ICL Services: Russian industry IoT market is our priority

And what about players of Russian IoT market — how many are there, who are the best of them, what is the situation?

ILYA APPOLONOV: Totally there are about 20 players who work on Russian IoT market and are able to offer to Russian customers good quality products and services. Leaders of this market include "Lanit", "Softline". Among foreign players we can mention Microsoft — they have a great solution based on Azure, but because of a difficult international situation many enterprises don't even look at foreign products.

What can you say about a customer representing Russian industry? What is their attitude towards IoT solutions? Do they understand new opportunities?

ILYA APPOLONOV: Customer has a general idea that it is necessary to use all capabilities offered to business by new technologies, which are presented on the market and are discussed in business world and in the press, including capabilities of Internet of Things. But they don't understand which business processes would benefit from this new technology. Usually we get the most general kind of request: a customer needs Internet of Things to reduce expenses, optimize production processes, but doesn't give any particular KPI, which have to be improved. Consequently, we need to explain, that, for instance, we can reduce equipment downtime, decrease amounts of "unfinished" production, etc.

So you consult customer on a preliminary stage of a project?

ILYA APPOLONOV: Yes, and as far as our company has been working with industry enterprises for more than 20 years, we have a great competitive advantage — we can speak with a customer on common language and provide simple definitions for them to understand how we can improve their life.

How do Russian enterprises appear as potential customers of industry Internet? How does your customer look like?

ILYA APPOLONOV: Our customer is an industry enterprise with annual turnover more than 1B rubles, having sufficient fleet of CNC machines. Or this is an enterprise looking to modernize its production infrastructure, migrate to a new equipment, more than 50% of which has electronic control groups or can be provided with them.

Could you tell us about R&D of IoT? When was it created in the company? What are major tasks of this group?

ILYA APPOLONOV: The group was created in July 2016. Its main task was to understand, on which segment of market our company would be able to develop in Internet of Things, properly position ourselves on this market, choose partners to work on IoT-projects with. Among others we had a task to find out, how we can use IoT solutions for our services. For example, ICL Group has a department designing equipment, and IoT would help us monitor its usage.

What tasks did you solve in these two years?

ILYA APPOLONOV: In terms of positioning on the market we understood that we should focus on industry enterprises with annual turnover more than 1B rubles, as I mentioned before. In terms of industry fields we decided not to limit ourselves, we're planning to work in a wide range. Speaking about major partners in IoT, we have several of them: Microsoft is our long-standing partner. We implement their solutions in foreign companies and in enterprises which don't depend on sanctions, as well as for integration of Russian partners' solutions, which we use on Russian market.

Does ICL Services develop its own IoT solutions?

ILYA APPOLONOV: We had a task to develop our own skills not only to resell licenses or provide system integration services, but also to offer quality support, which we would sell to the customer. In order to do this we had to start to develop technical skills in Internet of Things field inside of our company. As a partner of Signum we had such opportunity — we were able to develop our own IoT products. To benefit from this opportunity we provided a convenient climate control for our internal department, which provides 24/7 service support for our clients. The project is on pilot stage, it's being tested in one facility with limited amount of devices. According to our estimates, there are no similar solutions on the market.

On your web-site we found two pilot IoT-projects. When did they start? What goal do they have? What is their current state?

ILYA APPOLONOV: The first of them is our internal IoT project on monitoring working environment in technical support department, launched to pilot about half a year ago — we already mentioned it. The second one is also on a pilot stage — it optimizes self-checkout terminals for selling limited goods — temporary items or products for adults, such as cigarettes and alcohol. As part of this project we installed on a self-checkout terminal a module for age recognition, using algorithms of computer vision.

Let's get back to general issues of Russian IoT market development. How did import substitution policy influence it?

ILYA APPOLONOV: It had a huge influence. As you know, majority of industry enterprises in Russia are government owned, or have a public type of ownership. It means that with sanctions and import substitution policy almost entire segment turned to Russian solutions. This caused a new wave of Russian players. Import substitution allowed Russian developers to easily provide their products to enterprises, especially in defense sector, improving their competencies and growth rates.

What are your goals in the short term? And what about long-term?

ILYA APPOLONOV: In the short term we need to look for customers, to which we could offer our services in Internet of Things. For now we are going to primarily sell licenses and provide technical support of integrated IoT solutions based on Winnum. This is caused by a low demand on customized IoT solutions — this is a long term goal.

Will your company offer solutions or technical support based on IoT-technologies by Microsoft?

ILYA APPOLONOV: Currently we focus on solutions by Russian partners. Also we maintain contact with Microsoft, but look for the best balance in terms of "functionality — cost". It's still not viable to launch on a foreign market — we don't have enough personnel for this. So Russian industry IoT market is our priority. Here we will try to grow, and when we will have sufficient resources — both human and financial — we will turn to foreign markets.