by Gary Mintchell | Mar 5, 2018 | Operations Management, Software
Calling the action “transformational”, AVEVA completed the incorporation of Schneider Electric Software (Wonderware, Avantis, and so forth) proclaiming “a new software leader is born.” Of course, now the hard part starts. How do they get all these different parts to work together? How do they transform a culture that underwent the shocks of Invensys into the bureaucracy of Schneider Electric into this new company? Or, do they?
“88% of leaders in capital-intensive industries say that digitalisation would increase their revenues*”, said Craig Hayman, Chief Executive Officer at AVEVA. “Yet less than half of these companies are actually in the process of adopting a digital strategy. This represents an incredible opportunity for AVEVA to be our customer’s digital transformation partner.”
“Digitalisation demands a fundamental rethink of the way organisations operate. They need to be confident that their technology investment will deliver a high return on capital and can lower the total cost of asset ownership. AVEVA’s combination of proven solutions, industry-specific knowledge and a global partner ecosystem will drive innovation across capital-intensive industries, as companies plan their digital transformation journey,” Mr Hayman added.
The combination brings together AVEVA’s design, engineering and construction capabilities with Schneider Electric’s industrial software business, which ranges from simulation through to real-time manufacturing operations management. It creates a global leader in engineering and industrial software, expanding the markets and industries the company serves. Customers can benefit from improved profitability, efficiency and performance.
The net effect is to move AVEVA into direct competition with parts of Siemens and its digitalization strategy following the acquisition of UGS some years ago. Does this mean that there might be an AVEVA Mindsphere on the horizon? We’ll see.
by Gary Mintchell | Feb 1, 2018 | News, Software
The industrial software market seems to be undergoing quite a consolidation right now. I’m not entirely sure what that means. There are a couple of underlying factors but slowing growth of the market is often one. Another is that larger companies usually find it more expedient to innovate through acquisition. A portfolio manager or CEO can see what is working in the market and see gaps in their own offerings. Then it’s simply a matter of negotiation.
I don’t know Aras as well as I know many other companies, but interesting that I finally wrote about its digital twin and digital thread strategy this week and then comes the announcement of its acquisition of the Impresa Maintenance, Repair, and Overhaul (MRO) business from Infospectrum.
Aras states it gains a suite of complementary MRO capabilities to help Manufacturers and Owner-Operators digitally transform development and maintenance of complex products. With the Impresa acquisition, Aras will deliver PLM and MRO on a single platform that extends the Digital Thread to the field and provides the foundation for Digital Twin.
The Aras Impresa MRO software will be available as part of Aras enterprise subscriptions and is immediately available at no charge for current Aras subscribers.
As the justification for the acquisition, Aras says, “To stay ahead of competition, manufacturers must continuously innovate next-generation products and offer the flexibility of capacity-as-a-service offerings. As a result, they need to transform how they develop products and plan to service them in the field. Connecting their PLM to MRO gives these companies a path to achieve both goals with a closed loop between product development and field data.”
And further, “Adding PLM functionality enables Owner-Operators to bring product engineering to their maintenance practices. With a combined PLM and MRO solution, they gain the PLM capability necessary to manage designs, decisions, and part selection related to maintenance and service of their assets.”
Peter Schroer, Aras CEO, states, “Companies choose Aras as a digital transformation partner to modernize their most complex engineering and manufacturing processes today and for the future – and have been asking for an MRO application to extend their journey. With the acquisition of Impresa, we are adding a highly-talented team and proven solution to further expand our MRO capabilities and to be first to connect MRO to the Digital Thread on a single platform.”
As part of the transaction, Aras will acquire technology, intellectual property, and subject matter expertise. Aras plans to immediately begin incorporating the Impresa MRO technology onto the Aras PLM Platform to continue to deliver full product lifecycle traceability on a single platform and code base.
by Gary Mintchell | Jan 9, 2018 | Data Management, Software
I don’t really think about report tools that much, to be honest. Maybe because most people seem to default to Microsoft Excel to draw information from their operations information system.
