This year has opened more strangely than usual. Looks like I’ll be emphasizing a lot more IT/OT intersection plus digital transformation and Internet of Things. Part of the strangeness is that several of my good friends are on the lookout for new positions. The end of 2017 was harsh for many people. If you need a good sales and/or marketing professional, I can put you in touch with some top people. In fact, my business also sort of tapered off the last part of the year. I thought things were supposed to be good (well, my investment accounts are looking good).
There was no other way than to just string together a number of news items in the Internet of Things and Industrial software space.
• Honeywell Data
• Schneider Award
• Bluetooth at 20
• RFP for IoT Software Platform
I am a media sponsor for a couple of upcoming conferences. The strange thing is that I haven’t heard from either one for a while and neither has sent an ad png for me to display.
News also seems to be a little slow. But here are a number of things I’ve compiled over several days along with some upcoming conferences. Hope to see you at some of those.
The 22nd annual ARC Industry Forum in Orlando from February 12-15 on Digitizing and Securing Industry, Infrastructure, and Cities is a great industry meeting place. https://www.arcweb.com/events/arc-industry-forum-orlando
I see ARC Advisory Group, like many of us, must branch out from control and automation in order to find a big enough market to survive. My own practice has shifted from market and industry research and analysis in that space to greater focus on IT/OT, IoT, and digital transformation.
Also on my calendar is the Industry of Things USA (I’m also a media sponsor of the September one in Berlin) from March 7-9 in San Diego. This will be its third year. The organizing group from Berlin (Germany) has been outstanding. This is becoming a place for IT to meet OT. http://industryofthingsworldusa.com
Hannover Fair this year is April 23-27. I’ll go there depending upon sponsorship. Always a great place to meet many influential people.
The Control Systems Integrators Association is meeting from April 24-27 in San Francisco. I have never been to a CSIA meeting. Maybe this year I can slip one in if I don’t go to Germany.
The MESA International USA conference held in conjunction with the Industry Week Manufacturing and Technology conference in Raleigh, NC will be from May 8-10.
Maybe I can make it to the Rockwell Automation annual software bash in San Diego from June 10-15.
Siemens Industry in the USA is holding its automation summit in Marco Island, FL from June 25-28.
If I can afford all the travel, this will be a busy 6 months.
In the realm of industrial software, Honeywell Process Solutions (HPS) today launched its Honeywell Connected Plant Uniformance Cloud Historian. This software-as-a-service cloud hosting solution for enterprise-wide visualization and analysis, helps customers improve asset availability and increase plant uptime.
It claims an industry first by fusing real-time process data analysis of a traditional enterprise historian with a data lake, enabling the integration of production, Enterprise Resource Planning (ERP), and other business data coupled with analytics tools to provide business intelligence. “This allows enterprise data to be analyzed instantly on a scale not previously possible using tools and functions already in use at sites and plants,” says the media release.
“Uniformance Cloud Historian brings the full power of cloud and big data to Honeywell’s traditional process historian for the first time, connecting even the most complex multi-site organizations effortlessly,” said Vimal Kapur, president of Honeywell Process Solutions. “The solution makes it possible to leverage insights found at one plant across all plants, allowing smarter, more strategic decisions to be made and action to be taken.”
Honeywell’s new offering collects, stores and enables replay of historical and continuous plant and production site process data and makes it visible in the cloud in near real time. The historian combines a time series data store, which empowers plant and enterprise staff to execute and make decisions, with a big data lake, which enables data scientists to uncover previously unknown correlations between process data and other business data in the enterprise.
Last week I wrote about an interview I had with Cognizant, the Indian company that acquired Wonderware’s (Schneider Electric) R&D center. This week, an announcement about an award to Schneider Electric (not sure that these are the same it just reminded me of the Indian connection).
Schneider Electric announced its India-based Software Delivery Center (SDC) was appraised at Level 5 of the CMMI Institute’s Capability Maturity Model Integration (CMMI). With this designation, Schneider Electric’s SDC becomes part of a small group of companies with a CMMI Level 5 assessment in the industrial software industry.
An appraisal at maturity level 5 indicates that the organization is performing at an “optimizing” level. At this level, an organization continually improves its processes based on a quantitative understanding of its business objectives and performance needs. The organization uses a quantitative approach to understand the variation inherent in the process and the causes of process outcomes.
Select achievements include:
• Attaining a schedule variance of less than 1%
• Maintaining effort variances of less than 3%
• Delivering an industry-leading client satisfaction score
Bluetooth is 20
Are you listening to music on your wireless headset while working at the coffee house? Thanks to Bluetooth. Did you know that the technology just turned 20?
