Microservices & Apps - What Are They and Why Do They Make Sense Economically

Author photo: Florian Güldner
ByFlorian Güldner
Industry Trends

What are Apps?

Apps are smaller pieces of software - significantly smaller than a traditional client-server architecture - that take care of a specific function. Apps do consist of micro services, which are unique to an individual cloud platform, such as Siemens' MindSphere, or GE's Predix.  Apps are assembled rather than programmed.

This means that an end user can select software functionality on a best-of-breed basis or by lowest cost apps, all running on the same cloud platform.  For an end user, the result is a more tailored and streamlined solution.

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What are Microservices?

Microservices are architectural IT patterns, describing complex application software composed of small programs / apps.  These small apps run in a cloud and are purchased as a service.  Microservices are:

  • Small
  • Decoupled from each other and independently deployable
  • Communicate with each other
  • Use lightweight technology-agnostic protocols

Microservices will be offered primarily by automation suppliers, but they also open the door for OEMs and EPCs to serve the market, as they sometimes require deeper application know-how and experience.  Micro services leverage big data analysis and artificial intelligence, which is where IBM’s Watson comes into play. Developer of apps and micro services use an application programming interface to access fundamental calculations for big data analysis, machine learning and artificial intelligence.  Providers offering micro services do not require any special know-how, instead they merely configure access to existing knowledge.  This simplicity is crucial for OEMs, which are often medium-sized companies with limited engineering resources.

Making Money with Apps

Making money with apps is tough - just think at the hundreds of apps on your smartphone and the few you actually pay for.  It means that suppliers of apps are competing not on software, but on applications and need to have much more know-how of the actual production.  Users can chose, depending on their needs, best of breed, lowest price and key features for each of these apps.  Users also have the option to not purchase an app at all, when they do not need a selected application.  This is fundamentally different from larger on-premise software, where a single “killer-function” in an MES, HMI, PAM, etc. may influence the purchase decision in favor of a supplier. 

This has three implications for suppliers:

  • the selectiveness of apps will be a factor that hinders growth
  • competition will change and increase. This will hinder market growth.
  • a customer differentiation on features is possible, this increases market growth.

The last factor is positive.  It shows that suppliers can sell an easy to scale-up solution to small and mid size companies and plants that may not be able to purchase a full on-premise software package.  It also means that suppliers can sell very high-price services to the top end of the market.

The following chart shows the simply supply and demand dynamics of this.  This customer differentiation is used today for hardware as well as software.  It does not only include features, but can also include differentiation by region, time, etc..  In the area of micro services, we are convinced that two criteria will be the most important:  quality and business model.

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Micro Services /Apps and Customer Differentiation

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