Digitalisation is fundamentally about exploiting new software technologies. Software is what makes a product intelligent and enables it to communicate. Any product category utilising an adjective such as “smart” or “autonomous” is about exploiting embedded intelligence and connectivity, ie software. For example, Smart Industry is about integrating machines into manufacturing systems and manufacturing systems into systems-of-systems with machine learning and artificial intelligence delivering end-to-end flexibility, higher throughput and lower costs. In this context, the role of hardware is set to become progressively commoditised while software will be the generator of increasing value.
Understanding the ability of software to generate value is utterly key to successful digitalisation and not a core competence widely present amongst the leaders of High-Tech industry. To borrow from Michel van Genuchten, only when the CEO of a company knows how much of his company’s revenue is generated through software has that company truly embraced digitalisation.