Claroty has been busy. Following the news of investments and partnership with Rockwell Automation, Claroty and Siemens announced a global partnership. Siemens will leverage Claroty’s advanced behavioral analysis technology in Siemens’ recently announced Industrial Anomaly Detection solution.
Siemens, through its global venture firm Next47, also invested in Claroty, joining a global syndicate of industrial giants that invested $60 million in the company’s Series B round, bringing the company’s total investment to date to $93 million.
Siemens initiated the Charter of Trust in February 2018, gaining the support of other giant companies in the global fight against the rising cybersecurity threat to industrial systems. Siemens also continues to expand its cybersecurity portfolio, debuting at the 2018 Hannover Messe industrial automation conference a new Industrial Anomaly Detection solution, which will deliver significant value for both operations and cybersecurity teams. Operations teams receive a detailed inventory of industrial assets and changes to the network. Cybersecurity teams can continuously monitor these critical networks for vulnerabilities, malicious activity, and high-risk changes, across distributed industrial sites.
Claroty was selected by Siemens following an intensive technical evaluation. “In selecting our security partner for Industrial Anomaly Detection, we reviewed the market, conducted a detailed evaluation, and rigorously tested possible technology in our industrial lab environment,” said Dr. Thomas Moser, CEO of the Siemens Customer Services business unit. “Claroty’s advanced behavioral analysis provides a significant advantage to our customers in reducing risk to their OT environment.”
“Our mission is to help our customers secure industrial networks so they can avoid costly operations downtime, and maintain the safety of people and expensive assets,” said Amir Zilberstein, Claroty Co-founder and CEO. “Siemens’ selection of Claroty as a strategic partner and their investment in our company is further validation of our technology, our team, and our ability to deliver world-class, enterprise-level protection.”
Siemens uses Claroty in a pre-packaged offering enabling customers to quickly and safely deploy anomaly detection in their operations. Siemens brings the offering to the market based on pre-installed packages on Siemens IPC. In the future, it is planned to also offer this based on Siemens switches with an Application Processing engine provided by the Ruggedcom RX1500 series.
Siemens, as owner and operator of nearly 300 factories, heavily leverages digitalizing for efficiency gains. Responsible digitalization must go hand in hand with cybersecurity. Therefore, Siemens is implementing a defense-in-depth security concept in its factories. Industrial Anomaly Detection is an important element of this concept.
The Claroty Platform is comprised of multiple integrated products, built on Claroty’s advanced CoreX technology. The products provide the full range of cybersecurity protection, control, detection, and response. Claroty has received multiple industry awards in recent months. It was recently named an Energy Innovation Pioneer at CERAWeek 2018, and the company’s flagship Continuous Threat Detection product won the ICS Detection Challenge during the S4x18 conference in Miami.
So I decided not to make a cross country trip to San Diego for Rockwell Automation’s RATechEd event this year. I have cross country trips coming up the next two weeks followed by family time. So, I’m doing a one-day business trip plus taking my wife out for dinner in Chicago this week. Anyway, they had informed me that they wouldn’t be setting up interviews but that I’d be welcome to sit in any sessions I wanted. I passed.
Then I see a tweet from PTC today. Blockbuster news. Rockwell Automation’s Connected Enterprise just became connected. It has invested $1B in PTC for an approximate 8% ownership. PTC has [ERP], PLM, and IIoT (Kepware and ThingWorx). By connecting with these technologies, Rockwell now has the possibility of a technology convergence rivaling its rivals in Europe.
There are three of my questions about Rockwell answered:
- Other than a refreshing change of culture, what else was Blake Moret going to do to put his stamp on the company?
- When was Rockwell Automation going to really connect the enterprise like its slogan has held for several years (about the time I came up with Manufacturing Connection for the new title for my blog)?
- How was Rockwell going to answer the digital manufacturing and Industry 4.0 moves made by its European competitors Siemens, Schneider Electric, and ABB?
This is far from an acquisition and just a partnership right now. But it is a big step in the right direction.
Here is the press release I downloaded from Business Wire.
PTC Inc. and Rockwell Automation, Inc. today announced that they have entered into a definitive agreement for a strategic partnership that is expected to accelerate growth for both companies and enable them to be the partner of choice for customers around the world who want to transform their physical operations with digital technology.
As part of the partnership, Rockwell Automation will make a $1 billion equity investment in PTC, and Rockwell Automation’s Chairman and CEO, Blake Moret, will join PTC’s board of directors effective with the closing of the equity transaction.
The partnership leverages both companies’ resources, technologies, industry expertise, and market presence, and will include technical collaboration across the organizations as well as joint global go-to-market initiatives. In particular, PTC and Rockwell Automation have agreed to align their respective smart factory technologies and combine PTC’s award-winning ThingWorx IoT, Kepware industrial connectivity, and Vuforia augmented reality (AR) platforms with Rockwell Automation’s FactoryTalk MES, FactoryTalk Analytics, and Industrial Automation platforms.
