, mechanical engin-
                      ual consumers. In this report, the term Smart Servic-         eering, chemicals, electrical engineering, medical
                      es is used to describe these combinations of different        technology, logistics and energy technology industries
                      service types. The key to the competitive success of          – and to the rest of the economy, particularly innovative
                      Smart Services is entailed in the way they are custom-        small and medium-sized enterprises. While today, man-
                      ised to provide benefits to individual consumers, both        ufacturers’ and suppliers’ underlying business models
                      in specific situations and in their lives in general. By      are already supported by Web-based services, so far
                      adopting a context-specific understanding of their ‘ser-      they have not threatened them fundamentally. However,
                      vice users’, service providers can provide consumers          as digitisation reaches a higher degree of maturity, it is
                      with context-specific combinations of services that           unlikely to be long before businesses in Germany and
                      meet the specific requirements of their current situation     Europe will experience a genuine revolution. This revo-
                      in terms e.g. of work, leisure, health, mobility, travel or   lution will be characterised by the systematic digitisa-
                      education.                                                    tion of all business models in order to incorporate
                      The huge paradigm shift occurring in our economy will         Smart Services and Products developed and organ-
                      undoubtedly have social repercussions, particularly in        ised in smart networks.
                      terms of the continuing convergence of people’s work-         Greater flexibility and an increased willingness to ex-
                      ing and private lives. Individual suppliers of traditional    periment and take risks will become more important as
                      products and services will be replaced at the centre of       a result of the rapid pace of innovation. Startups will
                      the new model by consumers in their respective roles as       have an excellent opportunity to trial and implement
                      users, patients, employees, technicians, passengers, en-      new business models in this uncertain environment.
                      trepreneurs, etc. Consumers will expect the right combi-      Developments in the field of autonomous driving are an
                      nation of products and services to meet their individual      example of the enormous impact that these changes can
                      needs anytime, anywhere (see Fig. 2). These expecta-          have on an established flagship industry such as the au-
                      tions will influence future business models in the Busi-      tomotive industry. If and when it becomes possible to
                      ness-to-Business (B2B) market as well as the Business-        build and use autonomously driven cars that can reliably
                      to-Consumer (B2C) market. Consequently, businesses            and safely convey passengers to their destination, and if
                      of all types will need to address the impact of these uni-    suitable vehicles of the required size and feature set can
                      versal changes on their own business model.                   be made immediately available on demand for the cus-

                      Figure 2:
                      New digital infra-
                      structures and
                      Smart Services

                                                                                                                               Source: Deutsche Post DHL

                 14   Smart Service Welt
1 Introduction
tomer’s next journey, then huge numbers of people can           products and services will continue to multiply expo-
be expected to take advantage of this mobility service in       nentially across all industries. Smartphones and tab-
order to meet their specific needs. The key selling points      lets have rapidly become established around the
of autonomous cars will be increased comfort and the            world as the mobile access portals for a whole host of
fact that passengers will be able to engage in a wide           consumer-centric digital products and services, trans-
range of activities during their journey. As things cur-        forming the way people consume and live their lives:
rently stand, no clear favourite has yet emerged in the         “Digitisation is increasingly becoming a driving force
race for market leadership in a business model based on         in all areas of innovation and of society.”2 The Internet
customer access, vehicle fleets, logistics and digital          of Things, Data and Services will result in extensive
add-on services. The only certainty is that in the not too      convergence of the physical and digital worlds and
distant future the automotive industry will look very differ-   the emergence of smart digital infrastructures. These
ent to what it looks like today.                                have the potential to become a key driver of innovation
                                                                and growth. Any business – be it a manufacturer, ser-
However, it is important to avoid simply perceiving             vice provider or intermediary – that is quick to recog-
these far-reaching structural changes as a threat to            nise the opportunities provided by digitisation and
established organisations and businesses. Instead,              implement the corresponding innovations will be able
we should seek to actively and creatively harness               to tap into this huge potential for growth. It will be of
the disruptive power of digital innovations in order            critical importance for the German industry to estab-
to take full advantage of the potential that they of-           lish and become a supplier of these digital infrastruc-
fer for innovation and growth in both Germany and               tures, since they are ushering in a fundamental trans-
the rest of Europe. The number of smart, networked              formation of our economy and society.