Roy Kok has been VP of sales and marketing for Ocean Data Systems / Dream Report for some time now. He’s an industry veteran whom I’ve known for probably 20 years. We’ve had occasion to chat about his product several times over the past few months. So, I had to ask, just what do you do and what kind of market is there—really?
[Note: He’s a new sponsor of the site, trying us out for a while. I don’t actively go out and sell ads, but I certainly appreciate the companies that do—hint. I actually probed about the market before he decided to buy.]
I guess I never thought about a custom report writer in the same genre as dashboards and other visibility tools. I stand corrected.
Kok tells me, “I believe Dream Report to be the number one product of this type in the world. We are currently shipping in the thousands per year. As you can imagine, this is giving us great market penetration and visibility, but Dream Report is not a very expensive product, so our company is still relatively small at 18 employees. Dream Report is all that we do, so from that perspective, we are a significant scale for a single product company. I believe we hold 5% or so market share. 85% market share is held by business products being applied to industrial applications. These products include Crystal Reports, Microsoft SSRS and Excel. That would leave 10% for the plethora of other tools, vertical market solutions, and smaller competitors.”
Why did this market become so dominated by business tools? “One simple word – History,” added Kok. “In the late 80s and early 90s, HMI/SCADA was still in its infancy and competition was tremendous. Vendor focus was on reliability and capability of HMI/SCADA. There was another invention at that same time – ODBC – in the business world. ODBC was the way third party products could interact with databases of all types. Also in the late 80s, Crystal Reports came on the market and in the early 90s, Microsoft delivered SSRS (SQL Server Reporting Services). Excel was also available and leveraged ODBC. The result of all these developments was that HMI/SCADA vendors chose to enhance their products with ODBC and could thus leverage the variety of business tools on the market. That set the path for most of the industrial market. To be fair, some HMI/SCADA vendors dabbled in report generation, typically focused on connectivity too their own products.”
This becomes part of the IT / OT situation. Part of the continual divide between the organizations lies in the tools each use. Both thrive on information, but the type of information and its format is different between the two areas. Often business tools are much more expensive, since the cost can be spread over a much larger application framework. Kok posits that OT people have been hesitant to look at report applications from fear of cost and complexity. Therefore, the benefit of his product.
Adds Kok, “Our challenge is to re-educate the world that reports are easy to create and are actually your shortest path to continuous improvement. A report (or dashboard) can be fast and easy to create. It can then be scheduled for automatic generation and delivery. We argue that the step after installing a historian, should be the installation of a report and dashboard solution like Dream Report. Then, when KPIs go askew, you can use Dream Report analytics or other advanced tools to better understand the root cause. Dream Report can actually bridge the gap and help to justify advanced analytics like those from Seeq, Falkonry, TrendMiner, Tableau, Pentaho, and others.
And that, I think, is the next step forward—how to integrate advanced analytics into OT in a sensible and useful way. We keep talking about predictive maintenance. And have been for many years. Maybe that one really begins hitting. And we’ll watch for which application strikes next.
Ocean Data Systems has been growing organically since 2006. Major OEMs private labelling and reselling Dream Report include Schneider Electric, Wonderware, GE, Eurotherm, Indusoft.) Here is a short video.
by Gary Mintchell | Oct 17, 2017 | Operations Management, Software
Schneider Electric Software boosts Asset Performance, pricing model, and cloud offering. They called it a Schneider Electric Software Innovation Summit in San Antonio a couple of weeks ago. But as we know, that part of Schneider Electric is moving over to the new AVEVA which will be 60% owned by Schneider Electric. So, is this the last Schneider Electric Software summit, or will all the new company be absorbed at the conclusion of the buyout period?