Today, the Bluetooth Special Interest Group (SIG) kicks off its 20th anniversary year from the Consumer Electronics Show (CES). Formed in 1998, the Bluetooth SIG started with a handful of companies focused on wire replacement for mobile voice and data. Today over 33,000 member companies are part of an organization dedicated to perfecting and advancing a flexible, reliable, and secure wireless connection solution.
IoT RFP Platform
Here is one that I think merits a deeper dive:
Three of the biggest software vendors in IoT – HPE, PTC, and Wind River (Intel) – have agreed to join the IoT M2M Council’s (IMC) fledgling template RFP Program for IoT Software Platforms, which will be presented at the IMC’s conference at CES.
Using input from many vendors and more than 100 software buyers in an open-source process, the IMC developed a template reference document that will ease buying of IoT software, and later, hardware and connectivity solutions. HPE, PTC, and Wind River have agreed to have their platforms assessed by the IoT M2M Council which represents 25,000 enterprise users and OEMs that buy IoT solutions.
The RFP program will simplify sourcing of IoT platforms for buyers by providing reference documentation and demonstrating capabilities of established software platforms, and for participating vendors, it will ultimately shorten the sales cycle.
The IMC developed a template RFP document earlier this year in a wiki-based, open-source process with input from more than 100 IoT buyers, and has now retained a third-party consultancy to validate vendors against the RFP. The validation process, conducted by UK-based Beecham Research, includes surveying vendors for responses to the RFP, contacting their customers anonymously for references, and a hands-on analysis of the platforms for ease-of-use.
“No other industry group or major consultancy is talking to buyers at scale and looking at the actual IoT sales process. My staff spends a lot of time responding to RFPs. The IMC’s RFP program gives us a report from a credible third-party that allows us to respond to RFPs more quickly, as well as a place to send potential buyers where they can access a template RFP document and learn more. If this program reduces my sales cycle, even just incrementally, it will be well worth it,” says Volkhard Bregulla, VP of Global Industries, Manufacturing, & Distribution at HPE, with a seat on the IMC board.
IMC rank-and-file membership comes from 24 different vertical markets on every continent, and a plurality self-identify as “operations”, meaning that they are unlikely versed in communications technology. “The template RFP provides a non-technical reference, and can go a long way in establishing a common language for IoT technology among people actually doing the buying,” says Bregulla.
Last week was Rockwell Automation week. I have one more major manufacturer show for the year—Discover Madrid with Hewlett Packard Enterprise next week.
I recorded a quick podcast recap of the week. I have so much material to digest, that I am still working through it.
Three quick points:
1. There was no discussion of the Emerson proposed acquisition of Rockwell. [My view after a few hallway conversations-very few-is that David Farr, Emerson’s CEO, needs to do something drastic to improve his performance. Emerson has been divesting lately, and his performance is below that of his legendary predecessor. He catches Rockwell with a CEO who have been in office just a little over a year. Maybe he thought he could surprise Moret and get a steal? What if the board prefers Moret to run the combined Emerson Rockwell company? Farr as chairman and Moret as CEO? Weird but interesting thought.]
2. Rockwell’s training is rigorous and thorough. I’ve been through at least 5 classes myself (controls, PLCs, drives, motor control centers, software). I know. Interesting and moving presentation on a joint effort of Manpower and Rockwell training veterans for second careers.
3. Open and scalable. I spent an hour learning about Rockwell’s new adoption of OPC UA. Then at least 1.5 hours on Rockwell software where the key word is scalable. The new analytics application appears to be well done and powerful (I only saw a demo during the keynotes and had some conversations, but it looked good).
You can subscribe to the podcast on iTunes or Overcast or you favorite pod catcher. I’d really appreciate a good rating and some referrals. It has a good audience considering the size of the market.
I was putting together this piece on mergers and acquisitions when I received word that Emerson had been in conversations to acquire Rockwell Automation. Final price was $27.5 billion. That wasn’t sweet enough. The Rockwell board turned it down.
Note: I feel vindicated. I told an investment company once that they could never touch Rockwell with their war chest of $1 billion. Figured I was safe on that one.
I don’t see Rockwell as wanting to sell. Despite a friend telling me for 15 years that it had to sell, I just never saw that necessity. But I do think that consolidation is rampant in the industry right now. Schneider Electric and ABB have been acquiring strategic companies to compete with Siemens. An Emerson / Rockwell combination would have awesome market share.
Because of weaknesses elsewhere, I’m not sure either really needs the deal to survive. But I think the industry is coming to that point. My thoughts were that the most logical suitors for Rockwell were Emerson and ABB. Sources at ABB have told me that they did the evaluation (of course) and figured that Rockwell would be hard to digest. So, it went with B+R Automation.
