Acquisitions Bolster Incumbents Further Consolidate Industry

Acquisitions Bolster Incumbents Further Consolidate Industry

The IT architecture of industrial / manufacturing applications increasingly boosts the role of cloud and edge. These technologies have become core to Industrial Internet of Things (IIoT) and improved Software as a Service (SaaS).

These recent acquisition news items reflect the acceleration of the trend. One is from Siemens and the other PTC.

Siemens plans acquisition of Edge technology

In brief:

  • Siemens further expands its digitalization portfolio for industry
  • Technology basis is the Docker IT standard
  • Siemens Industrial Edge ecosystem enables easy and flexible use of Edge apps

Siemens is planning the acquisition of Edge technology from the US company Pixeom. With this action, Siemens is strengthening its Industrial Edge portfolio by adding software components for Edge runtime and for device management. Siemens Industrial Edge provides an ecosystem, which enables the flexible provision and use of apps. This means for example that appropriate apps can analyze data locally at the machine and send relevant data to the higher-level Industrial Edge Management System for global analytics. With this acquisition, Siemens is driving forward the expansion of its Digital Enterprise portfolio and the integration of cutting-edge technologies for the digital transformation of industry.

With the resulting Industrial Edge ecosystem, industrial companies can use production data even more efficiently and react more flexibly to changes in conditions.

Ralf-Michael Franke, CEO of Siemens’ Factory Automation Business Unit, explains: “Cutting edge technologies such as Edge Computing open up new scope for automation. With Siemens Industrial Edge, we are creating an open edge ecosystem which offers benefits for companies of any size.”

Siemens is using Docker standard container technology: the provision of apps in the management system will therefore be just as simple as functional upgrades and updates of Edge devices in the factory from a central point.

Siemens intends to acquire this technology from Pixeom and use it in the Factory Automation Business Unit, which is part of Siemens Digital Industries. Pixeom has sites in San José, California and Udaipur, India and employs 81 people worldwide. Closing of the transaction is planned for the fourth quarter of 2019. Both companies have agreed not to comment on the financial details of the transaction.

PTC Makes SaaS Acquisition

I sat in on the analysts/press conference where PTC president and CEO Jim Heppelmann discussed the reason for this announced acquisition of Onshape, creators of the “first” Software as a Service product development platform. The company had also just released fourth quarter results. PTC has a little more than $1 billion in revenues, with about 45% CAD and 35% PLM. Interestingly, the IoT business contributes just over 10% of revenues.

Onshape’s product development platform unites computer aided design (CAD) with data management and collaboration tools, for approximately $470 million, net of cash acquired. The acquisition is expected to accelerate PTC’s ability to attract new customers with a SaaS-based product offering and position the company to capitalize on the inevitable industry transition to SaaS. Heppelmann believes that that cloud-based SaaS is the future of CAD. Pending regulatory approval and satisfaction of other closing conditions, the transaction is expected to be completed in November 2019.

Located in Cambridge, MA, Onshape was founded in 2012 by CAD pioneers and tech legends, including Jon Hirschtick, John McEleney, and Dave Corcoran, inventors and former executives of SolidWorks. Onshape has secured more than $150 million in funding from leading venture capital firms and has more than 5,000 subscribers around the world. The company’s software offering is delivered in a SaaS model, making it accessible from any connected location or device, eliminating the need for costly hardware and administrative staff to maintain. Distributed and mobile teams of designers, engineers, and others can benefit from the product’s cloud nature, enabling them to improve collaboration and to dramatically reduce the time needed to bring new products to market – while simultaneously staying current with the latest software.

“PTC has earned a reputation for successfully pursuing new innovations that drive corporate growth,” said Heppelmann. “Building on the strong momentum we have with our on-premises CAD and PLM businesses, we look to our future and see a new growth play with SaaS.”

This acquisition is the logical next step in PTC’s overall evolution to a recurring revenue business model, the first step of which was the company’s successful transition to subscription licensing, completed in January 2019. The SaaS model, while nascent in the CAD and PLM market, is rapidly becoming industry best practice across most other software domains.