                                                                1 See also the new German government’s coalition agreement of November 2013: “We will drive the
                                                                  digitisation of traditional industry through the strategic initiative Industrie 4.0. Thereafter, the next step
                                                                  will be to promote smart services.” (Coalition agreement between the CDU, CSU and SPD, Shaping
                                                                  Germany’s future, 18th Legislative Period (November 2013, p. 139)
                                                                2 See Industry-Science Research Alliance (Ed.): Industry-Science Research Alliance Prospect Study. Pros-
                                                                  perity through research – What tasks lie ahead for Germany? (in English), 2013, Berlin.

                                                                                                                                                     Smart Service Welt            15
I

2 Vision
2 Vision
2 Vision
2.1 The Smart Service Welt
Smart Services and Products that connect to the Inter-             allow both their manufacturers and intermediaries
net during operation will form the basis of a whole range          to develop new business models. In addition to the
of new data- and service-based business models. The                sale and servicing of products, they will also be
key enablers that need to be developed to make this                able to offer combined digital and physical opera-
possible are digital infrastructures and services that are         tion as a service. This will require the manufacturer
built on these infrastructures and can be reconfigured in          or intermediary to acquire a profound understand-
various different combinations in order to create new              ing of their customers’ needs and lives. One way in
value chains and networks (for further details, see Chap-          which they will be able to gain a competitive
ter 5). The trends outlined below will go a long way to-           advantage will be by gathering, analysing and
wards determining business models in the Smart Ser-                accurately interpreting large volumes of data. For
vice Welt:                                                         example, the operators of diagnostic equipment
                                                                   might collect and analyse data from all the diagnos-
•   Digital industrial convergence and alliances:                  tic devices that they are responsible for operating
    Individual companies often lack the capabilities               and use this data to create new services, e.g. to
    needed to unlock the development and growth                    provide suggested diagnoses. The volumes of data
    potential of the digital revolution. In order to create        involved in this type of model will be several times
    integrated physical and digital products and services          higher than in current business models.
    from components that sometimes come from very
    different industries, it will in many cases be neces-      •   Open innovation platforms and crowdsourcing:
    sary to combine know-how from different companies.             While a large amount of dedicated, specialised
    The prime examples of this imminent digital industrial         knowledge already exists today, it is very difficult for
    convergence are the alliances that have been formed            an individual to obtain information about the overall
    in the fields of electric mobility and networked smart         picture. In the future, ecosystems will be created for
    cars. The ability to rapidly translate new alliances and       knowledge sharing, training and continuing profes-
    efficient forms of cooperation into innovative busi-           sional development (CPD). An increasingly impor-
    ness models is set to become a key competitive                 tant role will be played by teams that use virtual
    advantage. This provides opportunities for new                 collaboration platforms to discuss complex ques-
    intermediaries to bundle data and services from                tions, find solutions and create innovations anytime,
    different companies. While startups can play a                 anywhere. The startup ResearchGate is an excellent
    particularly innovative role in this regard, manufactur-       example of this trend. This professional social
    ers also have a chance to act as orchestrators,                networking site networks some three million scien-
    shaping value networks in keeping with the interests           tists around the world, allowing them to upload and
    of their own company and promoting the establish-              share papers and scientific data, discuss research
    ment of ecosystems.                                            questions and find people to collaborate with. Both
                                                                   knowledge and learning and CPD services can be
•   Everything as a Service: Combinations of prod-                 traded like goods in these expert communities. The
    ucts and services will no longer necessarily be                global digital knowledge sharing that this enables
    acquired as property – instead, they will simply be            can, for example, help to accelerate the develop-
    used flexibly “as a service”, as and when required.            ment of digitally enabled products and services and
    While sharing and service business models such as              reduce the time to market of the next product
    those used by car hire companies are nothing new,              release. The short life cycles of consumer IT prod-
    they are gaining in popularity. Smart Products will            ucts are a sign of things to come in this regard.