My feeling is that this deal is not finished. But it will settle for a while until Rockwell’s share prices stabilize. Then we’ll see. Trying to integrate that Rockwell culture would be a supreme challenge for the best managers, though. It’ll be interesting.
Meanwhile, I received a quarterly update from PwC regarding global industrial manufacturing deals with disclosed values greater than $50 million.
What follows is from the PwC report.
Industrial manufacturing M&A results for Q3 2017 displayed much of the same as the previous quarter with relatively flat value and volume levels. Deal value came in at $16.5 billion while the number of deals announced were 57 compared to 55 in Q2 2017.
Cross sector global and US deal volume has modestly increased for the third consecutive quarter indicating the appetite to seek out M&A plays is still active and healthy. US cross-sector deal volume is substantially up for the first nine months of 2017 vs. 2016 which correlates with
the double digit volume increases seen in the industrial manufacturing sector over the same period.
Although there is an eagerness to investment in technology and innovation, industrial manufacturing remains somewhat risk-averse, especially as it relates to targeting larger size investments. As highlighted in our second quarter report, the slowness of implementing
trade, regulatory and tax reform in the US and the uncertainty of its implications continues to be a barrier to some. Conversely, others have accepted its existence and shifted their investment strategies to mitigate against these uncertainties.
• Deal value for the first nine months of 2017 was $52.6 billion, 18% lower than the first nine months of 2016, while deal volume saw an increase from 150 deals to 170 deals from the first nine months of 2017 vs. 2016.
• Deal value for Q3 2017 was $16.5 billion compared with $16 billion in Q2 2017. Deal volume increased slightly from 55 deals in Q2 2017 to 57 deals in Q3 2017, a 4% increase.
• The average deal size in Q3 2017 was 21% lower than the 2017 YTD quarterly average of $367 million, indicating a preference towards smaller transactions.
• There were four megadeals (deals greater than $1 billion) in Q3 2017 with an aggregate transaction value of $7.7 billion. Three of the deals were crossborder deals.
• The largest deal announced in Q3 2017 was the Swiss firm ABB acquisition of US-based GE Industrial Solutions for $2.6 billion.
• Asia and Oceania remains the most active region, accounting for 56% and 35% of M&A deal volume and value during Q3 2017.
• There were 14 megadeals announced in the first nine months of 2017 ($24.3 billion) compared to 17 in the same period of 2016 ($55.9 billion).
• Seven of the top ten megadeals in the first nine months of 2017 include China or the US as a part of the transaction vs. four over the same period in 2016.
Strategic investors continue to account for the largest share of deal activity in the sector with $12.9 billion of value and 27 deals for the quarter. As shown below, this reflects 78% of value and 65% of volume. Financial investor deal value for the first nine months of 2017 was $15.9 billion vs. $12.8 billion over the same period in 2016. This contribution is consistent with previous quarters and implies the market is more attractive for companies who can create synergies.
Deal value in the industrial manufacturing sector continues to be constrained as deal makers are still wary of the current investment playing field. Many of the same political uncertainties, particularly in the US and Europe, linger and have been the primary influence in declining average deal size over the last three quarters of 2017.
For foreign investors looking to capitalize on attractive businesses in the US there are positive and negative factors simultaneously working against one another. On the positive side, the Federal Reserve sees confidence in the US economy and plans to gradually continue to increase the federal funds rate. However, negative influencing the deals environment is the current administration’s inability to progress its agenda related to tax, trade, and healthcare.
We project the industry will close out the year in similar fashion to each of the three quarters of 2017 unless we see a catalyst event in the market such as tax reform.
Paul Elie, US Industrial Manufacturing Deals Leader
Bobby Bono, US Industrial Manufacturing Leader
Barry Misthal,Global Industrial Manufacturing Leader
Industrial IP Advantage has launched an eLearning course focused on IT/OT integration for Industrial Ethernet. This is the fourth in a series of training courses designed to meet the emerging needs of control engineers and IT professionals tasked with deploying a secure network architecture. These courses are jointly developed by Cisco, Panduit and Rockwell Automation and available on the Industrial IP Advantage website.
Controls engineers have the plant-level domain knowledge needed to identify and analyze new industrial technologies that will help improve production efficiency and flexibility. Meanwhile, IT engineers have the domain knowledge needed to present actionable information where it is needed within an enterprise and throughout the value chain. This new course provides both with a sufficient level of knowledge to collaboratively architect a smart, integrated control system.