“Today, we see small and medium-sized CAD customers in the high-growth part of the CAD market shifting their interest toward SaaS delivery models, and we expect interest from larger customers to grow over time,” continued Heppelmann. “The acquisition of Onshape complements our on-premises business with the industry’s only proven, scalable pure SaaS platform, which we expect will open new CAD and PLM growth opportunities while positioning PTC to be the leader as the market transitions toward the SaaS model.”

For customers, the SaaS model enables faster work, improved collaboration and innovation, with lower up-front costs and with no IT infrastructure to administer and maintain. For software providers, the SaaS model has been proven to generate a more stable and predictable revenue stream, increase customer loyalty as customers benefit from earlier adoption of technology innovations, and enable expansions into new segments and geographies.

“At Onshape, we share PTC’s vision for helping organizations transform the way they develop products,” said Jon Hirschtick, CEO and co-founder, Onshape. “We and PTC believe that the product development industry is nearing the ‘tipping point’ for SaaS adoption of CAD and data management tools. We look forward to empowering the customers we serve with the latest innovations to improve their competitive positions.”

Onshape will operate as a business unit within PTC, with current management reporting directly to Heppelmann.

Acquisitions Bolster Incumbents Further Consolidate Industry

Emerson Automation Steps Up Digital Transformation Game

Everyone touts Digital Transformation lately. Emerson Automation has been patiently building a Digital Transformation practice through acquisition and development. Executives announced advances at this year’s edition of Emerson Global Users Exchange—my second stop of the Fall Conference Tour. I see Emerson pulling away from many of its automation peers becoming part of a select group of suppliers putting it all together (the others being Siemens, ABB, and Schneider Electric / AVEVA).

I’m going to run through some of the more significant announcements from the press conferences so far this week.

New Digital Transformation Organization

Emerson has established a dedicated organization focused on digital transformation technologies and programs. The Digital Transformation business brings together resources to help manufacturers develop and implement pragmatic digital transformation strategies that deliver industry-leading, or Top Quartile, performance. The $650+ million business combines existing expertise in consulting, project execution, smart sensor technologies, data management and analytics – all part of Emerson’s Plantweb digital ecosystem. The organization will help customers not only establish a clear vision for digital transformation, but also execute and realize measurable results at each step of their journey.

“In a space inundated by confusing promises, Emerson helps customers define and execute a practical and successful path to digital transformation,” said Lal Karsanbhai, executive president of Emerson’s Automation Solutions business. “With our new Digital Transformation business, we are strategically focused on guiding customers to the right strategy, helping them drive improved organizational alignment, and implementing programs that accelerate improved business performance.”

“The industry is at a critical point in the digital transformation journey,” said Stuart Harris, group president for Emerson’s new Digital Transformation business. “Many companies have a vision but struggle to implement practical solutions that deliver results and therefore they are getting frustrated. Other companies are solving specific problems, but not realizing value at scale across the enterprise. Emerson has the technology to provide practical solutions, and the experience to define the best practices and roadmap to help make a broad operational impact.”

Existing and new Emerson resources comprising the business include:

  • Operational Certainty Consulting: facility and enterprise-level roadmap strategies and implementation to improve reliability, safety, production and energy utilization metrics
  • Operational Analytics: the industry’s most comprehensive portfolio of predictive diagnostics and advanced analytics, providing insights on health and performance of operational assets
  • Industry Solutions: deep, industry-specific expertise on solutions to drive key performance indicators
  • Pervasive Sensing: the industry’s largest portfolio of smart, easy-to-deploy, connected devices, including wireless instruments
  • Project Management: best practices, tools and resources to  implement a digital transformation project with confidence

Comprehensive Operational Analytics Portfolio

Emerson’s portfolio of operational analytics focuses on the greatest source of value for industrial manufacturers – the production itself. Operational analytics with embedded domain knowledge can impact and improve performance of simple equipment, complex assets and process units, and entire production plants.

