I ran into a long-time acquaintance a couple of weeks ago (before the coronavirus impact) who told me he was all-in investing in Rockwell Automation. The stock had been slowly oscillating between the 170s and 210 for some time. He felt it was destined to keep growing beyond 210.
Note: before retirement, he owned a Rockwell distributorship.
That piqued my interest. When I saw the latest analyst briefing, I took a dive. The transformation of the business is almost startling.
Sales by region must be a bit disappointing as former CEO Keith Nosbusch made it a goal to reduce dependence upon North American markets. For the last year, NA sales are almost 60% of total, with EMEA at 19% and Asia only 14%. However, sales were edging close to $7 billion with a target to top $7 billion this FY. That is good growth.
Breaking out sales by type of industry, hybrid is 40%, process 35%, and discrete at 25%. I imagine if I were to ask 100 people in the industry, more than 90 would guess that Rockwell was still a predominantly discrete automation player.
Showing the general state of manufacturing, Rockwell is strongest in Food & Beverage (20% of sales) followed by Oil & Gas (10%) which is approximate equal in share to automotive. I don’t know if that means the large investment that Nosbusch made in process industry acquisitions is paying off, but it apparently is.
Like many colleagues, I was shocked at the huge valuation Rockwell Automation placed on PTC when it invested $1 billion. But when I saw everything ThingWorx (and the rest of the PTC IoT portfolio) could do–meaning the company could stop many development programs saving a ton of cash–Blake Moret’s (current CEO) move looked very smart.
I like to point out to my close Rockwell acquaintances that I had renamed my site “The Manufacturing Connection” before they announced the “Connected Enterprise” strategy, we both agree that “connections” are where the action is.
Since I’m not an investor in individual stocks, I’m not making any recommendations. But I’d have to say that my old acquaintance is looking pretty smart.
I really liked the old CNN Headline News–from about 20 or more years ago, that is. You could tune in for maybe 15 minutes and get a scan of the relevant news without fluff or spin.
A couple of years ago a new source sprang up online–Axios. It was similar to that old idea. They sent out two daily emails with a quick read of the news–not commentary, not fluff, not spin, but news.
Then last week came this news letter (from the Website). Nothing but idle speculation designed to get your emotions all in an uproar. OK, we already have Fox and MSNBC to do that if we choose. We don’t need it from a site masquerading as news and then pulling the old bait-and-switch.
I’ve seen very few examples of that in our industrial B2B press. There are some experienced analysts who can reliably put a context around some news. But our worst failing is when we limit ourselves to writing about advertisers. I don’t track that, but I imagine it happens even in our world.
We all have different positions growing from upbringing, experiences, sometimes even thinking. But be aware of what you read–whether it merely reinforces prejudices or whether it provides information or guidance for growth. Only in this way can we grow a dialog instead of a shouting match.
In brief: During its brief history as a collection of Hitachi Ltd. data properties, Hitachi Vantara continues to grow and remake itself. It has now added Hitachi Consulting and Intelligent Data Cataloging company Waterline Data. The new company combines IT Infrastructure, Data Management and Analytics.
The first news is the combination of Hitachi Vantara with Hitachi Consulting as one company to create a new digital infrastructure and solutions company.
The new Hitachi Vantara aims to become the world’s preferred digital innovation partner by unlocking the “good” in data that benefits customers, raises the quality of people’s lives and builds a sustainable society. Hitachi Vantara will specifically bring a competitive edge to the digital domains that matter most – the data center, data operations, and enterprise digital transformation.
The new Hitachi Vantara combines the best consulting-led digital solutions and vertical industry expertise of Hitachi Consulting with Hitachi Vantara’s IT domain expertise. Going forward, the integrated company will help customers develop practical, scalable digital strategies and solutions that transform operational processes, improve customer experiences and create new business models to drive innovation and growth.
For example, the new company will offer a holistic manufacturing industry practice as one of several vertical industry practices. The manufacturing practice will integrate consulting methodologies for addressing quality, customization, sustainability and new business models with data-driven solutions such as Lumada Manufacturing Insights from Hitachi Vantara, which integrates silos of manufacturing data and applies AI and machine learning to evaluate and enhance overall equipment effectiveness (OEE).
“A barrage of data and technology is disrupting enterprises and industries the world over,” said Toshiaki Tokunaga, chief executive officer and chairman of the board, Hitachi Vantara. “Through the integration of Hitachi Consulting, the new Hitachi Vantara will be uniquely equipped with the capabilities our customers need to guide them on their digital journeys. We’re going to be the company that helps customers navigate from what’s now to what’s next.”
