by Gary Mintchell | Apr 20, 2018 | Internet of Things, News
Partnerships are huge. Especially with industrial automation and software suppliers extending their reach into the enterprise. Here, press releases from rivals Rockwell Automation and Siemens exemplify the pattern. Additionally, this week, I’ve also interviewed Cisco and Intel. Things are getting interesting this spring. We’ll see what I can report back from next week’s Hannover Messe.
Rockwell Automation and Cisco have released new network design guides and white papers to help companies connect mobile devices and deploy end-to-end cloud connectivity while maintaining security best practices. The guides give companies best practices for wired and wireless network architectures when deploying cloud and mobile industrial IoT solutions. The free resources are the latest addition to the Converged Plantwide Ethernet (CPwE) program.
Secure Mobile Connections
The new Identity and Mobility Services guide will help companies connect mobile devices in a way that manages security risks. The guide, based on the Cisco Identity Services Engine platform, supports industrial security by identifying, authorizing and posturing mobile connections at three levels: device, application and user. The guide also helps users establish unified and autonomous WLAN architectures and manage self-service wireless access.
“Mobile devices are changing how we see and manage production,” said Gregory Wilcox, global technology and business development manager, Rockwell Automation. “Workers are accessing analytics on tablets to make better production decisions, even when they’re away from equipment. And they’re using innovations like the FactoryTalk TeamONE app from Rockwell Automation to collaborate through their smartphones. The Identity and Mobility Services guide will help bring these capabilities to life in their facilities while maintaining a strong security stance.”
Connect to the Cloud
The new Cloud Connectivity guide provides guidance for using the FactoryTalk Cloud gateway to establish a more secure connection from the plant floor to cloud-based applications, like FactoryTalk Analytics for Machines. This end-to-end connectivity is essential to deploying capabilities like remote monitoring and support. The design guide addresses the varying levels of security measures that should be considered for small to large companies.
“Industrial companies sometimes focus a lot of their attention on creating an information pathway to the cloud but overlook critical security needs,” said Todd Gurela, senior director, Industry Solutions Group, Cisco. “The Cloud Connectivity design guide will help companies establish end-to-end cloud connectivity while protecting both data paths and the plant network against cyber threats.”
Meanwhile Orange and Siemens
Orange Business Services and Siemens have joined forces to drive the adoption of the Internet of Things (IoT) in the industrial sector by simplifying integration and promoting IoT innovation. The initial focus will be to develop solutions around asset tracking and asset monitoring to optimize the supply chain and improve efficiencies, as well as to develop digitally enhanced products to increase customer satisfaction and create new business models.
The partnership will help businesses connect their machines and physical infrastructure to the digital world, allowing them to translate the wealth of data they produce into business results. Advanced analytics and digital services will help them increase productivity and efficiency across their business.
Orange Business Services brings its global cellular connectivity, consulting, system integration and application development skills to the partnership. The alliance is built around Siemens’ MindSphere, the cloud-based open IoT operating system, and Datavenue, the Orange IoT and data analytics modular offering.
Customers have the option of pre-packaged offerings such as asset tracking, or customized solutions and applications. Orange Business Services will initially provide connectivity components from Datavenue, including cellular and Low Power Wide Area (LPWA) networks. Other Datavenue components will follow.
The partnership will initially focus on Europe, starting with solutions to be rolled out in Germany and Austria.
by Gary Mintchell | Feb 12, 2018 | News
A tale of the business state of two industrial technology supplier companies–GE and ABB.
This is a great article tracing the heritage and woes of GE. While the company is still strong in all the basic industrial categories, it’s moves deeper in to financial and entertainment industries have cost it dearly. Not to mention decades of financial sleight-of-hand. When I was at Minds + Machines last fall, I wondered if this might be the last. The new CEO hinted at changes in GE Digital at the conference. Shortly afterwards, the shoe dropped. GE Digital was to be essentially gutted. No more grandiose plans for a huge software platform that would be the solution of everything digital. Smaller applications and partnerships were to be the new direction. There will be some GE people at ARC this week, I’ll see what else I can learn.
Meanwhile, ABB released its full year 2017 financial results. It has been in the midst of restructuring since Ulrich Spiesshofer assumed the reins in 2013 succeeding GE alum Joe Hogan. ABB touts its progress in this report.