“This strategic alliance will provide the industry with the broadest integrated suite of best-in-class technology, backed by PTC, the leader in IoT and augmented reality, and Rockwell Automation, the leader in industrial automation and information. Our combined customer base will benefit from two world-class organizations that understand their business and deliver comprehensive, innovative, and integrated solutions,” said Jim Heppelmann, President and CEO, PTC. “Leveraging Rockwell Automation’s industry-leading industrial control and software technology, strong brand, and domain expertise with PTC’s award-winning technology enables industrial enterprises to capitalize on the promise of the Industrial IoT. I am incredibly excited about this partnership and the opportunity it provides to fuel our future success.”
Blake Moret, Chairman and CEO, Rockwell Automation, said, “We believe this strategic partnership will enable us to accelerate growth by building on both companies’ records of innovation to extend the value of the Connected Enterprise and deepen our customer relationships. As IT and OT converge, there is a natural alignment between our companies. Together, we will offer the most comprehensive and flexible IoT offering in the industrial space. Our equity investment in PTC reflects our confidence in the partnership and the significant upside we expect it to create for both companies as we work together to profitably grow subscription revenue.”
Rockwell Automation’s solutions business will be a preferred delivery and implementation provider, supported by a robust ecosystem of partners that both companies have established. The strength of both companies across geographies, end markets, and applications is complementary.
Under the terms of the agreement relating to the equity investment, Rockwell Automation will make a $1 billion equity investment in PTC by acquiring 10,582,010 newly issued shares at a price of $94.50, representing an approximate 8.4% ownership interest in PTC based on PTC’s current outstanding shares pro forma for the share issuance to Rockwell Automation. The price per share represents an 8.6% premium to PTC’s closing stock price on June 8, 2018, the last trading day prior to today’s announcement. Rockwell Automation intends to fund the investment through a combination of cash on hand and commercial paper borrowings. Rockwell Automation will account for its ownership interest in PTC as an Available for Sale security, reported at fair value.
The 2018 EY Industrial Products Survey was conducted among 500 Industrial Products (IP) executives whose businesses yield over $1B in annual revenue. These surveys are coming in with similar results. You can look at the results and say “Wow, almost half of executives at these companies see innovation as important, or see technology as important” or “How can half of all executives surveyed not see how important innovation is”.
I’ve had experience in manufacturing and marketing leadership and have studied it for many more years—and I lay most of the problems with manufacturing business squarely with (lack of) managerial leadership. I see these results and think that there will be many winners and just as many losers in the coming years.
The study surveyed executives from a variety of sectors including, aerospace and defense, industrial and mechanical components, machinery and electrical systems, chemicals and base materials, packaging and paper and wood. The survey was conducted between February 22, 2018 and March 22, 2018. The purpose of the study was to evaluate where IP companies fall on their journey towards continuous innovation.
Move over R&D: IP companies see digital technology and innovation as their path to success
- 48% Percentage of respondents who view innovation as quite/extremely important for company success
- 43% Percentage of businesses who are learning from and/or following the technology industry to influence innovation at their company
- 67% Percentage of companies who plan to make significant levels of investment in innovation past traditional R&D over the next three years
- 52% Percentage of businesses that say the adoption of emerging technologies will be quite important or critical to the success of their business in the next three years
Additional results from the survey include:
Facing a culture crisis: The perception of the IP industry is hindering the talent search
- 67% agree/strongly agree that the image of the industrial products industry hurts when recruiting for needed skills
- 38% that difficulty competing with tech-first companies for top talent is a leading barrier in filling the skills gap
- 25% say that attracting/retaining top talent is one of the biggest drivers of their company’s technology investment
- 64% agree/strongly agree that the IP industry needs to change their culture to thrive
IP is looking for outside inspiration. While the tech industry is the leading source, IP has a ways to go
- 43% of respondents are learning from and/or following the technology industry to influence innovation at their company
- Only 29% of business say they are extremely or quite innovative compared to close competitors
- 82% of respondents have made minimal or no investment in AI today
- 22% are learning from and/or following the automotive industry to influence innovation at their own company
- 21% are learning from and/or following the consumer products industry to influence innovation at their own company
Robotics, mobile and big data, oh my! What is getting the largest share of investment attention?
