Relatively little publicized, the place of GAFAM in the industry of the future is already significant. Building on their strengths, these U.S. technology leaders have turned it into a strategic diversification strategy. At the risk of one day causing their dismantling for abuse of dominant position?
The observation is widely shared: the industry of the future – or industry 4.0 – will be the key to the competitiveness of tomorrow. This concept covers the rapid digitization of production tools, which takes place before our eyes, on a forced march. Clearly, the factory of the future performing will be the one that, by combining services and automation throughout the value chain, will master massive data management, distribution channels and all-round interconnection.
But who will be the masters? We think primarily of the traditional industrial partners of large industrial firms, the best placed, a priori, to deploy and accompany their customers towards this inevitable transformation driven by digital.
Nothing is less certain. Because if we think of big data, the applications of tomorrow driven by artificial intelligence, the networks of connected objects, the eyes begin to turn to the… GAFAM (Google, Amazon, Facebook, Apple and Microsoft), which are already well ahead in these areas. With technological resources and almost limitless financial power.
Therefore, it is tempting to look at their initiatives and their already acquired positions which, in order not to be as visible as those directly related to the Internet, are nevertheless already impressive.
For Google, Cloud Cloud CEO Thomas Kurian recently unveiled a strategy based on the systematic use of artificial intelligence to develop solutions for the industrial world. “We are not looking to replace existing logistics, supply chain or ERP solutions for which heavy investments have already been made, but to use our AI technologies to extract data much smarter solutions than existing ones,” he said. Using the example of existing customers such as brewer AB InBev, which uses Google Cloud’s iA to optimize its beer filtration processes. Or UPS managed, thanks to the same technologies, to reorganize in a few minutes a delivery fleet when a vehicle breaks down, whereas it used to take several hours. The new CEO of Google Cloud assures that the californian firm’s cloud solution is gaining market share because it knows how to integrate Google’s global expertise in artificial intelligence not only in its commercial offering but also Big Data from Machine Learning or even Analytics.
Considered one of the world’s leading cloud computing drivers, with the AWS offering, Amazon is also making strong progress in the 4.0 industry market. “The industry is still collecting only a small amount of data that it could use to make production units more efficient,” Amazon’s CTO Werner Vogels said recently. And of course he gives as an example his own organization, such as fully automated control centers, to show the way forward, pointing out that an increasing number of industrial companies are moving away from internal servers to using the cloud Computing and related integrated management services.
In fact, last March, Volkswagen announced that it was choosing Amazon Web Services to collect real-time data from the automotive group’s 122 global plants. Expected improvements include better analysis of market forecasts and trends, while Amazon’s Machine Learning tools will help optimize plant equipment. In the long term, AWS is expected to enable VW to manage more than 30,000 sites and 1,500 suppliers and partners worldwide.
Dismantling or not?
A little more unexpected is the role that Apple also plays in the evolution towards industry 4.0. In 2017, the inventor of the iPhone entered into a global agreement with General Electric (GE) to develop new industry applications for GE’s IoT platform in Apple’s IOS environment. An alliance that goes far beyond the borders of the American industrial group since it has an impact on all its customers, whether in energy, chemistry or automotive. Apple has also entered into equivalent agreements with Cisco in the retail sector and with IBM (Mobile First for IOS), which is in application in several industrial sectors. The Apple-based firm has also allied itself with several enterprise software and service specialists, such as Salesforce and Accenture. As a result, the world’s most discreetly, thousands of proprietary applications are now operational among some of the world’s largest industrial companies. As Apple is also a specialist in big data, artificial intelligence and cloud computing, its diversification efforts in Industry 4.0 are far from complete.
Finally, contributions from Facebook and Microsoft (the latest letters of the acronym GAFAM) can also be mentioned, although they seem to have less impact, for now. The first relies on Nokia (acquired in 2013) to combine a cloud computing platform, Azure, which is an undeniable global success, with 5G communications services developed by the communications firm. BT, the UK telecoms operator, announced at the end of 2019 that it would be among the first users of such a platform.
For its part, Facebook focuses mainly on open source tools to accelerate the use of big data. Mark Zuckerberg’s firm is also heavily involved in artificial intelligence, particularly in optimizing corporate data, including industry.
In total, while the efforts and positions of these different players are still relatively unseen, they have clearly decided to make it an important diversification axis for their future growth. How far will they go?
The market may not be the only justice of the peace. The new European Commissioner, Thierry Breton, while still PD-G of the ATos IT group, believed that GAFAM, capturing more and more value, would not escape one day to a stronger regulation than today. Without ruling out the spectre of dismantling, due to the creation of rents of situation falling under the American law against the abuse of dominant position.
From this point of view, however, the nearest example, which dates back to the 1990s, does not encourage optimism. While the U.S. Department of Justice sued Microsoft for such acts, the lawsuit ultimately resulted in only a measure restricting the publisher’s monopoly power, now prohibiting PC manufacturers from denying access to other operating systems than Windows. A half-measure that has only paid off – that is, limiting Microsoft’s omnipotence, thanks to the gradual decline of the PC…
Could the U.S. government one day be more aggressive towards GAFAM? Would Europe have equivalent means of coercion? Or, on the contrary, will the inevitable rise of Chinese actors equivalent to GAFAM dampen the ardour of Western governments?