Ulrich Spiesshofer, ABB CEO
“In the transition year 2017, we shaped a streamlined and strengthened ABB. Now, our digital-first portfolio for customers in utilities, industry and transport and infrastructure is based on two clear value propositions: bringing electricity from any power plant to any plug, and automating industries from natural resources to finished products,” said Spiesshofer. “The annual results include the dampening effect of our massive transformation. With our targeted actions to shift our center of gravity, we have improved competitiveness, addressed higher-growth segments and de-risked ABB. We delivered four consecutive quarters of increasing base-order growth. The momentum we have built in 2017 positions us for profitable growth as the global markets are improving. Today’s proposal to increase the dividend for the 9th consecutive year demonstrates our confidence in the future.”
Full-year 2017 Group Results
ABB delivered a steady financial performance in 2017 despite market headwinds and its ongoing transformation. Total orders were steady (steady in US dollars). Base-order growth (base orders are classified as orders below $15 million) showed increasing momentum each quarter, and for the full year increased 5 percent (6 percent in US dollars), mitigating the effect of lower large orders. The large order share of total orders in 2017 was 8.5 percent, versus 13.5 percent in 2016, in part as a consequence of ABB’s business model shift. Total service orders grew 8 percent (8 percent in US dollars) to 20 percent of total group orders.
The order backlog at the end of December 2017 was $22,414 million, 4 percent lower (2 percent in US dollars) compared with the prior year. The book-to-bill ratio2 was 0.97x for 2017, compared with 0.99x in 2016.
Revenues improved 1 percent (1 percent in US dollars) to $34,312 million, with positive contributions from Electrification Products and Robotics and Motion more than offsetting the declines in Industrial Automation and Power Grids. Total services revenues grew 3 percent (3 percent in US dollars) and now stand at 18 percent of total group revenues.
ABB executed on its Next Level strategy throughout 2017. The company launched ABB Ability, its digital solutions offering, and continued to invest in digital, sales, branding and research & development. It delivered strong cost savings in White Collar Productivity and supply chain/operational excellence and completed or announced a number of important transactions. It continued to de-risk its portfolio by divesting non-core businesses, and taking actions to implement its EPC (Engineering, Procurement and Construction) business model change. These activities impacted full year results. The company’s operational EBITA declined 2 percent (1 percent in US dollars) to $4,130 million, inclusive of approximately $140 million of charges related to the EPC businesses. The reported operational EBITA margin was 12.1 percent, 30 basis points lower due to charges related to the EPC businesses and would have been steady without these charges.
Net income in 2017 rose 17 percent compared with the previous year to $2,213 million, reflecting primarily lower transformation-related restructuring and restructuring-related expenses and net gains recorded on the business divestments in the year. Basic earnings per share grew 17 percent to $1.04. Operational EPS2 was $1.25, 1 percent lower in constant currency4
Cash flow from operating activities was steady compared with 2016 at $3,799 million for the full year. ABB continued to benefit from improvements in net working capital which generated approximately $600 million of cash during 2017. Net working capital as a percentage of revenue was reduced to 11.3 percent, a 10 basis point improvement year on year. Capital expenditures for the group were $949 million during 2017. Free cash flow of $2,926 million was 5 percent lower than 2016 and the company’s cash return on invested capital (CROI) was 12.4 percent2, mainly impacted by the acquisition of B&R.
by Gary Mintchell | Sep 27, 2017 | Automation, Standards
This article appeared in TechCrunch. It’s pretty IT oriented, but the thoughts are relevant for the OT world, too.
The author, Ron Miller, reported that Amazon’s AWS move to join an industry standard on a technology known as containers signals the importance of standards.
Get Smart: Standards develop in a number of ways. Not all of them are ISA or ISO or IEC, although these definitely have a place. An industry leader once told me, “Gary, the best industry standards are de facto standards.” These are the ones that build a critical mass among users and developers and that solve real problems.
When AWS today became a full-fledged member of the container standards body, the Cloud Native Computing Foundation, it represented a significant milestone. By joining Google, IBM, Microsoft, Red Hat and just about every company that matters in the space, AWS has acknowledged that when it comes to container management, standards matter.
Does this sound familiar to the industrial automation market? AWS has been known to go the proprietary route, after all. When you’re that big and powerful, and control vast swaths of market share as AWS does, you can afford to go your own way from time to time. Containers is an area it hasn’t controlled, though. That belongs to Kubernetes, the open source container management tool originally developed inside Google.
