Schneider Electric To Complete Acquisition of AVEVA

Financial investors today value software companies more than hardware companies. Notice how long-time industrial companies such as Emerson and Rockwell Automation and Siemens and ABB tout themselves as software companies.

Schneider Electric picked up a substantial software portfolio with its Invensys acquisition several years ago. It used those assets to invest in engineering software company AVEVA gaining more than a 50% ownership position. Later, AVEVA picked up OSIsoft.

One of the values of attending conferences includes lunch and break ad hoc conversations. I was chatting with ARC  vice president Craig Resnick at the Ignition Community Conference last week. He explained the news that Schneider Electric is completing acquisition of AVEVA.

He told me Schneider Electric intends to, among other matters:

  • accelerate the transition to a subscription and cloud-based industrial SaaS model at AVEVA, allowing AVEVA to fully focus on the business model transition, on its customers and its technology;
  • maintain AVEVA’s software as fully agnostic and to preserve its business autonomy;
  • maintain AVEVA’s existing corporate headquarters in Cambridge, UK;
  • maintain and develop AVEVA’s R&D presence in the UK and accelerate investments in R&D; and
  • support AVEVA’s existing plans to enhance its operations in Cambridge, UK and also remains committed both to offering apprenticeships and maintaining active research links with universities in the UK, including Cambridge.

Further reading from Yahoo! News and Bloomberg:

Schneider Electric SE agreed to buy out minority shareholders in Aveva Group Plc in a deal that values the UK industrial software company at £9.5 billion ($10.8 billion), the latest foreign takeover of British tech company.

Schneider will pay £31 per share, the company said in a statement on Wednesday, confirming an earlier Bloomberg News report. Under the terms of the deal, the company, which already owns 59.14% of Cambridge, England-based Aveva, will pay about £3.87 billion for the remaining equity.

Gas Analysis Solutions Center to Help Plants Meet Sustainability Goals

As surely as security has been a significant 2022 trend, so also has sustainability. Since early June, I’ve been in several conversations regarding work technology firms are accomplishing in this arena. I’ve talked in the past about Emerson and hydrogen. This Emerson news concerns sensing technologies for emissions monitoring.

New Scotland-based center will develop and provide training for next-generation gas sensing technologies used for emissions monitoring, process control and safety.

For those interested in what we can do on a personal level about this important work, check out the work of hundreds of volunteers of The Carbon Almanac. 

Emerson announced August 29, 2022 the opening of a facility in Cumbernauld, Scotland, equipped with engineering, development and manufacturing resources for sensor, mechanical, electronics and software design for the company’s gas analysis portfolio. Spurred by demand to reduce the environmental impact of industrial process facilities, the new gas analysis solutions center will produce more than 10 different sensing technologies that can measure more than 60 different gas components, delivering on Emerson’s commitment to supporting customers’ decarbonization efforts.

As a global hub for the production and distribution of gas sensing technologies, the 62,000-square-foot facility will engineer and manufacture Emerson’s Rosemount continuous gas analyzers and gas chromatographs, which are used to improve emissions monitoring, plant safety, quality control and operational efficiency. These tools are critical to helping process plants meet increasingly stringent environmental regulations and ensuring process control in hydrogen, biofuel, food and beverage, pharmaceutical and aerosol manufacturing, as well as reducing waste and scrappage to foster sustainability.

The center includes a training space and offers training options for customers, including classroom, onsite and web-based courses, giving Emerson greater ability to demonstrate how the latest gas analysis technologies can help customers run their operations reliably, safely and efficiently. It is certified by the International Organization for Standardization (ISO) and complements Emerson’s global network of facilities certified by ISO standards for quality, occupational health and safety, and environmental management systems.

The facility is also equipped with a gas extraction system, an environmental chamber and an external gas storage to facilitate gas analyzer testing and application research and development. Combined with calibration capabilities, a dedicated area for performing factory acceptance testing, and a customer collaboration space, these capabilities will help assure product performance and integrity and streamline the customer experience.

EY and GE Digital Announce Alliance Promoting Data-driven Manufacturing

► Helps to improve quality of services while providing on-time results

► Reduces operating and maintenance costs

► Includes experienced technology implementation support

Only a few trends pop up at this time in our industrial digital market chief among them being partnerships. I saw a news item from GE Digital about partnering with Ernst & Young (EY) on of the large consulting firms. A conversation with Richard Kenedi, GM manufacturing and digital plant for GE Digital was called for. 

He told me that even though EY already works with clients to implement GE Digital solutions, this formal agreement allows both organizations to facilitate account planning execution.

According to the news release, companies are seeking to gain a competitive advantage by expediting their digital transformation journey. As critical key performance indicators (KPIs) for the industry include the need for operational efficiency, quality management improvement, loss reduction and energy efficiency, the EY−GE Digital Alliance will provide solutions and guidance on ways to increase productivity while lowering costs. Through this alliance, manufacturers can also leverage support from EY US teams to implement and integrate GE Digital software to develop more data-driven manufacturing operations.

The Carbon Almanac

A volunteer group of hundreds has written and published The Carbon Almanac with hundreds of insights about how to cut carbon and create a more sustainable world.

A companion for kids is now available. Consider purchasing several and handing them out.