The Hitachi Vantara portfolio is built upon a foundation of world-class edge-to-core-to-cloud infrastructure offerings, including the recently introduced Hitachi Virtual Storage Platform (VSP) 5000 series, the world’s fastest data storage array. The portfolio further features AI and analytics solutions, cloud services for application modernization, systems integration and change management services for SaaS-based ERP implementations and migrations, and Lumada-based digital industrial solutions. Hitachi Vantara’s offerings are all backed by world-class business consulting, deep experience in improving organization effectiveness, co-development capabilities and global delivery services.
With its expanded capabilities, the new Hitachi Vantara will play a key role in advancing Hitachi’s 2021 Mid-term Management Plan, which aims to make the company a global leader through “Social Innovation Business.” The Social Innovation Business strategy centers on combining Hitachi’s industrial and IT expertise and products to create new value and resolve social issues.
Hitachi Vantara will help advance the plan by expanding revenues from digital business, by digitally transforming Hitachi’s industrial businesses, by fueling international growth, and by delivering social, environmental and economic value which helps customers contribute to the attainment of United Nations’ Sustainable Development Goals.
As announced in September 2019, Toshiaki Tokunaga, a 30-year Hitachi veteran who has successfully transformed several Hitachi businesses, will serve in the dual role of chief executive officer and chairman of the board of Hitachi Vantara.
The company’s two business units, Digital Infrastructure and Digital Solutions, will be led by Presidents Brian Householder and Brad Surak, respectively. Hitachi Vantara today also announced details of other appointments to its executive leadership team.
Hitachi Vantara Will Integrate Advanced Data Cataloging Technology Into Lumada Data Services Portfolio
In further news, Hitachi Vantara announced acquisition of the business of Waterline Data, which is headquartered in Mountain View, CA. It provides intelligent data cataloging solutions for DataOps that help customers more easily gain actionable insights from large datasets and comply with data regulations such as GDPR.
Waterline Data delivers catalog technology enabled by machine learning (ML) that automates metadata discovery to solve modern data challenges for analytics and governance across edge-to-core-to-cloud environments. Waterline Data’s technology has been adopted by customers in the financial services, healthcare and pharmaceuticals industries to support analytics and data science projects, pinpoint compliance-sensitive data and improve data governance. It can be applied on-premises or in the cloud to large volumes of data in Hadoop, SQL, Amazon Web Services (AWS), Microsoft Azure and Google Cloud environments.
Waterline Data’s patented “fingerprinting” technology is the cornerstone of its solutions, removing one of the biggest obstacles to data lake success. Fingerprinting uses AI- and rule-based systems to automate the discovery, classification and analysis of distributed and diverse data assets to accurately and efficiently tag large volumes of data based on common characteristics.
Integrating Waterline Data technology with Hitachi Vantara’s Lumada Data Services portfolio will provide a common metadata framework to help customers break down data silos distributed across the cloud, the data center, and the machines and devices at the edges of their networks. By applying DataOps methodologies to the unified datasets, customers can more rapidly gain insights and drive innovation.
“Our research illustrates that almost half of enterprise data practitioners are spending more than 50% of their time simply trying to find and prepare data for analysis. Data catalog products have emerged in recent years as strategic imperatives for enterprises seeking to address this challenge while also improving data governance,” said Matt Aslett, research vice president, 451 Research. “This acquisition is logical and strategic: Waterline Data’s capabilities are a complementary fit for Hitachi Vantara and its Lumada Data Services portfolio. Adding Waterline Data furthers the company’s ability to address growing demand for products and services that deliver more agile and automated approaches to data management via DataOps: helping enterprise consumers of data ultimately leverage information in a fluid, yet governed way.”
“Hitachi Vantara provides customers with the digital building blocks, DataOps approaches and industry solutions they need to transform their organizations through data-driven insights,” said Brad Surak, president, Digital Solutions, Hitachi Vantara. “Waterline Data technologies complement Hitachi Vantara’s DataOps expertise and will become key offerings in the Lumada Data Services portfolio, bringing our customers greater visibility, tighter quality control, improved compliance and better management of their data.”
Financial terms of the transaction were not disclosed. The acquisition of Waterline Data is subject to customary closing conditions and it is expected to close in the fourth quarter of Hitachi’s fiscal year 2019 (ending March 31, 2020).
Upon completion of the acquisition, Hitachi Vantara will make Waterline Data technologies available as standalone solutions as well as integrated components of the Lumada Data Services portfolio.
20 METATRENDS FOR THE ROARING 20S
Everybody it seems likes metatrends, megatrends, any-kind-of-trends, especially at the beginning of a calendar year. I think that many of these are good idea stretchers. Whether or not they serve as accurate predictors does not matter. People are working on many projects and ideas that will yield something in the future.
Peter Diamandis publishes an Abundance newsletter, preaches Abundance thinking, did the X-prize, and many more futuristic stretch-the-mind ideas.
