Things Glorious Things
Things rise again! After decades of living under the specter of outsourcing and the so-called rise of the service economy (financial services, call centers, and fast-food restaurants), the PLM market is demonstrating that things still matter — designing, making, monitoring, knowing/learning about things, servicing things, and yes finding things.
The battle is raging on the Internet of Things (IoT), with mega-companies like Cisco, GE, PTC, Intel, Savi, Epicor, Schneider Electric,1 IBM, Stanley Black & Decker,2 and many others jumping into this market with innovation and acquisitions. They say the converted are more zealous, and I would be among the converted. Today’s definition of IoT is not the one of 2002, when visions of clouds filled with information about my toothpaste tube were touted. Rather, the so-called industrial Internet of Things is changing the landscape of manufacturing and service companies. And it is happening quickly.
I have worked on a few customer projects in industrial companies during the last few years and have seen customers of the above companies in action. They have transformed their mindset from just making things and shipping them far away to be managed by others to becoming information-driven enterprises that receive information about ‘the things’ throughout their lifetime. New opportunities are opening up for companies to use these vital insights to ensure customer value as well as create new business models.
Companies are redesigning their products to support the IoT, such as Cisco developing embedded products to support ‘things communicating in remote locations’ or PTC developing cloud applications for an analytical and visibility backbone to monitor and interpret what is happening to ‘things.’
But if you can’t throw hundreds of millions of dollars at the problem like the above companies can, how do you develop your own IoT infrastructure? To answer that challenge for their customers, PTC has been on a shopping spree of late, making sure they are leading the way for designers and manufacturers who will need their own IoT applications. In January they acquired ThingWorx, and six months later, in July, they acquired Axeda.
Axeda in PTC
Why another IoT company? Simple. ThingWorx develops the application; Axeda connects it to the things. ThingWorx develops the software applications; Axeda is the MDM (mobile device management) and M2M (machine-to-machine) toolset so that things can ‘talk.’3
Differentiated Strategy
Autodesk, Dassault, PTC,4 Siemens, and other mega-providers of PLM appear to have staked different territory in this market. And that is probably a good thing as companies think differently about their strategies going forward.5 Dassault and Siemens are going deeper into manufacturing. Dassault’s recent acquisition of Quintiq is a demonstration of this. Dassault has acquired some outstanding manufacturing systems such as Apriso, for MES, to add to their manufacturing visioning 3D portfolio.
PTC, on the other hand, is moving across the product value chain from design to service. Their acquisition of Servigistics plus a company like Axeda allows a new way of thinking about the Service Lifecycle (or SLM) which unifies (currently) fragmented service processes. Services tend to be a pocket of gold for many companies, but at the same time, an executive backwater where many are left to design their own way forward. IoT changes that, providing the needed intelligence — everything about things — so that service companies can focus on performance rather than parts. That is the customer value: more up time, more power by the hour. Of course the service provider also gains an advantage by being able to provide service at a higher level of performance, usually with less cost, allowing them a better competitive position.
Interesting times!
More on the deals in this issue: Who Owns the Supply Chain Market?
And some history: Wheelers and Dealers
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1 Schneider is also an acquisitive company, with acquisition of Invensys as an example. — Return to article text above
2 Read about SBD and AeroScout here. — Return to article text above
3 ChainLink will be publishing a framework for understanding the IoT marketplace soon. Typical of markets, it can be confusing, and this one tops the charts due to the integration of devices and information — the physical and digital world. — Return to article text above
4 Some great presentations from the PTC Live conference can be seen here. — Return to article text above
5 Dassault vs. PTC discussion here. — Return to article text above To view other articles from this issue of the brief, click here.