                                                                                                             Smart Service Welt   17
2 Vision

                •   Security and trustworthiness: The Smart Service          threat for businesses. By supplying the customer and
                    Welt will only flourish if users have complete           data interfaces of smart, networked products and ser-
                    confidence in the security and dependability of          vices, intermediaries can create a key control point that
                    Smart Services. If your autonomous car crashes           could potentially relegate the manufacturers and pro-
                    into a tree either because the steering system failed    viders of these Smart Products and services from the
                    or because someone hacked into the service, or if        position of leading suppliers to being just one among
                    you learn of opaque agreements between the               many interchangeable suppliers. In this context, the
                    operators of a piece of diagnostic equipment that        meaning of ‘technological sovereignty’ is no longer
                    you are using and your life insurance company, then      confined to the association of the “Made in Germany”
                    you will lose faith in these services. The collection,   brand with world-class product technology. Instead,
                    storage and analysis of large volumes of data pose       the term also now encompasses a certain symmetry
                    new data protection, data security and regulatory        between product technology, digital business models
                    challenges. If physical infrastructure is to be          and services, not just within Germany but throughout
                    operated digitally, then it is of paramount impor-       the globe.
                    tance for this process to be secure. Protecting
                    individuals’ privacy, ensuring end users’ autonomy
                    by granting them comprehensive user and modifica-
                                                                             2.2 New digital infrastructures
                    tion rights, and providing protection for digitally      IT technologies have now become so affordable that
                    networked products are thus all key requirements         virtually any product or service can support digital con-
                    for the successful functioning of the Smart Service      nectivity and expandability. A tipping point has been
                    Welt. Furthermore, attitudes will need to change in      reached, whereby these technologies have gone from
                    the B2B market. Even today, the sensors on board         being an optional extra to comprising an integral part of
                    manufacturing machinery can be managed over the          new solutions. Indeed, the reality is that they are al-
                    Internet. This has led to concerns among the             ready in widespread use all over the world.
                    owners of the machinery about the danger of their        New digital infrastructures are required in order to en-
                    company’s know-how falling into the hands of third       able the synergistic combination of physical and digital
                    parties (see Use Case 2). A new approach to              services that characterises the Smart Service Welt.
                    cooperation between companies is therefore called        While there is no doubt that the much-discussed up-
                    for, together with clearly defined rules governing       grading of the broadband network as part of the “Tech-
                    this type of interaction. One option might be to use     nological Infrastructure” (Layer 4) is urgently neces-
                    independent intermediaries.                              sary, this on its own will not be sufficient to allow the
                                                                             new digital business models to function properly. It is
                Germany is a global market leader in the engineering         only the platforms built on top of digital infrastructures
                and manufacture of complex smart components and              that allow these infrastructures’ disruptive impact to be
                products. In view of the increasing proportion of soft-      felt (see Fig. 3). The system-critical role of these plat-
                ware embedded in these Smart Products, the fact that         forms in the imminent transformation of our economy
                they can connect to the Internet anywhere in the world       and society will be comparable to that of the railways
                and the emergence of new, data-centric business mod-         during the 2nd Industrial Revolution.
                els fuelled by the use of Smart Products, it is necessary    The following types of digital platform will have a key
                to reflect on how German and European industry can           part to play:
                develop critical system knowledge about digital value
                networks that combine digital and physical services.         •   Networked physical platforms (Smart Products,
                As already mentioned above, the ability to combine very          Layer 3): Billions of Smart Products made by all
                different digital and physical services to meet a specific       kinds of manufacturers now exist for a wide variety
                need can constitute both an opportunity and a potential          of different applications. These products all connect