I had committed to another conference by the time Schneider announced its software one, so I was not there. They did send news releases and I also talked with a friend who was there in order to gauge a little bit of what was happening. One other thing I find interesting. On the process automation side, they are clearly branding the legacy Foxboro name. On this side, not so much talk about Wonderware and Avantis. So I guess there is still some branding flux on the software side of the business.
Key takeaways: Schneider evidently saw a weakness in its asset performance management offering and has partnered with a European leader to add strength to it. Answering the challenge of a newer competitor regarding pricing for software, Schneider announced expansion of its subscription pricing model. The third larger announcement reflects the growing importance (and acceptance) of the Cloud for IT structure.
Short view of the news:
- Extends Enterprise APM Offering through New Partnership with MaxGrip: Schneider Electric has partnered with leader in Asset Performance Management (APM) software, MaxGrip, to deliver a more comprehensive asset lifecycle management offering. This expanded offering will include assessment services and risk-based maintenance capabilities, helping customers define and execute APM strategies for maximum return on assets.
- Extends Subscription Access Across Industrial Software Portfolio: Schneider Electric has expanded its subscription license model, enabling customers to purchase software licenses a la carte, providing greater value, new benefits and access to more industrial software applications than ever before. Subscription Access is now available when purchasing Engineering, Planning, Operations and Asset Performance, as well as Control and Information software solutions.
- Expands Cloud Platform with New Performance Module: Schneider Electric has announced the continued expansion of its Insight cloud platform, powered by Wonderware Online. The new Insight Performance Module provides Overall Equipment Effectiveness (OEE) monitoring, asset utilization analysis and downtime tracking in the cloud to enable operational efficiency improvement while reducing total cost of ownership.
- Enhances Manufacturing Operations Management Offering for Mining Industry: Schneider Electric announced enhancements to its Manufacturing Operations Management (MOM) solution for the Mining industry. By introducing real-time production accounting and inventory management, the enhanced solution will improve decision support, planning and reporting capabilities for mining companies, enabling them to meet their digital transformation goals.
- Powers Roy Hill’s Remote Operations Center to Drive Digital Strategy: Schneider Electric announced the success achieved at independent iron ore operation in Western Australia – Roy Hill. By implementing Schneider Electric’s Mining industry software solution, Roy Hill has been able to consolidate end-to-end operational visibility and optimize its mining value chain.
- Drives Digital Transformation in Food & Beverage with New Industry Solutions: Schneider Electric announced three new solutions – Energy Performance, Advanced Process Control and Label Assurance – all aimed at solving industry challenges from growing environmental and sustainability regulations, higher energy costs, consumer demands and product quality and safety standards. The solutions empower F&B manufacturers to simultaneously improve efficiency, quality and performance by delivering real-time visibility, control and intelligence across operations and functional areas.
APM Offering
Schneider Electric announced a new partnership with MaxGrip that will enable a more comprehensive asset lifecycle management offering that includes assessment services and risk-based maintenance capabilities. This expanded offering will be available as part of Schneider Electric’s Enterprise Asset Performance Management (APM) solution.
This solution delivers a comprehensive view of asset health as a first step of an asset reliability strategy that takes into account business context to benchmark current performance and identify areas for improvement. Expert consultants will address a number of key areas of evaluation such as HSE (health, safety and environment), cost control, resource allocation, use of OT/IT systems and asset utilization. These insights will be translated into a pragmatic action plan to optimize production and improve margins while ensuring regulatory compliance.
As a result of this partnership, Schneider Electric can offer enhanced APM capabilities that allow customers to better strategize and optimize maintenance execution according to asset criticality for optimal business results. Risk analysis, what if analysis and asset management strategic review can provide detailed insight into asset reliability and performance, facilitating long-term strategic planning. Users can optimize operations by eliminating reoccurring incidents with root cause analysis, inventory management and strategy simulations to identify hidden inefficiency and drive value across the enterprise. An extensive library of asset reliability data and templates allows up to 90% faster time to deployment.
