by Gary Mintchell | Dec 31, 2013 | Internet of Things, News, Operations Management, Organizations
Russ Fadel, ThingWorx President
Updated 1/7/13–Updated ThingWorx information including John Richardson as a co-founder. Missed that the first time around
PTC (Nasdaq: PTC) announced Dec. 30, 2013 it has acquired ThingWorx, creators of an award-winning platform for building and running applications for the Internet of Things (IoT), for approximately $112 million, plus a possible earn-out of up to $18 million. According to the company, the acquisition of ThingWorx positions PTC as a major player in the emerging Internet of Things era.
The spiritual seekers of manufacturing have sought for the nirvana of connected products talking back to their creators. This nirvana would enable improved product development through better information of the product in use. It would also enable a profitable service business where the creator could foretell problems and contact the customer to fix it.
Hugely significant
The first iteration was Machine-to-Machine (M2M) where OEMs could work with their machines at customer plants. This acquisition of ThingWorx by PTC is hugely significant because it extends the vision to the next iteration–products in general connected by the Internet of Things.
Rick Bullotta, ThingWorx CTO
ThingWorx co-founders Russell Fadel, Rick Bullotta, and John Richardson are serial entrepreneurs who earlier found success with Lighthammer, also a connectivity company, which they sold to SAP. That technology became key to SAP’s ability to move data from manufacturing systems to enterprise systems.
PTC notes that the ThingWorx acquisition extends its strategy by accelerating its ability to support manufacturers seeking competitive advantage as they create and service smart, connected products. As part of PTC, ThingWorx will continue to help customers in a wide range of industries seeking to leverage the IoT, including telecommunications, utilities, medical devices, agriculture, and transportation, as well as an emerging partner network of IoT-enabled service providers.
John Richardson, Co-Founder and COO
According to a recent research report “Disruptive technologies: Advances that will transform life, business, and the global economy” (May, 2013) from the McKinsey Global Institute, the Internet of Things has the potential to create economic impact of $2.7 trillion to $6.2 trillion annually by 2025. The firm believes perhaps 80 to 100 percent of all manufacturing could be using Internet of Things applications by then, leading to potential economic impact of $900 billion to $2.3 trillion, largely from productivity gains. For example, with increasingly sophisticated Internet of Things technologies becoming available, companies can not only track the flow of products or keep track of physical assets, but they can also manage the performance of individual machines and systems.
Better product development
In the IoT era, PTC’s customers are bringing to market increasingly smart and connected products which can generate value in new ways as streams of real-time operational data are captured, analyzed, and shared to deepen a company’s understanding of its products’ performance, use, and reliability. PTC will use the ThingWorx platform to speed the creation of high value IoT applications that support manufacturers’ service strategies, such as predictive maintenance and system monitoring, in complement to PTC’s existing service lifecycle management (SLM) and extended product lifecycle management (PLM) solution portfolio. With ThingWorx, PTC will also now offer its customers a means to establish a secure, reliable connection to their products as well as a platform to rapidly develop applications for maintaining and operating them – and ultimately for finding ways to create new value from them.
“All aspects of our strategy to date have centered on helping manufacturing companies transform how they create and service smart, connected products,” said PTC president and CEO Jim Heppelmann. “For manufacturers today, it is clear to us that improved service strategies and service delivery is the near-term ‘killer app’ for the Internet of Things and this opportunity has guided our strategy for some time. With this acquisition, PTC now possesses an innovation platform that will allow us to accelerate how we help our customers capitalize on the market opportunity that the IoT presents.”
The opportunity, however, goes well beyond this immediate pragmatic application. Industries of all types are poised to see disruption from the Internet of Things and the expanding networks of connected sensors and devices, and a growing ecosystem of ThingWorx partners is forming to capitalize on this growth. As part of PTC, ThingWorx intends to continue serving this diverse market with senior management continuing to focus on its current path.
“At ThingWorx, we share PTC’s vision for helping organizations fundamentally leverage the connected world,” said Russell Fadel, CEO and co-founder, ThingWorx. “We believe all industries, but especially manufacturing, will be transformed in the Internet of Things era. We are excited to pursue this broad set of opportunities with the resources and proven solution portfolio that PTC provides.”
The acquisition is expected to add more than $10 million of revenue over the next 12 months, with $5 million to $7 million of revenue in FY’14. As a result of cost synergies and investment plans for ThingWorx, PTC still expects FY’14 non-GAAP EPS of $2.00 to $2.10. PTC drew $110 million from its credit facility to finance the transaction.
by Gary Mintchell | Dec 30, 2013 | Commentary, News, Operations Management
Once again there appeared a newspaper article about manufacturing output resurgence without an accompanying increase in manufacturing employment.
When was it that journalists stopped being overtly opinionated or merely reporters and started trying to write about things of which they have no knowledge but in which they decide to slip in opinions through the back door, as it were?
Granted, the writer wasn’t overtly talking about “Lean Manufacturing” as in derivatives of the Toyota Production System. The article only through out a sentence of opinion presented as fact that manufacturers were “lean,” as if that were bad.
My first nine years in manufacturing were spent in a great learning environment. I learned many manufacturing techniques. I tried to be “just in time” long before the term was popular (we called it maximizing inventory turns). We did many Lean manufacturing things before there was an official Lean.
Drive for productivity
The discipline of effective cost control was drilled into me early on, and it remains. (I cringe at the lack of cost control in my church today, to be honest.) But we never just looked at cutting jobs just to cut jobs.
The mantra was, “If you cut a dollar of material, we save that on every product. If you reduce labor content by an hour, we really don’t know that the company saved anything in the big scheme of things.” You look at details and think in the big picture.