           18   Smart Service Welt
2 Vision
Figure 3:
Layer model:
digital infrastructures

                                                                                                           Source: DFKI / acatech

    to the Internet during operation. Many of them are           lished, e.g. for mobility (see Use Case 5), electricity
    also equipped with high-resolution sensor networks           distribution, operating production equipment (see
    that allow them to provide context-sensitive real            Use Case 4), managing buildings or entire cities
    world data both cheaply and in almost any granular-          and in the field of healthcare (see Use Case 3).
    ity. Moreover, Smart Products use actuators in
    order to make their capabilities available as the        •   Service platforms (Smart Services, Layer 1):
    building blocks of digital services. Smart Products          Web-based business models that dynamically
    thus simultaneously act as networked physical                combine digital and physical services require
    platforms. Examples include individual cars acting           service platforms to enable modular configuration
    as nodes on the Internet or Web-based control of a           of value chains which can then be combined to
    machine in a factory.                                        form network-like business models. Within these
                                                                 networks, all manner of suppliers of goods and
•   Software-defined platforms (Smart Data, Layer                services provide the service user with services that
    2): The next requirement for creating innovative             are either planned or put together on an ad hoc
    business models is to enable planned or ad hoc               basis (see Use Case 4). There are a number of
    cooperation between Smart Products and their                 industries in Germany whose strength on the global
    users. Software-defined platforms can employ                 market would appear to make networked solutions
    virtualisation to integrate heterogeneous physical           as service platforms for Web-based services an
    systems and provide connectivity for Smart Prod-             attractive proposition. These include mobility and
    ucts. Highly automated cloud centres process huge            logistics, healthcare, energy and resources, the
    volumes of data (Big Data) and use learning                  retail trade, manufacturing, home, building and
    algorithms to extract information almost in real time.       urban management and education. A service
    This information is then combined to generate new            platform in a city could, for example, act as a
    knowledge (Smart Data). The key technologies                 marketplace for a range of Smart Services delivered
    include virtual data networks, semantics, big data,          through smart cars, homes, streets and indeed
    real-time analytics and cloud services, particularly         smartphones. These services might include digitally
    mashups as a service. It seems likely that a whole           advertised special offers for people passing by a
    host of software-defined platforms will be estab-            retail store based on their personal preferences or

                                                                                                          Smart Service Welt        19
2 Vision

                   a function that directs electric vehicles to the         In order to facilitate digital cooperation between busi-
                   nearest charging station in response to an auto-         nesses, service platforms or intermediaries and spe-
                   mated message sent by a sensor in the car’s              cialised service, providers will have to supply stand-
                   battery indicating that it needs recharging. A variety   ards, tools, processes, interfaces and in particular the
                   of intermediary business models will also become         frameworks and principles needed to clarify the legal
                   established on these service platforms. These will       basis of the cooperation (legal frameworks and on-
                   be operated by providers who use data and                boarding processes). This will be done in form of dis-
                   information obtained through the operation of            tributed business processes and will allow participa-
                   third-party products to provide new, value-added         tion and cooperation between the different market
                   services offering e.g. cheaper prices or additional      players to be enabled rapidly and without the need for
                   benefits (see Use Cases 2 and 6). Taxi apps, for         significant additional preparatory work on behalf of the
                   example, enable digital, personalised and automat-       individual actors.
                   ed location-based communication between the              Intermediaries can help to build trust and enable new
                   customer and the next available taxi, bypassing the      forms of cooperation. They provide the links that bridge
                   need to go through the taxi company’s office.            the gap between the value creation components of dif-
                   Services become ‘Smart’ Services through the use         ferent actors, enabling these components to be inte-
                   of smart data to configure and adapt the service to      grated into a closed value chain. By balancing out the
                   meet the needs of the individual consumer and            interests of the different actors, intermediaries ensure a
                   specific context.                                        win-win situation for everyone involved. Knowledge that
                                                                            they have obtained and made available about one par-
                Service platforms will make it possible for individual      ticular customer relationship can be applied as appro-
                services in specific areas of people’s lives to be com-     priate to a different customer relationship, thus facilitat-
                bined to create aggregated value-added services for         ing overarching global optimisation. Other functions
                consumers. In order to enable flexible networking in a      that can be performed by intermediaries include quality
                digital ecosystem, the participating companies must         assurance, the development of new business contacts
                be willing to cooperate, must establish operational and     and the clarification of the legal situation. It is clear from
                information communication structures with each other        all of the above that cooperation between different
                and must be prepared to share previously proprietary        businesses and industries will constitute a key com-
                knowledge and the associated data and information.          petitive advantage in the Smart Service Welt.

