Electronics, Software & Telecom

Festo is Making the Smart Factory a Reality with Magento Commerce 2

When the German-based manufacturer Festo needed a new eCommerce platform, they turned to Magento and in just eight months launched a totally new online business, creating a valuable new revenue stream.
Process Automation
€3.1 Billion Euro Turnover
300,000 Worldwide B2B Customers
8 Months to Launch a New Digital Business

The smart factory giant needed a revolutionary eCommerce platform.

Unless you’re an expert in pneumatic and electrical automation technologies, you might not recognize the name Festo. But in the world of smart factories, the German-based company is a colossus, with 20,100 employees, 250 global subsidiaries, and 300,000 customers in 176 countries. Each year, Festo produces a formidable turnover of €3.1 Billion ($3.6 Billion). Established in 1925, the independent, family-run company creates the innovative technologies that automate modern factories, transforming the way people work—and how companies compete.

Pneumatics

But factories are in the midst of what Forbes has called the ‘Fourth Industrial Revolution’ or ‘Industry 4.0.’ Today, advanced cyber-physical technologies such as artificial intelligence, robotics, machine learning, and the Internet of Things (IoT) are making factory automation more intelligent—and it’s all powered by software. Festo already excelled at selling their physical plant components, but they needed a new process to distribute their digital products and services. After carefully comparing fully automated digital sales platforms, Festo chose the solution that matched their futuristic ambitions: Magento Commerce.

Magento was the right solution according to our digital business requirements.

Patrick Deuscher
Head of IT Demand Mgmt. Sales Processing, Festo AG & Co. KG

A digital sales platform for a futuristic industry.

One of Festo’s main KPIs was a fast time-to-market. In February of 2017 they instructed their Magento Enterprise Solution Partner, PHOENIX MEDIA, to create a prototype in time for the Hanover Fair, one of the world’s largest trade fairs. It was just two months away. By unveiling a beta platform at Hanover, Festo planned to gather valuable feedback from the fair’s automation-focused audience.

Electric Automation

PHOENIX MEDIA wasted no time in building “Festo App World,” a revolutionary new sales platform to spearhead Festo’s digital strategy. Based on Magento Commerce 2, the portal allows customers to purchase apps, cloud products, and other software libraries directly online, before downloading them using a unique 11-character alphanumeric Product Key code. With customers in 176 countries, legal compliance would play a critical role in rolling out Festo App World. With Magento Commerce, multi-store capability enabled Festo to easily operate various country-specific platforms with different languages, currencies, and tax rates, while meeting local requirements. With one Magento instance and one central admin, technical and administrative oversight is easy.

Now, during a construction project, factory engineers can easily extend the functions of their components by themselves, by downloading and implementing new software. Festo’s smart components use IoT gateways to report system states directly to the cloud, while condition monitoring helps plant operators quickly visualize and analyze performance data through customized dashboards. With the latest IoT products, factories can improve their productivity within minutes, instead of days or months.

A truly global platform, with 300,000 customers.

In April of 2017, after just six weeks of development, Festo launched their first prototype on Magento Commerce 2, just in time for the Hanover Fair. With the valuable feedback captured at that event, they had launched Festo App World in 20 countries by the Fall of 2017.

Process Automation

Thanks to the flexibility and the fast time-to-market of Magento Commerce, Festo built a new digital business in less than eight months. Today, Festo’s SAP processes, web services, and license management are all integrated into Magento Commerce by an Enterprise Service Bus (ESB). This integration into Festo’s existing operating processes was quick and easy, allowing the company to adjust purchasing conditions for individual buyers and customer groups, industries, or sales volumes. Festo’s 250 global subsidiaries also benefit from an automated internal invoicing process.

After their successful launch on Magento Commerce, Festo’s sales of software subscriptions quickly became a valuable new revenue stream, which is an incredible achievement for an old school industry once focused on selling mechanical equipment.

By launching this new business model, Festo is for the first time generating recurring revenues on their digital products, an exciting prospect for a company at the cutting edge of automation technology.