What does it take for standards to win? Once it recognized Google’s dominance in container management, the next logical step was to join the CNCF and adhere to the same container standards the entire industry is using. Sometimes it’s better to switch than fight, and this was clearly one of those times.
The reason for standards. Standards provide a common basis for managing containers. Everyone can build their own tools on top of them. Google already has when it built Kubernetes, Red Hat has OpenShift, Microsoft makes Azure Container Service — and so forth and so on.
As for end users: Companies like standards because they know the technology is going to work a certain way, regardless of who built it. Each vendor provides a similar set of basic services, then differentiates itself based on what it builds on top.
Benefits for all: Technology tends to take off once a standard is agreed upon by the majority of the industry. Look at the World Wide Web. It has taken off because there is a standard way of building web sites. When companies agree to the building blocks, everything else seems to fall into place.
by Gary Mintchell | Aug 14, 2017 | Marketing, Technology
(Photo by Alberto Brea)
Technology isn’t the business disrupter. How we use technology is. I was reading the marketing blog of Bryan Kramer, whom I’ve met at various Dell Technology events. He posted this photo thinking about marketing and business.
Look at our business in industrial automation in the USA. Everyone complains about Rockwell Automation technology. Everyone (almost) uses it. Companies spring up with a new product. “It’s a great new technology. Blows Rockwell out of the water,” they say. Without debating the merits of technology, I always ask, “How will you sell it?” It’s not the technology only–it’s the business model.
I had a boss one time who kept wondering why our PC board wasn’t selling like Apple Macs. We had good technology, but it was getting old quickly. And Jobs found a market and a way to reach it. A cult following (I say as I type this on an iPad, checking in with my iPhone, with my MacBook Pro sittting at home not along on this trip).
Technology is a great thing. It’s not a recent phenomenon. Humans have been creating new technologies for millennia. What we need to do is contemplate the business models that make technology useful. Something that makes lives better.
Someone asked recently what I look for. Well, it’s cool new technology (which I love) along with some interesting use cases that show how people and businesses benefit.
It’s not the technology that disrupts. We have to train our eyes to see past the glitter and into the heart of the matter.
by Gary Mintchell | Aug 11, 2017 | Automation, Commentary
I wrote about FoxConn building a plant (maybe) in Wisconsin.
“Retired” Rockwell Automation Communications Director John Bernaden commented on my LinkedIn post of the article:
Good perspective Gary Mintchell. FoxConn’s been trying to replace its Chinese workers with automation and robotics for several years now with limited success. They’re realizing what’s no surprise to you — advanced systems integration of complex connected enterprises is extremely difficult. But FoxConn like too many at traditional IT companies underestimate these challenges and difficulties. In a related example, top Apple execs invited Rockwell’s CTO to a meeting in Cupertino a few years ago where they informed him that Apple planned to develop its own factory automation systems. Rockwell’s CTO literally laughed at their naïveté and politely left. Similarly Google acquired seven industrial robotics companies bragging in big New York Times articles about their X Division plan to produce armies of industrial robots. However they’ve quietly now sold or spun off most those industrial Robotics companies. The bottom line is that IT giants like Apple, Google, and FoxConn need traditional discrete automation companies like Rockwell, Siemens, GE and others to be successful.
John raises interesting points. IT programming often has some similar terminology to industrial automation—control loops, input/output, timers, and so forth. But the specific underlying technologies of industrial sensors and transmitters, industrial controllers, deterministic messaging, and the like make things much different.
I have been getting many behind the scenes looks at what Dell Technologies has been doing with Internet of Things in an industrial setting with its gateways and partnerships. Monday will find me in Houston, Texas, at a Hewlett-Packard Enterprise (HPE) event looking at what HPE is doing in the same arena.
These IT companies have formulated a strategy of working from IT (CIO) down to the factory floor, whereas Rockwell Automation and Siemens are pursuing a similar end game with a strategy beginning in the plant and working up to enterprise.
This middle ground is the new battlefield.
Connecting the enterprise is where the action exists at this time. That’s why I named my blog The Manufacturing Connection.
Watch next week as I update what HPE is up to and catch up with someone I had several great conversations with while he was at National Instruments discussing Big Analog Data—Dr. Tom Bradicich.
