by Gary Mintchell | Oct 16, 2019 | Software
The design engineering function originates data. It includes data about the structure of the plant or factory, data about the equipment and processes used to make the product, and data about the product(s) itself. In my early career, I embodied the movement of the data from design to operations and then back to design in a continuous loop of as designed—>as built—>as designed. I was also involved for a while in the development of a platform to automate this process using standards.
To say I’m interested in this area would be an understatement. And this process is important to all of you, too. Including those who siphon off some data for other uses such as accounting, customer service, maintenance, and reliability.
AVEVA, the integration of its iconic design engineering software and Schneider Electric’s software business, just introduced integrated engineering software designed to help customers transform the way capital projects are engineered, executed, and integrated into operations and maintenance.
The integrated portfolio comprises three software solutions. AVEVA Unified Engineering integrates process design with front-end engineering and detailed 3D based design. AVEVA Unified Project Execution links and streamlines procurement and construction processes for capital projects. AVEVA Enterprise Learning enables the rapid skilling of operators and engineers using Extended Reality (XR) and simulation tools, to ensure efficient startups and shutdowns, normal operations, and the ability to handle abnormal situations
“This launch builds on the recent news describing AVEVA’s capabilities as the first company in the engineering and industrial software market to comprehensively address the end-to-end digital transformation imperatives with an integrated portfolio of solutions that deliver efficiency, unlock value and empower people across the lifecycle of capital assets and operational value chains,” commented Craig Hayman, CEO, AVEVA. “It changes the way that owner operators engage with Engineering, Procurement and Construction (EPC) companies in designing, building, commissioning, and operating their capital assets.”
The functionality provided in these integrated solutions enables the realization of an EPC 4.0 strategy for owner operators, central to digital transformation in the capital-intensive process sectors. This allows collaboration on a global scale, through hybrid cloud architectures and on a common platform. The entire manufacturing process can be traced, tracked, and linked – from engineering and design, through procurement and construction, to handover and to operations and maintenance, as a comprehensive Digital Twin for the capital asset.
“As competition in the business world accelerates the time has come for industrial organization to innovate to facilitate the transition from the manual, document-centric processes, towards a data-driven vision of project design, procurement, and execution in order to increase safety, reduce costs, and minimize delays, “ commented Craig Hayman, CEO AVEVA. “With the launch of AVEVA Unified Engineering, a first of its kind solution, we are breaking down the silos between engineering disciplines and enabling our customers to turn conceptual designs into 3D models quickly, accelerating engineering to estimation and ensuring designs can be operated before committing billions of dollars.”
New AVEVA Unified Engineering enables the integration of the process model and plant model lifecycles from concept to detailed design, delivering frictionless collaboration for multi-discipline engineers to collaborate in the cloud. The net result is a minimum 50% improvement in engineering efficiency in FEED and up to 30% in detail design, which can yield a 3% total installed cost improvement. These savings can be re-invested to ensure engineering quality, accuracy, and maturity for downstream project execution business processes.
AVEVA Unified Project Execution solutions integrate with AVEVA Unified Engineering to further break down the silos within Procurement and Construction by combining key disciplines covering Contract Risk Management, Materials and Supply Chain Control, and Construction Management into one cloud based digital project execution environment. AVEVA Unified Project Execution solutions deliver up to 15% reduction in material costs, 10% reduction in field labor costs and reduces unbudgeted supplier change orders by up to 50%, which translates to 10% total installed costs savings opportunities for our customers.
AVEVA’s Enterprise Learning solutions combine traditional simulation-based learning with 3D connected learning management solutions. AVEVA’s learning solutions extend process models and 3D models from AVEVA Unified Engineering to fast track DCS panel operator training, field operator training, process and maintenance procedural training, and process safety situational awareness training using cloud and Extended Reality (XR) technology to deliver up to 2% Total Installed Cost reduction by improved operations readiness.
