Interview / Jeong Jun-gyo, President of Advantech Korea

We have been focusing on strengthening our IoT software competitiveness for several years.
Strengthening differentiation with prepared software such as WisePass and EIS

"We've been developing hardware platforms for over 30 years. For the past five or six years, we've been developing a number of IoT-related software solutions. While not yet fully operational, we've now been able to provide a unified service combining powerful hardware and software."

This is Advantech's strength, as revealed by Jeong Jun-gyo, President of Advantech Korea . He also mentioned its weakness as a "hardware company." He noted that customers still lack the perception of Advantech as a software company. We asked about Advantech's strategy for moving toward becoming a "company that combines robust hardware with software solutions."

Advantech's business structure has been reorganized around IoT. Embedded-IoT, Industrial-IoT, Service-IoT, and Allied DMS are shaping markets and developing solutions in each field.

The primary customers of the software solution, as revealed by President Jeong, are System Integrators (SIs). Sensor Block's Edge Intelligence Servers (EISs) upload data directly to the cloud or purify unnecessary data. Regarding the first block phase, Advantech stated that it has reached a world-class level and is providing EIS to leading OEM and ODM companies.

▲At the cloud level, the WISEPaas market provides HMI/SCADA, network management, and security management required for websites linked with third parties, and ▲at the level above, the solution ready platform (SRP) required by software developers in various fields such as smart factories, smart cities, and energy environments can be used to configure the final IoT application.

"Don't you just pick and choose the products you need from the iPhone App Store? The ultimate goal is to instill the perception that IoT and Industry 4.0 are easy to use and don't require a lot of investment. While the platforms you choose will need to be optimized for your specific needs, this will provide developers with opportunities to save money and time."
In particular, Advantech is building partnerships in various forms. Among them, the WisePath Alliance involves a customer inquiry, where Advantech's marketing and sales staff visit partners with expertise in areas like energy and building automation for meetings. Once the project is underway, the partner provides a solution, and Advantech supplies the hardware or software. It is a structure that the alliance completes together.

"When you go out into the field, you don't find many IT or automation experts. The vagueness of the situation makes them fear failure. Costs are a crucial factor, so I've been thinking about ways to reduce the burden. First, I advise CEOs and executives, 'Don't think of it as the cost of building a smart factory; think of it as a cost to improve production and manufacturing efficiency. Also, equipment typically costs between 500 million and 1 billion won, so invest just 1% of that first.'"

Invest just 1% of your equipment costs to improve production and manufacturing efficiency.

If investments are made in each sector, trends can be identified to determine when breakdowns occur, and expansion into adjacent areas and ultimately the entire factory can be implemented, creating a "smart factory." Advantech is promoting a step-by-step approach, from basic automation to data acquisition, process visualization, and big data decision-making, through university seminars and local small business manufacturing associations. From this perspective, how does Advantech view Korea's Industry 4.0 response ?

"The social climate is ready. However, implementation appears to be problematic. Korea has a smart factory association, but government subsidies are limited. Furthermore, companies lack the resources to do so on their own, which is the biggest gap. When I talk to branch managers in other countries like China and Japan, I find that their governments and government agencies are proactively engaging in practical projects."

President Jeong continues to believe that investments in IoT will definitely pay off, but he doesn't expect to see immediate sales or profits. While the company is investing in the recognition that it needs to prepare for the future, it said most of its revenue comes from its hardware platform.

"This isn't just Advantech's problem. The software industry is about investing in the future. The first step toward generating revenue is how actively you build and nurture relationships with partners."

As previously mentioned, Advantech is building an IoT ecosystem by partnering with Intel, ARM, and TI for embedded systems, Intel and Microsoft for software, and Bosch and TI for sensors. Furthermore, to address the lack of machine-to-machine (M2M) connectivity when things are connected, Advantech acquired B+B Smartworks in 2016 and is now developing communication equipment.

In the software sector, each branch operates a partnership program. Partnerships with major domestic SIs exclude overlapping areas of similar software, while cross-collaboration is being conducted in non-overlapping areas.
Korean market plans to strengthen its technological capabilities

“The LTE-M-based IoT solution announced with KT this year is an example of cross-collaboration,” said Miller Chang, President of Embedded IoT . He said, "We will respect each other's traditional businesses and form partnerships." Furthermore, Global Advantech plans to expand its investments in large markets like China and the US to deepen its involvement in these regions, while strengthening its technological capabilities in Japan and Korea. President Miller stated, "Korea, in particular, has strengths in three hardware areas: smart farms, self-fueling stations, and medicine, and we anticipate the IoT expansion into these areas."

Finally, when asked about Advantech's future direction, President Jeong introduced the company's founding philosophy, the "Tree of Altruism." He likened it to a tree bearing fruit, and then seeds taking root, with employees, partners, and shareholders nurturing the tree. "When the fruit is born, you can enjoy the fruits of that fruit. Advantech has created the seed of software, and our ultimate goal is for this seed to take root and even be exported."