“We recommend addressing the high impact, known problems first,” Zornio said. “By using proven models that make analytics accessible to the personnel responsible for the performance of assets, our customers can act quickly to solve problems faster. For example, Emerson’s solutions can detect and address 80% of the equipment failure modes contributing to production loss in a plant in real-time.”

Additionally, Emerson’s enhanced portfolio includes machine learning and artificial intelligence that can be used to identify new discoveries and deepen insight to impact business performance. These tools provide perspective previously unattainable with traditional analytics.

“With our acquisition of KNet and its integration into our Plantweb Optics asset performance platform, Emerson can provide not only some of the most advanced machine learning and AI tools in the industry, but also the connection to people and workflows, which are critical to digital transformation success,” Zornio said.

Emerson’s portfolio now provides both pre-packaged analytics solutions as well as a complete analytics toolbox for users to develop their own applications. This portfolio is supported by Emerson’s Operational Certainty consulting practice and robust data management capabilities that provide a foundation for analytics success.

AMS Asset Monitor increases visibility and adds predictive analytics

AMS Asset Monitor edge analytics device digitalizes essential asset data and analytics for better operations performance and improved decision making. AMS Asset Monitor provides actionable insights into essential
assets that were previously monitored only with infrequent assessments. The new edge analytics device will connect with Emerson’s Plantweb Optics asset performance platform to provide key operations personnel with instant asset health details for operations and maintenance decision making.

Plants typically monitor the condition of essential assets such as pumps, fans, and heat exchangers only every 30 to 60 days. The longer the gap, the more likely that a defect goes undetected and results in an unexpected failure with significant impact on production, product quality, and plant efficiency. The new AMS Asset Monitor combines easy deployment, embedded logic-based analytics, and intuitive health scoring to make it easier for organizations to monitor and maintain essential assets. For instance, AMS Asset Monitor’s analytics and visualization can help plant personnel effectively plan maintenance during scheduled shutdowns and turnarounds and reduce or eliminate unplanned downtime.

Unlike typical analytics devices that send data to a historian or the cloud to be processed later, AMS Asset Monitor provides analytics at the edge, performing calculations at the device. This device-centered analytics capability reduces the time, complication, and expense of adding analytics to a plant’s assets. Each device collects data continuously and uses embedded logic to identify and diagnose common reliability issues. Individual issues such as imbalance, misalignment, bearing faults, lubrication issues, or fouling are consolidated into an overall asset health score. AMS Asset Monitor then communicates these health scores via a web browser or—when integrated with Plantweb Optics—through real-time persona-based alerts on mobile devices. Plantweb Optics also enables enterprise-wide visibility and expands edge analytics and digital intelligence throughout the organization, keeping personnel aware of essential asset health.

“Plants are always looking for more ways to improve profitability by increasing productivity. Just a percentage point or two in availability can equal millions of dollars per year or more,” said John Turner product manager for online prediction, Emerson. “The AMS Asset Monitor enables personnel across the plant to see the current health of essential assets along with suggested actions to improve asset health. This allows them to make informed decisions to maintain reliability, increase uptime and maximize productivity.”

The AMS Asset Monitor’s small footprint along with wired or wireless Ethernet connectivity make it simple to install. The edge device can support new applications by simply adding new logic-based analytics.

Industrial Wireless Network Solution

Emerson is partnering with Cisco to introduce a next-generation industrial wireless networking solution. The new Emerson Wireless 1410S Gateway with the Cisco Catalyst IW6300 Heavy Duty Series Access Point combines the latest in wireless technology with advanced WirelessHART sensor technology, delivering reliable and highly secure data, even in the harshest industrial environments.

“A secure connection that scales easily is the foundation for every successful IoT deployment.” said Liz Centoni, senior vice president and general manager, IoT at Cisco. “By using the power of the intent-based network, Cisco provides a secure, automated, rock solid infrastructure helping IT and operational teams work together to reduce complexity and improve safety.”