           20   Smart Service Welt
I

3 Challenges and
  opportunities for
  Germany and Europe
3 Challenges and opportunities

                                      3 Challenges and opportunities for Germany and Europe
                                      The approach taken by German innovation policy is to          to build and control software-defined platforms and ser-
                                      consolidate the country’s strengths while at the same         vice platforms so that they can become the leading sup-
                                      time minimising its weaknesses. Thanks to its highly-         pliers of the digital control points for Smart Services.
                                      skilled workforce and productive research infrastruc-         Moreover, they will seek to increase the scalability further
                                      ture, German industry is highly competitive compared          by creating digital ecosystems. In other words, they will
                                      to other countries around the world. Furthermore, Ger-        make their platforms available so that third parties can
                                      many is a leading supplier of manufacturing equipment.        use them to develop their own Web-based business
                                      Work has now commenced on the implementation of               models, thus ensuring that they become even more
                                      the strategic initiative “Industrie 4.0” which focuses on     widely adopted and unlocking new sources of revenue.
                                      the application of the Internet of Things, Data and Ser-
                                      vices in industrial processes. Germany has thus already       These platforms are still in the early stages of their de-
                                      taken an important initial step towards being the first       velopment and it remains to be seen whether the win-
                                      country to tap into the potential of this new form of in-     ners in this new market will be companies that already
                                      dustrialisation and towards using the resulting quantum       feel at home in the virtual environment and have under-
                                      leap in knowledge and experience to secure the future         stood that digital business models must be wholly de-
                                      of its manufacturing industry. Over the coming years,         mand-led and finely tuned to customers’ needs, or
                                      smart factories will produce an even wider range of           companies that are rooted in the real, physical world,
                                      Smart Products that will act as platforms for Web-            i.e. the companies that currently manufacture and oper-
                                      based services, providing new opportunities to create         ate Smart Products and Services. For example, will tra-
                                      both value and jobs. By taking the measures described         ditional manufacturers be able to cope with the chang-
                                      above, Germany has consolidated its strengths in the          es required to make autonomous cars, or might actors
                                      third layer (“networked physical platforms”) of the digi-     from outside of the automotive industry steal a march
                                      tal infrastructure (see Fig. 3) and is therefore is there-    on them by providing customer-centric solutions? Even
                                      fore in a well-positioned starting point.                     today, it is becoming apparent that a key role will be
                                                                                                    played by businesses that succeed in developing and
                                      Nevertheless, further continuous effort and investment        operating the platforms described above (see Use
                                      will be required if Germany wishes to play a leading          Case 4), controlling access to them, gaining the end
                                      role in actively shaping the impending changes that are       user’s acceptance and/or acting as intermediaries for
                                      set to result in the disappearance of the traditional split   Smart Services (see Use Cases 2 and 5). In most cas-
                                      between the industrial and service sectors. In the new        es, the keys to commercial success will be large num-
                                      Smart Service Welt, digital business models will be ac-       bers of users and the ability to create economies of
                                      companied by a shift in existing control points and           scale.
                                      the emergence of new ones, i.e. a shift in the respon-
                                      sibility of decision-taking pertaining to a business mod-     Having taken the first step with Industrie 4.0, the cru-
                                      el’s critical aspects. In a Web-based home care sce-          cial second step now needs to be addressed. This will
                                      nario, for example, it is quite conceivable that the care     involve identifying the specific consumer and user pro-
                                      service provider could be involved in decisions relating      cesses that are important to German industry, defining
                                      to the technical equipment used, the dosage of the pa-        them in terms of software-defined platforms and ser-
                                      tient’s medication and the selection of doctors to be         vice platforms and ensuring that the relevant best
                                      included in the network.                                      practice solutions and standards are supplied by Ger-
                                                                                                    many. Funding programmes have already been estab-
                                      As a result, the providers of digital business models in      lished for some of the key technologies required to
                                      different industries and areas of application will attempt    build the relevant digital infrastructure:

