You are Élodie Vasseur, Chief Strategy Officer of Veridian Systems, an industrial sensor maker in Lyon. A German rival has just unveiled at Hannover a service that gives the sensor away and charges for the analytics. The board gives you 120 days, and the first question is where Veridian really makes its money.
The situation
Monday 9 March 2026. The product sheet the rival handed out overnight describes PlantSense AI: a cheap sensor plus a cloud analytics subscription at €90 per machine per month, with no margin on the hardware. It looks very like the platform your research centre designed over fourteen months and the board deferred twice. You sponsored that project.
Veridian takes €280 million at a 12% operating margin and employs 940 people, 110 in research. About 70% of revenue comes from selling sensors once, at a 41% gross margin that finance sees falling toward 22% within two years. Your sensors already stream vibration, temperature and wear data from about 25,000 machines across Europe; Veridian has never turned it into a product, and the subscription that could be sold on that base is worth about €45 million a year.
You hold three patents, all on hardware; the analytics models have none, and your team believes a competitor could copy them in six to nine months. The rival claims a nine-to-twelve-month head start and outspends you six to one on marketing. Two pilot customers have paused their next order, and four of your ten largest accounts, 28% of revenue, could sign exclusive deals with it. The board chair is already asking by phone what stops PlantSense from taking the business.