This all complements the many posts I’ve written over the past few months about all the sustainable things technology vendors in manufacturing / industrial markets are doing. It all helps.

Important Smart Factory KPIs

IoT Analytics performs research and analysis from its base in Germany and with affiliated people globally. I have an affiliation with them. Through Microsoft, I discovered this 59-page IoT Signals Report – Manufacturing Spotlight (August 2022), published by Microsoft and Intel, with research conducted by IoT Analytics. As part of this research, IoT Analytics surveyed 500 decision-makers working in discrete, hybrid, or process manufacturing in April and May 2022 and conducted in-depth interviews with a subset of them.

One of the findings from the research tells us 72% of manufacturers have partially or fully implemented a smart factory strategy today. Similarly, nearly two-thirds (65%) are in various stages of implementing their IoT strategy. Although the pandemic, looming recession, inflation, and global supply chain issues have been prevalent topics in the last year(s), manufacturers are determined to fast-track their digital transformation projects in the next three years.

In short

  • When evaluating the success of a smart factory, operational KPIs are important for manufacturers in all regions and industries and across all company sizes.
  • Companies are ambitious to improve supply chain, safety, and sustainability KPIs in the next three years.

Why it matters

  • For manufacturers: The data provide an opportunity to benchmark against industry peers.
  • For technology vendors: Aligning services and products offered with the KPIs that manufacturers prioritize is important.

1. Most important operational KPI: Increase in OEE

All the top five manufacturing KPIs are related to operational goals. Across all regions and industries, respondents are highly focused on improving operational performance, including overall equipment effectiveness (OEE), labor efficiency, and output. The increase in OEE is the most important manufacturing KPI for measuring the success of their smart factory strategies. This KPI is seen as either important or very important by 86% of manufacturers.

2. Most important supply chain KPI: Increase supply chain resiliency

The increase in supply chain resiliency is regarded as important or very important for 73% of manufacturers. The global supply chain issues that were sparked by pandemic lockdowns and (trade) wars have put this manufacturing KPI in the spotlight of many factories. On average, the ambition of manufacturers is to increase supply chain resiliency by 28% in the next three years. Decision-makers see implementing new IoT based technology as a smart way to safeguard themselves from global turbulences.

3. Most important safety KPI: Decrease in reported safety incidents

A decrease in reported safety incidents is regarded by 67% of manufacturers as an important manufacturing KPI in measuring the success of their smart factory strategy. And decision-makers want to act on it. The average ambition of manufacturers is to improve the KPI by 30% in the next three years. Safer employees are happier and more productive employees—not only during the current environment of labor shortage but also otherwise.

4. Most important marketing and sales KPI: Increase in revenue

For 69% of manufacturers, the increase in revenue is an important manufacturing KPI to measure the success of their smart factory strategy. The introduction of new IoT-based technologies does not only affect the operations themselves but also indirectly affects the revenue. Customers expect vendors in discrete and process industries to deliver high-quality, highly customized products on time.

5. Most important sustainability KPI: Reduction of waste

Nearly two-thirds (63%) of manufacturers see the reduction of waste as an integral part of their smart factory transformation. Although sustainability improvements are not the main driver of smart factory strategies, manufacturers are devoting more attention to the topic and often see it as complementary to the existing operational KPIs. Respondents ranked “decrease in waste” as the manufacturing KPI with the second-highest overall ambition and “carbon footprint reduction” as the fastest-accelerating manufacturing KPI. This indicates that respondents recognize the opportunity for tangible improvements and are likely to boost the importance of sustainability KPIs in the coming years. Moreover, improving a sustainability KPI often correlates with improving an operational KPI and vice versa. For example, a reduction in energy usage or waste may lead to a reduction in costs, while an increase in process efficiency may lead to lower energy use and a better carbon footprint.

VC Slowdown Happening Faster for AI Startups

In Q2, VC investment in AI fell by 44%, while overall funding fell by 25%.

One of my few trusted news sites is Morning Brew newsletter and its companion Emerging Tech Brew.

Writer Hayden Field recently posted an article looking at venture investment in Artificial Intelligence. My inbox has swelled with AI this and AI that for some time now. Marketers evidently feel this is a magic word to drive sales while showing the world their company is cool with the latest tech. Of course, Artificial Intelligence (often called neither artificial or intelligent) has been around for decades. Much of the manufacturing software you’ve used for years has AI embedded. So, I’m not surprised at this.

Total VC deal count worldwide has maintained momentum from last year’s record highs, but so far in 2022, “deal value has declined rather significantly across all stages,” according to a PitchBook report—and AI funding in particular is falling faster than the market.

By the numbers:

In Q2 2022, global AI funding plummeted by more than 44% year over year, from $33.6 billion to $18.8 billion, per Pitchbook data shared with Emerging Tech Brew. Over the same period, overall global VC funding fell by 25%, from $176 billion to $131.7 billion. On a quarterly basis, global VC funding for AI and machine learning was down more than 26% between Q2 and Q1, a slightly larger margin than the 20% drop for global VC as a whole.

Same old tech story, how to turn hype to profits.

For years, many VCs believed AI companies would figure out the path to profitability down the road, Shahin Farshchi, a partner at Lux Capital, told us. Today, investors want to see founders give more thought to how, exactly, they’ll build a sustainable business model around AI.