                                 22   Smart Service Welt
3 Challenges and opportunities
1. Sensor networks and Cyber-Physical Systems              2011, has delivered a number of key advances in this
(CPS): Powerful microcomputers known as embed-             area. However, further research is required in order to
ded systems are now being built into all kinds of          realise the vision of ‘Web-based services’.
different objects in their billions, endowing these
objects with ‘intelligence’ (Smart Products). Smart        4. Cloud computing: By separating applications and
objects equipped with sensors and actuators record         the information required by them from the underlying
data from their surroundings and then use the data to      physical infrastructure and the method used to deliver
influence these same surroundings. The physical and        them (virtualisation), it becomes possible to use IT
virtual worlds thus converge to create CPS.1 Advanc-       resources on demand, anytime, anywhere. As a result,
es in sensor technology are making it possible to          resources can be used more efficiently, new applica-
capture ever more detailed information about the           tions become available more rapidly and billing will
environment, thus enabling models to produce               generally be based on actual usage. Cloud computing
increasingly accurate approximations of reality. Thanks    is thus a key enabler of innovative Web-based ser-
to programmes such as AUTONOMICS (Federal                  vices. The TRUSTED CLOUD (BMWi) programme
Ministry for Economic Affairs and Industry – BMWi),        has begun to address the requirements in this area.
Germany is well placed in this particular area.
                                                           Overall, Germany already meets many of the key re-
2. Big Data: The wealth of data generated by digital       quirements for using software-defined platforms and
processes – commonly referred to as big data – can         service platforms to become a leader in the Internet of
be mined using information extraction processes and        Things, Data and Services. Germany is well placed
smart learning algorithms based on classification,         with regard to sensor networks and CPS, big data and
regression and factor analysis. The data are analysed      semantic technologies, although more work still needs
in real time and patterns are identified. These are in     to be done in some areas to ensure that the relevant
turn used to derive information which can be corre-        technologies are successfully and profitably marketed.
lated in order to produce new knowledge, turning ‘big      However, as far as cloud computing is concerned, the
data’ into ‘smart data’. In other words, huge volumes of   global market is currently dominated mainly by the US
unstructured data with a low information density are       but also by China and Singapore. Almost half of the
distilled into high-quality data. Efforts to find smart    leading cloud computing services on the German mar-
ways of using large volumes of data are being sup-         ket come from the US.3 In order to create system-criti-
ported by the German government through the                cal, software-defined platforms, it will be necessary to
funding of programmes such as BIG DATA (Federal            drive the development of new cloud solutions from
Ministry of Education and Research – BMBF) and             Germany and elsewhere in Europe. Clarification of the
SMART DATA (BMWi).                                         legal framework and the ability to guarantee security
                                                           are among the most important challenges that will need
3. Semantic technologies allow data to be enhanced         to be addressed in order to encourage greater take-up
with background information and linked to other            of cloud computing by businesses, particularly SMEs.
relevant units of information. As a result, machines
become capable not only of reading content but also        The establishment of software-defined platforms and
of understanding it, thus transforming data into           service platforms is of fundamental importance if Ger-
information. This information can then be browsed and      many and Europe wish to become global market lead-
interpreted more rapidly and efficiently. Instead of       ers in the Smart Service Welt. The key to this will be
being swamped with huge quantities of information          the creation of a single digital market in Europe that
from search engines, it becomes easier for people to       allows consumers to use online content and services
“find” the right services and providers. The THESEUS       in different countries and provides businesses, par-
research programme (BMWi)2, which concluded in             ticularly SMEs and startups, with straightforward ac-

                                                                                                     Smart Service Welt   23
3 Challenges and opportunities

                                      cess to a European digital economic area. We need to
                                      make the most of the opportunities that the Smart
                                      Service Welt has to offer Germany and the rest of Eu-
                                      rope. To this end, action programmes should be set
                                      up to encourage consortia of large-scale undertak-
                                      ings, SMEs and startups to work together to develop
                                      the relevant platforms and establish them on the glob-
                                      al market, thus ensuring that we become global lead-
                                      ers in Smart Services.

                                      1 For more details, see: Eva Geisberger/Manfred Broy (Eds.): agendaCPS – Integrierte Forschungsagenda   3 See Hans-Jürgen Appelrath/Henning Kagermann/Helmut Krcmar (Eds.): Future Business Clouds. Ein
                                        Cyber-Physical Systems, acatech STUDY (in German), March 2012, Sankt Augustin.                          Beitrag zum Zukunftsprojekt Internetbasierte Dienste für die Wirtschaft, acatech STUDY (in German),
                                      2 Federal Ministry of Economics and Technology (Ed.): The THESEUS Research Programme: New Tech-           January 2014, Munich, p. 106.
                                        nologies for the Internet of Services, 2010. Home page: theseus-programm.de/.

                                 24   Smart Service Welt
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