This next-gen wireless access point provides enhanced wi-fi bandwidth necessary for real-time safety monitoring, including Emerson’s Location Awareness and wireless video. These applications enhance personnel safety practices, improve plant security and help ensure environmental compliance. A reliable and fast connection between devices and people streamlines decision making by providing real-time analytics. It also enables a mobile workforce to virtually come together, collaborate and resolve critical issues in a timely manner.

“Products installed in industrial plants need to last for years, even decades,” said Bob Karschnia, vice president of wireless at Emerson. “This kind of longevity was a critical design and engineering requirement to ensure this new wireless access point was future-proofed to meet a rapidly evolving technology landscape.”

Personalized Digital Experience

​​​​Emerson‘s new personalized digital experience – MyEmerson–connects people and technology through streamlined work processes and better collaboration. With a MyEmerson online account, users can access digital tools to quickly engineer solutions, manage software and installed assets, access training, collaborate with experts, streamline procurement processes, and improve visibility into buying history and trends.

“Driven by our personal interaction with digital technology, customers have new expectations today about speed and access to information,” said Brad Budde, vice president of digital customer experience, Emerson
Automation Solutions. “Our customers still want access to human expertise, but now expect a great digital experience as well. Combining these two experiences to deliver information immediately and use it to solve problems faster is what drives new business value.”

Digital engineering tools help engineers collaborate, gain confidence in an evolving industry, and streamline time-consuming manual processes. With online sizing, selection, and configuration tools for measurement instrumentation, valves, actuators, fluid control, pneumatic and electrical solutions, engineers can confidently and accurately specify solutions for their unique requirements and process conditions. By employing
digital tools, engineers can configure instrumentation up to 93% faster, typically saving over 100 engineering hours annually.

For procurement professionals, MyEmerson includes access to online purchasing and supplier management resources. Once solutions are selected and configured by engineering counterparts, the information moves seamlessly to the procurement team – eliminating the need for manual handoffs and duplicate entry of model codes. Procurement personnel can then create requisition lists, generate quotes and automatically populate purchase orders. With greater visibility to order status and order history, procurement teams have access to the information they need to drive more efficient processes.

The MyEmerson development roadmap will centralize the management of software, hardware and workforce upskilling. With easier access to technical documentation, easier identification of device location, and the ability to initiate repair, replacement or service as needed, organizations gain maintenance and turnaround planning efficiencies. By moving from manual management of disparate software applications, updates and
licenses, users will be able to actively operate and maintain their software portfolio through a single-entry point. Both hardware and software records will be tightly integrated to relevant training, enabling trackable and accessible information in the same experience.

Manufacturing Simulation Software Competitive Assessment

Manufacturing Simulation Software Competitive Assessment

Industrial Internet of Things plays the starring role in the new digital transformation theater, but digital twin is the supporting actress without whom there would be no drama. Simulation comprises an important element of this whole digital enterprise scene. ABI Research has been releasing some interesting research reports, and this one just hit my inbox that is quite interesting.

The Manufacturing Simulation Software Competitive Assessment analyzed and ranked seven major vendors in the industry – Siemens, Dassault Systèmes, Arena (Rockwell Automation), AnyLogic, FlexSim, Simio, and Simul8 – using ABI Research’s unbiased innovation/implementation criteria framework. For this competitive assessment, innovation scores examined the technical capabilities of the vendor’s software and implementation scores focused on the vendor’s commercial ability to deliver their solution around the world across a variety of manufacturing verticals.

Ranked as the top manufacturing simulation software vendor, Siemens scored highest in implementation and topped four of the ten scoring criteria. Dassault Systèmes came in a close second, having scored the highest in innovation and topped three of the ten criteria.

A key judgment criterion within the innovation category was digital twin capability, the software’s ability to align end-to-end physical processes with a dynamic digital representation that provides two-way feedback and ongoing optimization. Vendors were also judged according to data ingestion, the software’s ability to utilize high volumes of real-time data from a variety of sources, including industrial equipment and sensors on the factory floor. Further assessment included UX, data modeling and analytics, and virtual commissioning capabilities.