“Our Engineering portfolio enhancements will deliver increased agility for our customers, enabling them to reduce cost, risk, and delays, minimizing errors and driving rapid capital project execution. The cost savings are realized by mitigating capital investment risks at the process design stage, cutting engineering man-hours by up to 30% in plant design, reducing material costs in procurement by up to 15% as well as reducing field labor costs in construction by up to 10%,” commented Amish Sabharwal, SVP, Engineering Business, AVEVA. “With these new solutions AVEVA is providing integration across all stages of the capital project, from conceptual design to handover, to optimize collaboration and break down silos between both engineering disciplines and project stages.”
by Gary Mintchell | Dec 15, 2018 | Commentary, News
Remember the TV ads where the recent college graduate gets a job with GE? He then must explain to his parents that it is not an old-line dirty industrial company but a hip software company.
Send those ads to the never, never land of wherever bits go when they are deleted from servers.
GE has been trying to divest GE Digital for about a year. Evidently there were no takers. It just announced spinning off Digital into a new “IoT Software Company.” Or, if you want the GE spin on the action, “GE Advances Digital Leadership with Launch of $1.2 Billion Industrial IoT Software Company.”
I attended just one GE Digital Minds+Machines conference. It was 2017, and after listening to the new CEO (who is now a former CEO) asked “could this be the last Minds+Machines?” Appears I was right.
Bullet points from the press release:
- New GE-owned, independently run entity will be established to expand company’s leadership in IIoT market and better serve industrial customers
- GE selling majority stake in ServiceMax
The company will start with $1.2 billion in annual software revenue and an existing global industrial customer base. The company is intended to be a GE wholly-owned, independently run business with a new brand and identity, its own equity structure, and its own Board of Directors. The proposed new organization aims to bring together GE Digital’s IIoT solutions including the Predix platform, Asset Performance Management, Historian, Automation (HMI/SCADA), Manufacturing Execution Systems, Operations Performance Management, and the GE Power Digital and Grid Software Solutions businesses.
Additionally, GE announced an agreement to sell a majority stake in ServiceMax, a leading provider of field service management software, to Silver Lake, a leading private equity firm focused on technology investments. With these actions, GE will sharpen the focus of its IIoT portfolio to position the new business for future growth. The transaction is expected to close in Q1 2019, subject to customary closing conditions and regulatory approvals.
“As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise,” said GE Chairman and CEO H. Lawrence Culp, Jr. “As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers and generate new value for shareholders.”
GE’s new IIoT business would provide software for these asset intensive industries with a focus on the power, renewables, aviation, oil and gas, food and beverage, chemicals, consumer packaged goods and mining industries.
GE Digital CEO, Bill Ruh, has decided to depart GE to pursue other opportunities. The company intends to conduct an internal and external search to identify the CEO for this new independent company. Further details on GE’s new IIoT software company will be announced in Q1 2019. This plan is subject to customary regulatory approvals, including information and consultation with employee representatives where required.
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 | Nov 15, 2017 | Commentary, News
GE’s restructure includes sharp cuts at GE Digital.
Jeff Imelt had a dream for GE. It would get on board the digital manufacturing train. They would ride it toward new modes of profitability. He built a division called GE Digital and spent a lot of money on it.
Then profits and stock price took a dive. One of those activist investors got a seat on the board. The kind of guy who doesn’t want to build a company. He wants to break it up in order to get a quick payday.
Immelt’s out. Flannery, former CFO, is in. When he spoke at Minds + Machines a few weeks ago, we knew there were cuts coming. But he said he was all in on digital. But he also said he wanted more use of partners and less of inventing everything inside.
Well the shoe dropped. $400 million in cuts at GE Digital. Lots of layoffs. We’ll just have to see what the future holds for GE in the software business.
The creation of GE Digital and its Predix product befuddled most of us on the outside. There were many aspects that looked like they were thrown together in order to satisfy upper management’s drive to show results of digital transformation.
(Aside: those of us who have worked in product develoment, like me, have never seen upper management pressure to get something released before its time—he said sarcastically.)
From The New York Times, “GE Digital, Mr. Flannery said, “continues to be vital to the company.” But its spending will be trimmed sharply as it concentrates on a narrower set of products that improve the efficiency and performance of G.E.’s industrial equipment.”
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.
