An interview with Mathias Wesselmann from Phoenix Contact

Dear Mathias, please tell us something about you and Phoenix Contact?

My name is Mathias Wesselmann and since the beginning of the year I have been Managing Director of the Phoenix Contact Smart Business GmbH, which is located at the Maschinenraum. The new Smart Business GmbH is a Software-as-a-Service (SaaS) provider that offers intelligent services based on IoT-enabled products from Phoenix Contact and other partners on our IoT platform 'Proficloud'. Phoenix Contact is a family-owned company founded in 1923, which offers components, systems and solutions in the field of electrical engineering, electronics and automation and is based in Blomberg, North Rhine-Westphalia. We are the global market and innovation leader in electrical engineering.

Why is the Mittelstand important for Germany?

The German Mittelstand is the powerhouse and backbone of the German economy and reflects the spectrum of German industry very well. By creating jobs, training young people and making investments, the German Mittelstand plays a key role in shaping the competitiveness of Germany. Last but not least, family-run companies can retain their innovative spirit and pragmatism thanks to their independence and equity, thus driving forward long-term innovation projects.

What we must also not forget is that we always talk about the Silicon Valley building platforms. Logically, however, these platforms are usually empty at the start because the operating systems and applications of the Internet of Things cannot be created in a vacuum of digital space, but need to be closely linked to industrial value creation – in other words, to things you can touch. This is where the great hour of the German Mittelstand could strike. Because we have the hardware that sends the data. This is a great advantage.

Where do medium-sized companies stand when it comes to innovation and digitalisation? What are their biggest challenges?

The Mittelstand is still in the early stages of digitalisation. The majority of the Mittelstand has understood what needs to be done now and that the digital transformation will lead to a shift in value chains and customer needs, but often the implementation is still stuck. The next step must therefore be to take the necessary measures and validate the first pilots. The biggest challenge here is that the German Mittelstand has not yet firmly anchored the topic of "digital" in their DNA. Often the processes, networks or skills required for digital, software-based products are missing.

In the future, the Mittelstand will also have to make much greater use of its own ecosystem in order to drive forward the transformation and, in the process, also think about working on new joint value chains. We at Phoenix Contact are blessed with people who have understood that the future must be about synergies and the digitalisation of the core business. We therefore feel very well equipped for our own digital transformation, which we have been consistently driving forward within the company for years. At the same time, however, we have also noticed that innovation in daily doing is very difficult because the necessary input from outside is often lacking and you need more freedom; a protected space for innovation. We have found this at the Maschinenraum where Phoenix Contact Smart Business has been at home for several months and is working on new projects.

Why is the Maschinenraum so important? How can it help?

Of course, we looked around for other, classic co-working spaces in advance, but then we quickly realized that we were not looking for a co-working space. The classic co-working spaces act like a kind of battery farm, everything is very self-sufficient and synergies are difficult to see. The Maschinenraum, on the other hand, has a clear focus on the German Mittelstand, and the network idea that underpins the machine room enables synergies among each other that are currently not possible anywhere else in this form. Medium-sized companies meet here at eye level and all work more or less on the same problems and can thus support each other in a protected space and trustfull environment.

The Maschinenraum is not only about the members on site, but also about the exchange on C-level. As a platform, the Maschinenraum enables us to have CFOs from different medium-sized companies, for example, exchange information about current developments at events. It is precisely this exchange that we need, because other perspectives allow us to constantly question and innovate. For us, the Maschinenraum is like a kind of seismograph of the Berlin ecosystem. Our digital unit on site is constantly receiving new information on certain trends and technological developments, which can then be transferred to our core organisation. We therefore maintain a lively exchange between our Smart Business Unit in Berlin and the parent company in Blomberg. After all, the ultimate goal must always be to digitalize the core business. This is our top priority and a clear prerequisite for every business unit.

What project are you implementing at the Maschinenraum?

The Phoenix Contact Smart Business Unit deals with cloud-based services based on the Internet of Things and enables users to provide an overview of the status of their application, independent of time and location. Using various algorithms for prediction, optimization and control, more efficient energy management can be operated, downtimes of systems can be reduced or the availability of systems can be increased. At the Maschinenraum, we are working on new technologies and services related to this area and would like to convert the requirements of our business units in the parent company into IT solutions. That's why we have 10 developers at the Maschinenraum and are working together with the experts on new solutions for our professional cloud.

The best thing about the Maschinenraum in one sentence?

The best from industry and start-up in one place.