Subscription Access Across Industrial Software Portfolio
An expansion of the company’s subscription license model – Subscription Access – includes greater value, new benefits and access to more industrial software applications. Customers choosing this offering can benefit from reduced upfront costs, ease of license fee management, access to exclusive products, bundled capabilities and a lower total cost of ownership. Subscription Access is now available when purchasing Engineering, Planning, Operations and Asset Performance, as well as Control and Information software solutions.
Expands Cloud Platform with New Performance Module
Continued expansion of its cloud platform, Insight, powered by Wonderware Online, with new Insight Performance module that provides Overall Equipment Effectiveness (OEE) monitoring, asset utilization analysis and downtime tracking in the cloud.
This Software as a Service (SaaS) offering offers the following capabilities:
- Light-weight applications that are easier to install, configure and maintain
- Virtually no on-premise servers or hardware requirement
Enhances Manufacturing Operations Management Offering for Mining Industry
The company announced enhancements to its Manufacturing Operations Management (MOM) solution for the Mining industry. This initiative can help optimize the mining supply chain, drive efficiency and maximize utilization of all operating assets, resulting in better profitability.
This data, when made available to domain-specific decision support tools and integrated with supply chain and enterprise resource planning systems, unlocks new levels of intelligence to drive continuous improvement. Eliminating manually entered production values while breaking down pervasive operational data silos can minimize time, errors and costs associated with manual and duplicate data-entry, further enhancing agility and efficiency.
Select improvements of Schneider Electric Software’s MOM solution for the Mining industry include:
- User selectable point in time feature for ‘Inventory data reprocessing’
- Data reprocessing has improved performance by 4X
- New “Calculated Inventory” feature to define custom calculations on captured inventory data
- Ampla Planner, Gantt Chart usability and user experience enhancements
- Client response times has improved performance by 2X
- Wonderware Online InSight connectivity
Powers Roy Hill’s Remote Operations Center
The company announced the success achieved at Roy Hill, an independent iron ore operation in Western Australia. Roy Hill implemented a Schneider Electric Mining industry software solution to consolidate end-to-end operational visibility and optimize their mining value chain.
Roy Hill built a greenfield iron ore mine and mine process plant in the Pilbara region, a heavy haul railway system from mine-to-port, new port facilities in Port Hedland, and a Remote Operations Center (ROC) in Perth. Each of these infrastructure components were designed to meet its capacity of 55 million tonnes per annum (Mtpa) of iron ore.
Most leading mining companies have historically evolved with organizational silos, usually between mines, processing facilities and logistics. In the age of increasing automation, data, and digitalization, these silos often prevent end-to-end visibility and optimization opportunities to realize resource to market potential. Through its efforts, as no small accomplishment, Roy Hill has been able to avoid these pitfalls with the help of its ecosystem partners, including Schneider Electric.
Roy Hill implemented Schneider Electric’s industrial software offering tailored for the mining industry, which included the following specific solutions:
- Demand Chain Planning and Scheduling (DCPS)
- Inventory Tracking and Quality Management (ITQM)
- Delay Accounting (DA)
- Capacity Simulation Model (Pre-CAPEX Analysis)
Drives Digital Transformation in Food & Beverage
Three new Food and Beverage manufacturing solutions were announced as part of the company’s ongoing effort to drive operational excellence, efficiency and performance while enabling regulatory and food safety compliance.
Food and Beverage and Consumer Packaged Goods manufacturers face a number of challenges, which are potentially impacting profitability. Growing environmental and sustainability related regulations are resulting in higher energy costs. Product yields must continually be improved to meet an increasingly diverse set of consumer demands. Each of these industry challenges must be addressed while maintaining product quality and safety standards to avoid product recalls and ensure continued consumer trust and confidence.