I lifted the following introduction to his latest newsletter “20 Metatrends For the Roaring 20s.” I recommend visiting the website and thinking through these ideas. He is an abundant optimist about technology. I’m afraid that I’ve been around too many MBAs and marketers. So his idea that someday the Alexa’s and Siri’s of the world will be our loyal servants freeing us from advertising influence pushes aside the factor that these technologies are being developed by companies who survive on advertising. It will be interesting to see how this one plays out.
In the decade ahead, waves of exponential technological advancements are stacking atop one another, eclipsing decades of breakthroughs in scale and impact.
Emerging from these waves are 20 “Metatrends,” likely to revolutionize entire industries (old and new), redefine tomorrow’s generation of businesses and contemporary challenges, and transform our livelihoods from the bottom-up.
Among these metatrends are augmented human longevity, the surging smart economy, AI-human collaboration, urbanized cellular agriculture, and high-bandwidth brain-computer interfaces, just to name a few.
It is here that master entrepreneurs and their teams must see beyond the immediate implications of a given technology, capturing second-order, Google-sized business opportunities on the horizon.
Welcome to a new decade of runaway technological booms, historic watershed moments, and extraordinary abundance.
Despite use of the word disruptive in a significant number of press releases, I expect few, if any, truly disruptive manufacturing technologies. Things simply take some time from conception to adolescence to maturity. Products I’ve seen that looked disruptive often didn’t make it due to executive incompetence or lack of vision (same thing).
Watching the flow of press releases and conversations from technology developers, here are a few thoughts for the near future.
I expect to see Additive Manufacturing (3D Printing) increasingly integrated as part of overall manufacturing process. The process is getting stable and tolerances are becoming tighter. More than just for manufacturing obsolete parts for service, it will become simply another tool in the discrete manufacturing process.
One non-technology trend that is happening now and I expect it to become nearly ubiquitous except maybe in the “laggard” companies concerns management making a concerted effort to break down department silos and foster teams–not a technology thing but a people thing. Looking at technology for the infamous IT/OT convergence is like looking for a vegetarian in a pork processing factory.
Everyone talks around Artificial Intelligence (AI) as if either the utopian or dystopian future is at hand. Yet when I analyze the opinions, real knowledge of AI is scarce. I expect ever increased integration of Machine Learning and Neural Net technology into automation and operations workflow. We most likely won’t even realize it. Just as my generation brought PCs into businesses and manufacturing first almost as a gimmick and then a generally used tool, Alexa or Siri for manufacturing workflow will just be there.
Improved data analysis leading to improved interactive visualization including AR. I put a lot in this sentence. For a reason. I think data collection, analysis, and visualization are tied together. Why collect data if we don’t run it through some analysis filters and then use it? How do we prepare data for utility unless we continually develop useable visualization? And Augmented Reality might become part of that visualization solution. The jury is still out there.
The entry of major IT players deeply into manufacturing at the OT as well as IT area brings with it more power and connectivity in edge devices. This circumventing of the Purdue Model will continue unabated. We see the major automation players realizing that the automation and control systems are not the ideal gateway for all (just some) process data to enterprise decision-making systems and either partnering or developing for the edge.
It goes without saying that cyber security is becoming more core to engineering at the manufacturing OT level. A press release just came through announcing Rockwell Automation is acquiring an Israeli security company. Expect to see more of that.
One more thing concerns the way software and service are now being bought and sold. And also hardware in many respects. For software, the trend, perhaps begun by Inductive Automation some 16 years ago (note: it is a sponsor), to not buying seat licenses but of buying usage or software-as-a-service is spreading—finally. A stable cloud helps. The experience of Salesforce propelled the idea. This year Hewlett Packard Enterprise put far more than its toe in the water.
I enjoy interviews, but seldom just take random comments through PR people, but a timely email regarding ideas from Gary Brooks, CMO at Syncron that a combination of technology and flexible consumption plans are propelling Product-as-a-Service fits this mold. I first heard of this idea seriously somewhere around 1998. Customers now expect it.
Last, but maybe first, is the pursuit of sustainable products and processes. I wrote several articles and commissioned others about this way back when I was at Automation World. Recently I heard iPod, iPhone, Nest developer Tony Fadell (@tfadell) on the Tim Ferriss (@tferriss) podcast. It was a great interview worth listening to in its entirety. But his passion was really aroused when he talked about his research into sustainable packaging—eliminating plastics.
Brooks also mentioned sustainability.
This is an area I have shirked for a while. Perhaps I’ll start up a newsletter or something (great if I could get a sponsor) to further this discussion from our point of view. With so many billions of humans in the world, our impact on the environment is cumulative and wreaking havoc.
What should I be adding?
