by Gary Mintchell | Sep 8, 2015 | Automation, Operations Management, Software
I have been contemplating what is going on over the past couple of years in the business of HMI / SCADA software.
This thinking was brought to an interim conclusion by the (sort of) announcement of another last-minute Wonderware conference.
I first heard about the Wonderware conference, distinct from the SimSci conference (another Schneider software company through the Invensys acquisiton) also announced for this year, about a month ago. To date, I have not received any official communication from Schneider as a writer/blogger/analyst. They have sent several emails out to me as a result of being on a few magazine subscription lists.
Schneider announced in July a new company formed with Schneider software (unspecified companies within the division) and Aveva with Schneider being the majority owner. Two months down the road there have been no further announcements. The only media relations people listed on the Website are in France. I never heard of any of them.
Meanwhile there are rumblings on LinkedIn that make it appear that Schneider has begun cutting some really talented executive staff.
Big Three
Only a few years ago there was sort of a Big Three with Wonderware, Intellution, and Rockwell Software. Intellution went first to Emerson which took the IP it needed and sold it to GE. That company originally thought it could blend Intellution and Cimplicity, but wound up rewriting its software now called Proficy. Evidently most of its sales are internal to GE, because all competitors claim they never see it in active quotation processes.
Wonderware went to Ivensys then to Schneider then to ??? Under Invensys it lost some of the California software company panache, but was still a major player. What is going on now is anyone’s guess.
Rockwell continues to pick up little companies (and some big ones for the overall software business) and keeps plugging away.
Meanwhile, Schneider, never a software company, picked up Citect through its Australian subsidiary. Then Invensys–now Schneider–picked up Indusoft. Consolidation continues. When the Aveva thing shakes out, we’ll see what other consolidation occurs.
MOM
Each of the Big Three picked up companies in the MES or the MOM space several years ago. They took over the “old boys” club that was MESA and attempted to make the organization into more of a supplier/user collaboration organization promoting the benefits of that layer of software.
There has not been as much movement in that space as I thought there would be a couple of years ago. I thought this new business “Manufacturing Connection” might capitalize on that layer of software. Nothing really happened there.
Question
So what I throw out to you–both of my readers–is just this:
1. Has HMI/SCADA reached commotity status where the business is not as attractive unless run as a cash cow?
2 Will the MES/MOM area remain so complex (there are good reasons for that) that suppliers in the space must maintain many engineers and IT professionals to help customers rationalize their businesses in order to gain the many benefits of the software?
3. Does this situation with the larger MES/MOM companies leave an gap for inroads to the market for smaller companies to begin grabbing market share?
Let me know what you think.
by Gary Mintchell | Jul 30, 2015 | Commentary, Manufacturing IT, News, Operations Management, Software
OK, so I was wrong. Well, I was right and wrong.
My analysis of the Schneider acquisition of Invensys (Foxboro, Wonderware, et. al.) centered on European competition. Namely that as Schneider assembled a large industrial technology powerhouse it was looking at Siemens and ABB—its next-door rivals.
Schneider was already a competitor in the electrical power industry. Acquiring the process automation technologies business with Invensys brought it into more complete competition with ABB.
Software
On the other hand, I thought that Schneider might divest the software business partly because it never really had very much in the way of software.
OK, I was wrong.
Schneider announced last week that “it has reached a preliminary, non-binding agreement with AVEVA Group PLC (“AVEVA”) on the key terms and conditions of a combination of selected Schneider Electric industrial software assets and AVEVA (forming the “Enlarged AVEVA Group”).
On the surface this appears to be a strange marriage. In fact, my friend Walt Boyes did an anti-Schneider rant on his blog this morning. Amongst the rumors he alluded to about Schneider management and how Clayton Christensen’s analysis of acquisitions predicted that the acquisition would go south, he also misunderstood, I think, the implications of this move.
AVEVA is a construction engineering software company. It provides the front-end engineering for plants that Foxboro, Triconix, Avantis, and other ex-Invensys brands operate and maintain.
