Wistron's next twenty years; Internet, and Startups: Interview with Wistron vice chairman Robert Huang
Taiwan's tech giant Wistron Group started digital transformation early and made big progress. Vice chairman Robert Huang taught us how he pushes Wistron to plan for the next twenty years.
As one of Taiwan's biggest electronic manufacturers, Wistron contributed a large portion of the economy for Taiwan in 20 years since they spun-off from Acer in 2001. But as the gross margin for manufacturing hardware is becoming lower and lower, people have started wondering what's the next growth momentum for the top hardware manufacturers like Wistron.
"We started thinking which industry would thrive and become important in the future. The answer came to the internet business," said Robert Huang.
But Wistron has been focusing deeply on manufacturing hardware, how did they start learning to do the internet? Robert Huang mentioned that the key is learning the startup spirits.
For seeking deeper cooperation with the startup ecosystem, Wistron formed the New Business Development Innovation Integration Center(IIC), which provides a full range of commercialized services including product development, integration of IoT sensing applications, product manufacturing, and assisting in business transferring. Relying on Wistron's electronic manufacturing expertise, IIC effectively helps startups bridge the gap between concept and manufacturing, as well as commercialization.
Gathering experienced talents from Wistron's several business units, IIC's members know very well about how to leverage resources from manufacturing department, product design team, to verification services to help startups building their prototype or marketing their products. "We target the innovative smart applications that can form an ecosystem in the future. For example, we help a coffee company build a series of SMART coffee equipment that not only can connect to the internet, but also apply lots of internet features in it." Chief of Innovation Integration Center Elton Fang said.
Although IIC is a business unit in the Wistron, they have different KPIs compare to Wistron. "In the traditional manufacturer thinking, the company evaluates the performance of departments by how much profits they make, but innovation business can not be valued this way. We evaluate IIC's KPIs by how many deals they accomplished, and how many cases they help to commercialize, not by how much money IIC make," said Robert Huang.
Wistron group has been budgeting 10 percent of R&D expenditure every year to invest in startups that relate to Wistron's business for the past several years. Furthermore, Wistron would provide their manufacturing power and their global marketing network to assist startups to success.
For example, Wistron led a $15 million Series B round of funding for AI startup iKala. iKala provides AI-driven services and solutions to accelerate digital transformation, and already has 4 hundred enterprise customers and expanded the business to overseas markets like Japan, Singapore, Hong Kong, Philippines, and Thailand. "Wistron expects to team up with iKala to provide hardware and software integrated solutions to customers," said Robert Huang.
Besides investing in startups, Wistron themself also set up a digital transformation office 5 years ago, not only pushing them to embrace the new technology but also cultivate data science and analysis talents. Furthermore, Wistron established a subsidiary company called WiAdvance, which provides public cloud and hybrid cloud digital transformation solutions.
"When we tried to implement digital transformation internally, we spent enormous effort as well as budget on it, but this also made us wonder that although we have lots of resources to invest in digital transformation, what about small and medium enterprises? There is no chance they can afford this burden. For helping enterprises doing digital transformation efficiently and lowering the cost, we founded WiAdvance, and I can confidently say that WiAdvance will be one of Wistron's cash cows in the future," Robert Huang mentioned.
Centered around the internet, Wistron established several subsidiary companies in different sectors in early times and is reaping the rewards.
With the Covid-19 ravages the world, people prefer to stay home for learning, and this results in the booming of online learning. But actually, Wistron foresees the online learning demand five years ago and establish TibaMe. TibaMe focuses on teaching the most advanced skills like AI, and big data. Their goal is to help the learners quickly onboard the tech jobs.
The medical area is also the next high growth business, and surely Wistron established Wistron Medical Technology five years ago, hoping to combined Wistron’s manufacturing expertise with medical, and this vision payback. Wistron Medical Technology soon became a million dollars business.
"All our new business will not be only aimed at Taiwan, but also always try to access Southeast Asia, even think of going to the global market. Comparing to building a factory, landing on the overseas market by providing internet services is much easier," Robert Huang told.