Top Tens and Top Twenties of the past or future year have never been my favorites. However, one can perceive trends and strain out little nuggets of gold by scanning several. Especially industrial taken broadly along with Internet of Things (IoT) and other current digital trends. I just had an interesting chat with Sean Riley, Global Director of Manufacturing and Transportation for Software AG, who released his Top Ten for 2020.
Following are his ideas interspersed with a few of my comments.
Cost Management Becomes Exceptional
As uncertainty enters the global manufacturing outlook, enterprises will become myopically focused on cost reductions. This will drive organizations to find more efficient methods of providing IT support, leveraging supplier ecosystems and simplifying value chains. [GM-much of my early work was in cost management/reduction; this is a never-ending challenge in manufacturing; however, tools continue to evolve giving us more and better solutions.]
A Blurred Line Between Products & Services
Manufacturers continue their product innovation quest and more manufacturers will begin focusing on how to deliver products as a service. The Manufacturers that have already created smart products and have elevated service levels will now begin to work out the financing considerations needed to shift from a sales based to a usage based revenue model. [GM-This is a trend most likely still in its infancy, or maybe toddler-hood; we see new examples sprouting monthly.]
Moving To Redefine Cost Models To Match Future Revenue Streams
Anticipating the shift to continual revenue streams, manufacturers will seek to shift costs to be incurred in a similar manner. This will be initially seen as a continued push to subscription based IT applications. While much progress has already been made, a larger focus will occur. [GM-I like his idea here of balancing capital versus expense budgets, continually finding the best fund source for shifting costs.]
IT Focuses on Rapid Support for Growth
The lines between business and IT users become blurred as no-code applications allow for business users to create integration services. IT professionals will leverage DevOps & Agile methodologies alongside of microservices and containers to rapidly develop applications that are able to generate incremental growth as requested by business users. This will be critical to the near term success for manufacturers, especially with economic headwinds that seem to be growing stronger. [GM-I didn’t ask about DevOps, but this idea is springing into the industrial space; cloud and software-as-a-service provide scalability both up and down for IT to balance costs and services.]
Industrial Self-Service Analytics Become Mission Critical
Industrie 4.0 / Smart Manufacturing initiatives continue to receive greater amounts of investment but in the near term, manufacturers will focus on unleashing the power of the data they already have. Historians, LIMS, CMMS’ have valuable data going to and in them and enabling production engineers to leverage that data rapidly is critical. Industrial Self-Service Analytics that allow production and maintenance professionals to leverage predictive analytics without IT assistance will sought as a powerful differentiating factor. [GM-we are beginning to see some cool no-programming tools to help managers get data access more quickly.]
Industrie 4.0 / Smart Manufacturing Initiatives Continue to Draw Investment
It’s no surprise that Manufacturers will continue to invest in Industrie 4.0 as the promises are great however, the scaled returns have not been realized and won’t be realized in the near term. The difficult of implementing these initiatives has surpassed manufacturers expectations for several reasons. First, traditional OT companies were trusted to deliver exceptional, open platforms and that wasn’t delivered. Secondly, collaboration efforts between IT & OT professionals proved to be more convoluted and difficult than expected. [GM-I’m thinking these ideas became overblown and complex, and that is not a good thing; to swallow the whole enchilada causes stomach pain.]
Artificial Intelligence Enters the Mix
AI won’t allow for users to sit back and relax while AI handles all of their tasks for them but it will make an appearance in back office tasks. Freight payment auditing, invoice payment and, in some select areas, chatbots will be the initial main stream uses of AI and will be seen as not becoming an anomaly but be understood to be more mainstream this year. [GM-I think still an idea looking for a problem; however some AI ideas are finding homes a little at a time.]
3D Printing Find New Uses
While this technology has steadily crept into production lines, the push towards usage based product pricing will have the technology move into after market services. Slow moving parts will be the first target for this technology which will help to free up much needed working capital to support financial transformation. [GM-watch for better machines holding tighter tolerances making the technology more useful.]
5G & Edge Analytics Enable New Possibilities
As Industrie 4.0 is continued to be pursued, Manufacturers will implement new initiatives that could not previously be realized without the high speed data transmission promises of 5G or the ability to conduct advanced analytics at the edge where production occurs. This will also provide manufacturers with new methods to securely implement Smart Manufacturing initiatives and in new locations that were not previously feasible due to connectivity issues. [GM-5G is still pretty much a dream, but there is great potential for some day.]
Security Still Remains a Critical Focus
With the increasing rate of IoT sensors, IT-OT convergence, the usage of API’s and the interconnectivity of ecosystems ensuring data security remains a top priority for manufacturers. As more data becomes more available, the need to increase levels of security becomes ever greater. [GM-ah, yes, security–a never-ending problem.]