Design to operate
The upshot is that Schneider should be able to provide an end-to-end solution for process industries similar to what Siemens has done for discrete manufacturing with the integration of UGS and the Siemens PLM division.
By the way, this latter is an example of how a large company can beneficially absorb an acquisition. The merger has worked very well. Other European companies have closely watched this acquisition model. I believe that Schneider will have learned from it.
I wonder what implications for the OpenO&M Initiative and the OGI Pilot program—an ongoing effort to use standards to move data from the engineering design database to the operations & maintenance database. AVEVA was a key player.
Transaction details
It is expected that the proposed transaction would:
1. create a global leader in industrial software, with a unique portfolio of asset management solutions from design & build to operations, with both scale and a distinct market position to address critical customer requirements along the full asset life cycle in key industrial and infrastructure markets;
2. unlock additional value at enlarged AVEVA and Schneider Electric through the potential for material revenue and costs synergies, leveraging on complementary end-markets exposures, customer bases and product portfolios;
3. establish a ‘best in class’ management team and increased brand profile for attracting further talent; and
4. realize the full value of the contributed industrial software assets.
The enlarged AVEVA would have combined revenues and Adjusted EBITA of c. £534 million and c. £130 million, respectively. It is expected that the Enlarged AVEVA Group will continue to be admitted to listing on the Official List of the UK Listing Authority and to trade on the London Stock Exchange plc’s main market for listed securities. Schneider Electric intends to comply with the Listing Rules of the UKLA. As part of the transaction, Schneider Electric would contribute a selection of its industrial software assets to AVEVA and make a cash payment of £550m to AVEVA, (which would subsequently be distributed to AVEVA shareholders excluding Schneider Electric) in exchange for the issuance of new AVEVA shares, giving Schneider Electric a majority stake of 53.5% in the Enlarged AVEVA Group on a fully-diluted basis. Schneider Electric would fully consolidate the business in its Group financials.
In addition to any consultation procedures involving the personnel’s representative bodies that may be required, the transaction remains subject to, amongst other things, the completion of mutual due diligence to the satisfaction of both parties, agreement on the terms of legal documentation, the approval of the respective Boards of Schneider Electric and AVEVA, AVEVA shareholder approval and relevant anti-trust and regulatory approvals (if required). In accordance with the applicable law and regulation of the United Kingdom, a more detailed public announcement has been released today and is available on the AVEVA and Schneider Electric websites as well as on the AMF (French regulatory authority) website.
A further announcement will be made as and when appropriate.
by Gary Mintchell | Apr 7, 2015 | Asset Performance Management, Automation, Events, Interoperability, Manufacturing IT, News, Operations Management, Process Control, Software, Technology
Ulrich Spiesshofer, ABB CEO
I was not able to attend ABB’s Automation and Power World this year. Too many places to go at the same time.
However, someone I trust, Mehul Shah of LNS Research, was there and wrote his observations on the LNS blog.
Mehul focuses on software and linked it to the Internet of Things. “The conference also featured a prime focus on the Internet of Things (IoT), as a panel was presented on stage, containing key event sponsor Microsoft, ABB, and an ABB customer. The trio provided insight and examples into how the IoT trend is impacting the industry.”
Highlighting ABB’s solution in the IoT space, Spiesshofer discussed the following key areas of focus
• Robotics
• Intelligent devices
• Control systems
• Advanced communication infrastructure
• Enterprise software
• Analytics solutions
“A notable fact that was highlighted at conference was that—to my surprise—more than 50% of what ABB’s currently offers is software related. ABB had made a few major acquisition over the last decade to build its software offering. The most impactful was the acquisition of Ventyx for $1 billion in 2010. This gave ABB a major boost in asset, operations, energy, and workforce management solutions in some of the asset intensive industries. ABB has also made some other acquisitions such as Insert Key Solutions and Mincom to build its Enterprise Asset Management software offerings. It seems clear the company understands the importance of its software business to remain competitive, and has also developed a separate Enterprise Software group that houses some of these acquisitions.”
