Digital Transformation in a COVID-19 Economy

IoT ONE, a research and advisory firm focused on industrial digitalization, recently released an interesting report on the impact of COVID-19 on industrial digital transformation. The objective of the Industrial-Digital Trend Tracker research was to look beyond short-term crisis management to assess medium-long term trends that will be impacted by COVID-19. Insights were contributed by IoT ONE analysts as well as 36 business leaders regarding the impact of COVID-19 on operations, business performance, and markets. In total, the research identified 56 industrial-digital trends impacted by COVID-19 across 5 domains: Technology, business, operations, investment, and macroeconomics.

Not surprisingly, technologies like robotics, artificial intelligence, augmented reality, additive manufacturing, software as a service and the like were consistently mentioned throughout the report as technologies that could be used to facilitate the transition from a conventional industrial economy to an increasingly connected, mobile, and remote workforce. Whereas many companies had envisioned a future where these technologies could be implemented, it seems that COVID-19 is accelerating investment and moving them more rapidly from the planning stage into mainstream solutions, in many cases, to support the transformation to remote work.

Of course, the cloud is central to digital transformation.

As one research contributor described it, “Cloud adoption was already an active debate. We are now approving more cloud solutions on a case-by-case basis, typically for siloed systems or one-way data flows with a low cybersecurity risk.”

Manufacturers are adopting cloud-based software for non-critical systems to take advantage of flexibility and remote access. Software vendors too are leveraging the cloud to move from traditional perpetual licenses to subscription models to stabilize their cashflow in an uncertain economy. OEMs are adding subscription offerings to create recurring revenue on top of capital expenditure revenue models.

One contributor to the report added: “We had already shifted our revenue model from license to SaaS subscription in 2019. This model has enabled us to sustain regular cashflow at a time when new orders are being delayed.”

Underlying all these transformative shifts to next generation technologies and cloud services is cybersecurity. The research notes that security issues are multiplying due to the rapid adoption of unsecure edge devices for monitoring and control as well as the proliferation of real time remote collaboration tools being employed in unprotected home offices outside of their secure IT environments. For software vendors too, the growing popularity of cloud-based applications and services is mandating that they take a close look at secure licensing mechanisms, software protection from cyberthieves, user authentication and access controls, not only to enable remote workers to safely access their applications, but to also provide maximum protection of the vendor’s Intellectual Property.

Here at Wibu-Systems, we are seeing increased interest from ISVs in our cloud licensing solutions to enable their users to securely access their applications from the home office, as many companies are now looking at home working as a long term solution vs. a temporary reaction to COVID-19. In addition to secure licensing, our cloud solutions are also enabling ISVs to take advantage of new business models, like subscription, features-on-demand, and pay-per-use licensing.

In the industrial world, the report notes that COVID-19 is accelerating development of "Smart City Platforms" to coordinate activities and track population health and behavior. Smart Cities, Smart Factories, and Smart Systems, are all driven by Internet-connected sensors, controllers, and data collection and analytical tools, all of which are vulnerable end-points susceptible to cyberattack. Here again we have made a great investment to provide embedded system developers with tools to protect their smart systems and devices with technologies like secure boot, authentication protocols, and sophisticated encryption, all geared to ensuring system integrity and data security.

As global digital transformation proceeds amidst the backdrop of COVID-19 health and safety issues, security will remain a critical underlying element in protecting our citizens in a burgeoning digital economy.