ABI Research chose these vendors for the assessment due to their simulation capabilities in discrete manufacturing specifically, where software is used to simulate physical processes digitally to optimize engineering, planning, and operations on the factory floor.

Siemens scored strongest overall due to its ability to integrate simulation with the widest range of adjacent industrial software and hardware. This integration provides the most robust end-to-end product offering to manufacturers. Another major strength of Siemens is virtual commissioning, delivered through its Simcenter and PLC Sim Advance tools. These tools allow simulation capabilities to extend to the machine control level, where individual machines can be virtualized and modeled to improve equipment efficiency and reduce failure rates. Dassault Systèmes very closely followed Siemens and topped the innovation category due to outstanding digital twin capabilities and analytics performance via the company’s impressive 3DExperience platform. These two companies stood out from the field and were therefore named Leaders in the report.

“It is no coincidence that the two companies with the strongest end-to-end software offerings across the smart manufacturing value chain have emerged as Leaders in this report,” said Ryan Martin, Principal Analyst at ABI Research. “Siemens and Dassault Systèmes can leverage their broad service offerings and industrial expertise to feed innovation and to implement complete solutions that equate to powerful and reliable simulations in discrete manufacturing.”

Three companies- Arena (Rockwell), AnyLogic and FlexSim- were named as Followers in the report. While these companies lack the full range of simulation capabilities of the Leaders, especially at the machine and equipment level, they have strong modeling and analytics capabilities. They, therefore, provide effective solutions for simulating factory floor layouts to optimize discrete manufacturing performance according to key metrics such as product throughput, machine downtime, capacity, and inventory levels. Arena, owned by Rockwell Automation, topped the Followers category due to strong performance in data modelling and analytics. Arena’s complex variability modeling capabilities and its strong installed base within the market contributed to a strong score in implementation.

“Ultimately the companies that scored best in the ranking can go beyond high-level factory layout simulation by also accurately modeling and commissioning industrial equipment on the factory floor and incorporating product design into the simulation environment. This means the way machines behave and how they are used to manufacture actual products is considered more comprehensively, a key factor in generating more reliable simulations. For this reason, Siemens and Dassault Systèmes stand out as market leaders in discrete manufacturing simulation software,” concludes Martin.

Manufacturing Simulation Software Competitive Assessment

Siemens Spotlight on Innovation

I flew to Orlando May 22 as a guest of Siemens along with a select few other “influencers” to be introduced to a number of innovation projects fueled by Siemens technology. We met at the Dr. Phillips Center for Performing Arts in downtown Orlando (did you even know there was a downtown?), which itself is filled with Siemens equipment. There are few companies in the industrial area which I cover that have the vision and execution that Siemens is exhibiting right now.

By the way, there is a fantastic little taco place in downtown Orlando. Email or DM on Twitter, and I’ll share the name. Greg Hale of ISSSource.com and I had dinner there Wednesday. We agreed—among the best tacos we’ve had.

Barbara Humpton, CEO Siemens USA, led with an overview. Siemens has made a greater than $1B investment in R&D in the US with 7,000 engineers churning out 700 inventions per year.

She introduced former stunt man and motorcycle racer turned CEO Mike “Mouse” McCoy, CEO & Founder of HackRod. McCoy built on a foundation of Siemens PLM and SolidEdge CAD. He added a gaming engine. He was able to use VR for design reviews, interference checking, and simulation during the design process. We followed along with design and review of a new motorcycle. A few parts required somewhat exotic materials. Oak Ridge National Labs printed the parts from the design files downloaded from HackRod. The design teams were in Ventura, CA and Princeton, NJ with input from Munich, Germany. Collaboration was not a problem.

Beginning of design until component parts shipped to Orlando—2 weeks. The parts arrived Tuesday. McCoy and a partner assembled the motorcycle on Tuesday evening and wheeled (not drove) it onto the stage Wednesday about 1:30. Not bad? Heck, in my early career, we couldn’t have done a foam-core mock up in that time frame.