Interesting that the investments were in software applications. Several years ago a CEO told me that software was important to his company—and that there was software in most of the company’s hardware products. That was correct—but my point was software business, not technology. ABB seems to have kept emphasis on software business even while Spiesshofer has been divesting some of the acquisitions made under previous CEO Joe Hogan.
Shah’s Takeaways
• It was impressive to see the effort that ABB has invested to bring its acquisitions under one brand.
• ABB has taken a first step in building a technology roadmap by bringing some of the software offerings together as part of the Enterprise Software group. LNS sees this as a big step in the right direction strategically, and should prove of great benefit to current ABB customers as well as prospects.
• However, ABB currently has important software products that remain outside of its Enterprise Software group and it remains to be seen if these solutions will receive the required attention, especially when considering the breadth of ABB’s portfolio. Two examples of this are the company’s Manufacturing Execution System (MES) offering, and the aforementioned Decathlon for Data Centers.
• ABB has a full-fledged MES offering with some good customers currently leveraging this MES across discrete, process, and batch industries.
• ABB might have some ground to cover in MES compared to some of its closest competitors in this space. Companies like GE, Siemens, Schneider Electric and Rockwell Automation have been heavily focused on the software business with many announcing reorganizations to increase resources allocated to software over the past several years and.
• Another area we would like to hear from ABB is around their offerings in IoT. While there were number of products that were categorized as IoT solution, ABB will need a holistic offering and vision around how their industrial clients can leverage these solutions to drive value.
• To answer the question, yes—ABB can compete effectively in the software business. But there is still some grounds to cover. ABB has had a lot of critical parts of the software business for quite a while and has been slower than many of its competitors in pulling it all together.
Gary’s Take
I agree with Mehul for the most part. I knew ABB had an MES offering, and I’ve interviewed Marc Leroux many times over the years. But it always seemed a little under the covers. The same with the Ventyx acquisition. It was easy to forget about it as it didn’t seem to get the promotion it deserved.
ABB is such a diverse conglomerate that sometimes it’s hard to know what it focuses on. I always followed the automation—primarily process automation. Several years ago, I think at Hannover but maybe SPS in Nuremberg, ABB executives explained the factory automation offering and the added emphasis the company was placing on it. But there are so many things and so few promotional dollars.
Also a few years ago, ABB decided to add its Power users to its Automation user group conference—hence Automation and Power World. However, the first two of those featured much more power and much less automation. It looks as if the company is striking a balance at the conference. But the Power division is still a laggard in performance.
ABB is a strong company, but it has much work to do in order to reach peak performance.
by Gary Mintchell | Mar 27, 2015 | Asset Performance Management, Automation, News, Operations Management
Reflecting trends I see in consumer-oriented platforms, Rockwell Automation has added custom-device plug-in capability to its FactoryTalk AssetCentre v6.0 asset management software. System integrators can now develop re-usable plug-ins to connect the software to unlimited third-party devices. For manufacturers, this connectivity expands monitoring, backup and recovery capabilities for their critical automation-related assets.
Just take a look at some of the latest developments from Facebook. They are telling media companies and others that the audience is there, on Facebook, so develop apps to reach that audience (owned, by the way, by Facebook).
This is not an exact analogy, but Rockwell has great market share of automation and control in North America and is competitive in Asia. Its software business, while not so dominant, is competitive. Therefore, it makes sense to offer this expansion for asset management.
FactoryTalk AssetCentre software is an asset management tool that allows manufacturers and industrial operators to centrally manage controllers and other automation-related assets. It archives asset configurations on a regularly scheduled basis, tracking changes and providing a point of return for faster recovery following an unscheduled downtime event. Archived asset configurations can also be saved and used as a “golden copy” configuration, allowing customers to pinpoint exactly what should be running in their automation layer and compare it with what is actually running.