- 63% of respondents say that technology investments have driven measureable returns in agility to a significant/meaningful extent
- 46% are making substantial or major investments in robotics and 56% predict they will in the next three years
- 31% of businesses are increasing investment in emerging technologies in response to US tax reform
- 31% says that big data/analytics will be most influential on their business over the next three years
Not a matter of if but when disruption will hit. IP companies are staying nimble in order to prepare
- 49% of businesses say that preparation for disruption will be quite important or critical to the success of their business in the next three years
- 52% of businesses say that flexibility to adapt to trends will be quite important or critical to the success of their business in the next three years
- 53% of businesses say that access to specialized skills for emerging tech will be quite important or critical to the success of their business in the next three years
Taiwan-based Advantech’s leaders have always been intellectual strategic thinkers. They have clued me in on several good management books. The company is an industrial computer company with industrial data acquisition and I/O devices that has successfully positioned itself as an edge device leader in the Internet of Things space.
The company has announced its strategies for entering the next phase of IoT development. To expand local operations, Advantech will fully activate the deployment of branch locations throughout various regions. In addition, a co-creation model will be adopted to construct the Industrial IoT (IIoT) ecosystem and strengthen the influence of vertical domains.
Advantech’s Executive Director of the Board, Chaney Ho, stated that since taking over as executive director last year, he has been focusing on developing regional strategies and establishing development goals and directions for each region, all of which are based on their scope.
In regions with a larger scope (Europe, United States, and China), to reinforce the Advantech brand recognition in IoT and Industry 4.0, talent cultivation and an increased presence in local sales are the company’s primary goals to actively respond to recent developments in Industry 4.0 trends in the EU, plans by the U.S. government to shift production back to America, and the China One Belt One Road policy.
For medium and small-scale regions, Mr. Ho stated that Advantech will develop Japan, South Korea, India, and Russia to generate $130 million in revenue. The company also plans to further increase investment in Malaysia and Thai IIoT organizations and new branch locations in Vietnam, Russia, and Turkey will be established through mergers and acquisitions as well as joint ventures.
Regarding developments in the European region, Miller Chang, President of Advantech’s Embedded-IoT (EIoT) Group, expressed that a sector-lead strategy has been practiced by the EIoT group since 2014. Various product divisions from headquarters have been fully connected with overseas frontline business teams and compound annual growth rate from 2014 to 2017 has reached 25%.
Key development points for the next three years in Europe are:
1. Elevating operation levels in five key regions, the UK, France, Germany, Italy, and the Netherlands.
2. Establishing branch offices in emerging European regions for conducting business and providing technical support.
3. Focusing on key industries, such as gaming, medical, transportation, and automotive, in Germany, UK, and the Netherlands.
With respect to development in the Greater China Region, Linda Tsai, President of Advantech’s IIoT Group, believes that the embedded systems/hardware from Phase I IOT development as well as IoT solutions platforms from Phase II are Advantech’s “double-growth engine” in IIoT development. Following this, three key strategies have been proposed.
1. Implement and IIoT sector-lead organizational development model expanding industry management and optimize regional resource allocations,
2. Set successful examples in the Greater China Region to accelerate the marketing of hardware/software and imaging solutions.
3. Actively cultivate local personal to become mid-to-high level supervisors to expand into the Chinese market.
Fantine Lee, Manager of Advantech’s Corporate Investment Division, pointed out that Advantech will continue to actively promote platform management during Phase II IoT development, SRP co-creation, and the co-created digital transformation of vertical industry cloud services during Phase III through the co-creation model. As for vertical industry, cloud service companies to be co-created during Phase III, Advantech plans to establish subsidiaries in Taiwan and China and will include domains such as Smart Manufacturing, Smart Environmental Protection, and Smart Retail. These companies will be managed together with Advantech’s co-creation partners. Furthermore, opportunities in other domains, such as Smart Hospitals, Smart Factories, Industrial Vision Systems, Consultant Training, and Integration Services will continue to be promoted and co-created.
Miss Lee further stated for Phase II development, Advantech’s WISE-PaaS cloud platform will serve as the foundation for building a comprehensive value chain for SRPs. This year, third-party software and WISE-PaaS platform integration with SaaS suppliers and collective sales/agents will be introduced at an accelerated pace. In addition, partnerships with software developers specializing in monitoring and diagnosing connected equipment, energy management, data analysis, machine learning, and other vertical industries will be established.
Much time was devoted last week at Dell Technologies World to Dell’s Legacy of Good highlighting people and companies doing some really cool and worthwhile things. I’m especially impressed with the AeroFarms people (see photos below) who are using IoT to find a better way to grow wholesome vegetables. Hey engineers–maybe there’s a thought in here to spark your next creative interest.
Let me take you on a photo journey through the prominent booth at the DT World Expo floor highlighting a number of projects.
Plastic waste floating in the ocean is fast becoming an environmental catastrophe. Here is someone doing something about it.
How about genetic mapping improvements for fighting rare diseases?
A bug’s eye view with drones to help the honeybee population.
All kinds of wild robot science fiction stories are hitting main-stream media. How about a reality check?
Oh, another main-stream media hype fest–AI. In reality is can be a boost to business not in a scary way.
Here is a manufacturing product lifecycle story.
And the AeroFarms story.