Lean misunderstood
The first principle is that Lean manufacturing does not mean getting rid of people. The first principle is respect for people. If I could get journalists to try to understand anything when writing about manufacturing, that would be the one thing.
The next principle is that productivity drives the country’s growth in wealth. Productivity is producing more efficiently and effectively. Granted that there are short-sighted executives who think they can cut to prosperity. They ignore facts that that never happens. There exist many mature managers (I have personally visited with quite a few) who are doing the right things right.
Growth in employment comes from doing more things, not in just adding people to do the same things. One of the problems with manufacturing employment in the US has been knee-jerk sending jobs offshore. But that fad is over. Executives now see all the costs this strategy and have brought many jobs back.
However, we have also discovered that it makes a lot of sense to manufacture products geographically closer to the market. This creates a huge dispersion of jobs, which will in turn lead to growing global middle class. This in turn will be a stabilizing force for global politics. There is much reason for optimism for the future.
Solutions
That writer could add to overall employment by taking those writing skills, develop a focal point, and start a small Web-based media site to cover a topic. Then hire a few people.
Growth in manufacturing jobs occurs mostly when someone develops a new product that meets a social need and then builds a plant to produce that product. She or he will hire engineers, operators, maintenance people, accountants, and so on.
We need more Elan Musks!
by Gary Mintchell | Dec 28, 2013 | Leadership
My introduction to To-Do Lists for personal productivity came probably 30 years ago while listening to Earl Nightengale. He told a story of the consultant who was hired by the CEO of a huge steel company many years ago to help him be more effective and get things done.
The consultant told the CEO to make a list of important tasks that must be done. Choose the most important one and work on it until it was completed. Cross it off the list and work on the next one.
One of the key practices of David Allen’s “Getting Things Done” is lists.
I use Nozbe to record all the ideas I have that will require a task to get done. It then generates lists. My challenge right now is to pick the 4-5 most important ones and make a daily list. Looking over a list of 63 items can be quite disheartening.
Recently, David Allen posted a blog about the Amazing History of To-Do Lists. Ben Franklin to Johnny Cash. Interesting reading.
Lists have an ancient and honorable past. Umberto Eco, one of my favorite writers, even has written a book on lists–The Infinity of Lists.
We are approaching New Year’s Day and I’m sure all of you will be making a list of your New Year’s Resolutions (actually, I hope not). But if you are thinking about having a more effective 2014 than 2013, then consider how you use lists.
by Gary Mintchell | Dec 23, 2013 | Automation, Data Management, Operations Management, Technology
The TED Talks began as exclusive talks about “Ideas Worth Spreading” that attendees paid 5-figure fees to attend. Talks must be less than 20 minutes, and in many cases around 10 minutes. Growing from one location that met annually, the franchise has spread across the globe and now there are thousands.
Industry, or manufacturing, seldom is a topic. So when I heard this one from the chief economist of GE, I thought it was worth sharing. The official TED blurb is below, but understand that “Industrial Internet” is GE’s pet term for the Internet of Things. This is a growing trend that will be significant in industry. But reading the comments on the TED page reveals how much more education we in the field need to provide to the general population.
Everyone’s talking about the “Internet of Things,” but what exactly does that mean for our future? In this thoughtful talk, economist Marco Annunziata looks at how technology is transforming the industrial sector, creating machines that can see, feel, sense and react — so they can be operated far more efficiently. Think: airplane parts that send an alert when they need to be serviced, or wind turbines that communicate with one another to generate more electricity. It’s a future with exciting implications for us all.
by Gary Mintchell | Dec 20, 2013 | Commentary, Leadership, News
I have not been shirking this site on purpose. I can’t believe it’s been so long since I wrote a post. But I’m preparing for a new push in the new year.
Way too many all-day meetings the past two-plus weeks. My last post was about the Industry Advisory Board meeting of the Center for Intelligent Maintenance Systems. That university/industry center has been doing some outstanding research over the past 12 years or so. It has also grown in coverage and technology.
Just go down one post on the home page and note how some of Prof. Lee’s ideas about where the Center should go mesh with many of the industrial trends I’ve seen unfolding lately–cloud, mobile, analytics, sensors, intelligence everywhere, and so forth.
Then a trip to Barrington, IL (my new business home) to meet with the staff of Applied Technology Publications. We have much work done and much more to go to give both Maintenance Technology magazine and the MARTS conference a fresh look, approach, coverage. I want to take these properties into the new areas I’ve seen emerging in industry that no one is covering–and actually can cover.
We’ll do not only classic reliability and predictive maintenance (some of which includes software, control, instrumentation, automation), but we’ll place all that in the context of overall asset performance. We’re not talking merely uptime or engineering or services. It’s all about how the plant management team (as well as corporate management) can optimize operational excellence and the technologies and services that support that effort.
Then two days with the MIMOSA annual meeting along with discussions about physical asset lifecycle management. This includes the Oil and Gas Interoperability pilot demo that proved live data can move automatically from design to operations & maintenance (and back). This is very important work for the working lives of the plant management team assuring that everyone has the most current and accurate data possible.
From there I devoted a day to a meeting of the Smart Manufacturing Leadership Coalition. These are important discussions (more later) designed to move US manufacturing past the merely “digital” manufacturing of Germany’s Industry 4.0 into discussions of workflow, among other things.
Meanwhile, I started this blog with the idea of covering a heretofore not-covered space anticipating some partnerships. Those partnerships did not materialize (surprise), and the space really resists coverage. As 2015 dawns, you’ll see a broader emphasis on all aspects of manufacturing technology here. With a little advertising support, I’ll begin hiring a little part-time help to get more coverage. I’ve already made one hire. More to come.
I will be at the ARC Forum in Orlando in February. Looking forward to seeing everyone there.