“Convergence between the IT and OT worlds is demanding new skills and knowledge,” said Ricardo Borlone, product manager at Precision Inc. “These self-paced courses are filling the skills gaps, and allow each participant to advance in their own time, rhythm and learning capacity. I especially enjoy this training format as it provides me the opportunity to focus on areas that match my interest and needs.”
The online training brings together the combined knowledge, best practices and application-specific expertise of three industry leaders to help engineers build a holistic IP-based network architecture. The courses are designed to help engineers drive design decisions from the device-level to the enterprise-wide network, leveraging interactive, scenario-based training on topics, such as logical topologies, protocols, switching and routing, security, physical cabling and wireless considerations.
The four available courses include:
- Courses 1 and 2: Designing for the Cell/Area Zone
- Course 3: Designing for Industrial Zone
- Course 4: IT/OT Integration
The full training program is offered for $350 on the Industrial IP Advantage website.
“A critical mass of industrialized networking technology is now available. And for many manufacturers, the real challenge is finding qualified staff to design, deploy and maintain these networks,” said Paul Brooks, networks business development manager, Rockwell Automation. “The eLearning courses offered by Industrial IP Advantage are designed to help fill this skills gap.”
“Building a skilled and competent workforce ready to deploy a converged architecture presents businesses with more than just greater connectivity. It offers tremendous productivity gains, process efficiencies, and business value,” said Paul Taylor, senior manager, Cisco.
“A structured, engineered approach to assessing, designing, deploying and monitoring the physical infrastructure is necessary to ensure that investments in critical manufacturing networks deliver optimum performance,” said Ryan Lepp, director of business development, Panduit. “These new training courses help both IT and OT professionals work together to deliver optimal network performance with adherence to industry standards.”
Industrial IP Advantage is a community established by Cisco, Panduit and Rockwell Automation – three like-minded organizations joining together to educate the market on the benefits of Ethernet, Internet Protocol and EtherNet/IP. Industrial IP Advantage was formed in cooperation with ODVA, the organization that manages and commercializes the EtherNet/IP specification and standard.
The vision of Industrial IP Advantage is enabling smart manufacturing with a workforce that is fully prepared to accelerate the transformation to secure information architectures with best practices, education and training that drive IT/OT convergence.
Rockwell Automation has long supported FIRST — For Inspiration and Recognition of Science and Technology — among other things supplying floor space during Automation Fair so that students can show off robotic projects. Now Rockwell Automation has announced a $12M, four-year commitment to inspire young people’s interest and participation in science and technology.
Over the past 10 years, Rockwell Automation has provided more than $15M of broad-based support to address the critical need to fill science, technology, education and math (STEM) jobs that drive innovation. Many of these jobs go unfilled because of both the lack of awareness of the kinds of high-tech jobs available, and the lack of skills to qualify for today’s needs.
“Through our technology and people, we are helping to inspire the next generation of innovators to fill the talent pipeline for our customers and for our company,” said Blake Moret, President and CEO, Rockwell Automation. “Our strategic partnership with FIRST helps us increase our reach and visibility to STEM students around the world.”
In addition to being a global sponsor of the FIRST LEGO League program and sole sponsor of the FIRST Robotics Competition (FRC) Rockwell Automation Innovation in Control Award, nearly 200 Rockwell Automation employees around the world donate their time for the FIRST programs, and more than 300 employees volunteer for the organization in other capacities. The company also donates products integral to FIRST program games and scoring. These product donations are specifically used for the FIRST Robotics Competition playing fields and scoring systems, and they are included within the parts kits teams use to build their robots.
“This generous, multiyear commitment from Rockwell Automation will allow us to focus on the strategic aspects of our partnership while continuing to help scale our programs and expose students to a broader range of industry-leading products and applications,” said Donald E. Bossi, President, FIRST. “The company has a long, rich history of supporting FIRST.”
Rockwell Automation is recognized as a FIRST Strategic Partner, which signifies the highest levels of sponsorship available at FIRST. It is also a FIRST Robotics Competition Crown Supplier.
Accomplished inventor Dean Kamen founded FIRST (For Inspiration and Recognition of Science and Technology) in 1989 to inspire an appreciation of science and technology in young people. Based in Manchester, N.H., FIRST designs accessible, innovative programs to build self-confidence, knowledge, and life skills while motivating young people to pursue opportunities in science, technology, and engineering. With support from over 200 of the Fortune 500 companies and more than $30 million in college scholarships, the not-for-profit organization hosts the FIRST Robotics Competition for students in Grades 9-12; FIRST Tech Challenge for Grades 7-12; FIRST LEGO League for Grades 4-8; and FIRST LEGO League Jr. for Grades K-4. Gracious Professionalism is a way of doing things that encourages high-quality work, emphasizes the value of others, and respects individuals and the community.