“The FactoryTalk AssetCentre software now provides extensive access to equipment across an entire automation system,” said Mohit Singhai, product manager for Rockwell Automation. “Additionally, plug-in definitions created for one third-party device can be re-used with other devices or even in other automated industrial systems to help speed up commissioning and deployment.”
The software also archives user actions and changes. This allows operators or technicians to audit any changes that have been made to more easily identify a problem’s root cause, such as when a temporary code fix to keep a line running leads to an unanticipated downstream issue. Regular comparison reports can also inform operators of any discrepancies that might be occurring between an asset’s last saved configuration and its current parameters.
FactoryTalk AssetCentre software provides configurable levels of security. Administrators can establish role-based data access and activity limitations, and monitor individual user activities.
In addition to the new custom-device, plug-in capability included in the v6.0 software release, independent agent-group functionality has also been added. It allows users to place interrelated programs or agents into groups and then independently configure each agent group as needed, which allows for more scalable and flexible architectures.
by Gary Mintchell | Sep 24, 2014 | Operations Management, Software
Here is news from a press release I just received from Schneider Electric (which dubs itself the global specialist in energy management) which has introduced a unified supply chain management solution for the hydrocarbon processing industry.
This new product appears to be a major step on the road laid out at the old InFusion launch by Invensys in Boston several years ago. I knew that the vision was ambitious. The gradual release of products is not a surprise–except that it is releasing product just after acquisition by Schneider. That in itself is good news.
Built on its Spiral Suite platform, the new offering closes the value gaps left by poorly integrated legacy tools. By improving collaboration across the refinery, Spiral Suite software helps traders, planners and schedulers make reliable decisions, manage risks and ultimately increase profitability.
“Spiral Suite promises to transform the refinery business environment from being a place where hundreds of people work in isolation—not seeing or understanding how their bits of individual work contribute to the whole—to a place where workers first see and understand how their decisions impact others and then cooperate to collectively unlock the maximum value of their economic forecasts,” said Ravi Gopinath, Ph.D., executive vice president, Schneider Electric Global Solutions, Software Business. “It improves understanding and cooperation between traders, planners and schedulers and replaces several disjointed point solutions with a single, easy-to-use application.”
Spiral Suite users can contribute to and add value to one another’s decision making without the risk of overwriting data or causing downstream processing issues at the plant. Combined with powerful, intuitive visualizations, everyone is able to view, understand and respond to incidents. All refinery activities are supported within a single, highly intuitive environment, and accurate, up-to-date information is available across the business. Planners can see future scheduling constraints; schedulers can assess their decisions against commercial impact and operational feasibility. Users from different disciplines and locations are now able to work together effectively to create the most flexible, optimal plan for any set of circumstances, unlocking potential cost savings and margin improvements that could total millions of dollars each year.
According to Schneider, Spiral Suite’s SaaS deployment model, off-the-shelf integration and ease of use mean the application can be learned within days. Legacy point solutions can be replaced quickly and simply, without incurring the high cost of implementing or maintaining data transfer. Inadequate, unsupported integration bridges are removed, as is the need for application experts and extensive training courses, which lowers total cost of ownership. Data from in-house and external systems can be made available automatically within workflows, and people from across the business can work in parallel to build the supply chain model within weeks, without needing to know matrix math. [Gary’s note: This paragraph comes from the press release. There is no mention of how this happens. I’ll flesh out this information next week at the Schneider Software User Conference in Orlando.]
Spiral Suite takes advantage of the advanced features of modern processors, exploiting multi-core and cloud environments to generate results in seconds and then presenting them in a way everyone can understand. Users can explore the business and operational implications of millions of scenarios and receive real-time feedback on how their changes would impact the rest of the supply chain. Integral cargo tracking and assay management mean crude oil quality variations can be analyzed within minutes, rather than weeks, to swiftly assess their financial impact on the business, as well as any potential operational and reliability issues prior to purchase. The software also automatically reconciles all available data and performs backcasting to understand how and why there are deviations to the plan.