One thought McCoy left us with. “We need to talk STEAM, not just STEM—science, technology, engineering, arts, math.” It is now possible for artists and designers to be an intimate part of the team going from art to finished product quickly. 3D printing from PLM files. Way cool.

How about a high school mechanical design student given a project to provide a lighter prosthetic foot for an Army vet? Humpton introduced 18-year-old high school student Ashley Kimbel who had undertaken just such a project. She worked with the veteran to analyze his current “foot” looking for areas where weight could be eliminated. Then she had to learn how to fabricate and manufacture the device. We saw films of the veteran running with Ashley proving out the new prosthetic.

This is a long way from projects I had as a 17-year-old senior. Education and technology have come a long way in a lifetime. Oh, and her future? She wants to work in bioengineering designing and 3D printing organs. She will be working on that during her tenure at UAB. She is going to make a difference for many people.

I have many more ideas and conversations to capture. This will serve for now.
Check out #SiemensInnovates

Manufacturing Simulation Software Competitive Assessment

Gaining Trust In Your Data Systems

Digitalization breeds the need for data and connected devices. Trusted connections and data are required for success. Siemens invited a diverse group of press, analysts, podcasters, and bloggers to Munich this week (November 26-28) to discuss cybersecurity and the Charter of Trust.

I will use the words of Siemens below to discuss the rationale for the Charter of Trust. However the idea is that if users cannot trust their data and connections, they will never go further into digitalization and therefore not realize the anticipated benefits.

Some of the analysts and others in the conference had trouble understanding how something seemingly vague and not specifically standards-based would work. I think they missed the point. First, standards are good, but they take a long time to develop. What was needed was not another new standard. What is needed is for many companies to agree to a set of principles and then commonly work toward them for the mutual benefit of the industry, users, and society.

Eva Schulz-Kamm, Global Head of Government Affairs at Siemens AG, and Rainer Zahner, Global Head of Cybersecurity Governance at Siemens told us the digital world is changing everything. Billions of devices are connected by the Internet of things. That holds great potential for everyone, but also great risk. The risk of exposure to cyber-attacks. The risk of losing control over the systems that run our infrastructures. Cybersecurity is therefore crucial to the success of our digital economy – because only if the security of data and networked systems is guaranteed will people actively support the digital transformation. Then explained why Siemens has initiated the Charter of Trust.

Siemens’ 171 years of experience have also shown that the best way to make a lasting difference isn’t as one company, but as an industry – not only as one nation, but as part of a global community. In modern history, competitor businesses have forged standards together that have carried the world from one industrial revolution to the next – including the unfolding digital transformation of industry. Countries without clear-cut geopolitical alliances have come together to forge cross-border agreements that grow trade and advance peace.

It’s in this spirit that Siemens launched the Charter of Trust earlier this year at the at the Munich Security Conference, a longstanding forum for business and government leaders to discuss geopolitical issues. Since then, several more global companies saw the value of the Charter of Trust, and signed on. These companies committed to create the first-of-its-kind global alliance focused on answering a very important question: How do we secure critical infrastructure – from our factories to our power grids – in the digital age?

We also are carrying an important message together: that when we talk about security today, it isn’t just about diplomacy and resolving military conflicts – it is increasingly about cyber attacks that seek to undermine our democratic and economic values.

The Charter of Trust then begins with these three goals:

  • protecting the data and assets of individuals and businesses;
  • preventing damage to people, businesses, and infrastructures;
  • building a reliable basis for trust in a connected and digital world.

“We know at the outset that a one-size fits all approach won’t work. We have instead agreed to 10 principles – from ensuring the highest levels of responsibility for cybersecurity within every company, to securing supply chains, products, and working with governments. Together, we will develop and continuously improve coordinated strategies and shared standards to protect critical infrastructures, public facilities and private companies.”

Charter of Trust members: The AES Corporation, Airbus, Allianz, Atos, Cisco, Dell Technologies, Enel, IBM, Munich Security Conference, NXP Semiconductors, SGS,. Deutsche Telekom, Total and TÜV SÜD.

Follow this blog

Get a weekly email of all new posts.