Three new industry solutions from Schneider Electric can help manufacturers to address these challenges:
- Energy Performance – provides improved visibility into energy usage, enabling opportunities to reduce consumption and costs
- Advanced Process Control (APC) – allows manufacturers to improve yield and product quality by minimizing unpredictable variations in the drying process
- Label Assurance – ensures compliance through 100% label inspection checks; reduces recalls
These solutions empower Food and Beverage manufacturers to simultaneously improve efficiency, quality and performance by delivering real-time visibility, control and intelligence across all operations and functional areas.
by Gary Mintchell | Sep 6, 2017 | Commentary, News, Software
A little consolidation in the industrial software space. Remember when Schneider Electric was shopping its software division a couple of years ago and came up with a reverse acquisition with AVEVA? And the deal fell apart almost a year ago?
Well, it seems that Schneider spent the year internally restructuring such that it could pull off this weird financial transaction. Announced Monday evening, the two companies have reached an agreement to ship SE software to AVEVA forming a new company with SE as a 60% owner and AVEVA holds the other 40%. Plus AVEVA shareholders get some cash in the deal.
Management touts the transaction as having a clear and compelling business logic. Reasons include building a “global leader in engineering and industrial software”, covering entire asset lifecycle management, and positioned for further acquisitions.
I’ve believed that Schneider would sell off its software businesses ever since the deal for Invensys was announced. Some venture capitalists have talked with me about potential acquisitions. Evidently no one wanted to buy it. I thought maybe Wonderware could make it on its own as a spinoff, but there probably wasn’t enough financial payoff for Schneider with that sort of deal.
However, this also isn’t a clear divestiture. One is left wondering what the future will bring in a couple of years when this transaction matures.
The Management of the Enlarged AVEVA Group will be comprised of:
- Key members of the existing executive management team of AVEVA, namely Dave Wheeldon (Chief Technology Officer and currently also Deputy Chief Executive Officer) and Steen Lomholt-Thomsen (Chief Revenue Officer) are expected to remain in place following completion;
- Ravi Gopinath, currently Executive Vice President of the Schneider Electric Software Business, will be appointed as Chief Operating Officer of the Enlarged AVEVA Group. He will report to the Chief Executive Officer of the Enlarged AVEVA Group; and
- David Ward will continue in his current role as Chief Financial Officer of AVEVA, until a new Chief Executive Officer is appointed. Following such appointment it is intended that David Ward will be appointed to the role of Company Secretary of the Enlarged AVEVA Group.
I received this from Vertical Research Partners analyst Jeff Sprague:
- Deal Structure Overview – Schneider Electric announced today the combination of its industrial software business and AVEVA to create a global leader in engineering and industrial software. On completion, Schneider will own 60% of the combined new AVEVA group while existing AVEVA shareholders will have 40% equity ownership. However, SU is contributing a little over 60% of the proforma EBITA in addition to a £550MM payment, and allowing AVEVA to distribute a £100mm dividend to AVEVA shareholders at or around completion. Schneider will benefit from unlocking the higher trading multiple of its Software business outside of the Group structure, in addition to future synergies (unquantified). We estimate the transaction creates 42 euro cents of value to SU’s stock price. Closing is expected to be at or around end of 2017.
- Strategic Rationale – The combined company will provide engineering services and industrial software, with combined revenues of £657.5mm and adjusted EBITA of £145.8mm for the financial year ended March 2017. The combined portfolio will cover process simulation to design and construction to manufacturing operations/ optimization. As shown below, AVEVA is very strong in the front end design and engineering work while SU is strong in O&M and asset optimization. The company noted an ability to create a more streamlined solution as it will control both ends of the spectrum. Management also indicated plans to scale up with future M&A. AVEVA will also enhance the value proposition of Schneider’s existing IOT platform (ExoStructure).
The only interest I’ve seen with total asset lifecycle management is with the OIIE platform from MIMOSA (download whitepaper from my site). A few end-user companies have shown interest in that, but I don’t know that the combined companies will offer much of a competitive advantage in that regard. That would require strong management bringing the disparate parts together into a whole.
For example, I only point to GE Digital whose recent public woes with the Predix system point to the difficulties of software integration.
