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In what has become a yearly September pilgrimage to Boston for industrial software analysts, the Siemens analyst event once again brought customers, executives, and analysts together to discuss emerging trends in the space. This year’s event was MC’d for the first time by Tom Maurer, the theme was the Digital Enterprise and Digital Industrial Revolution, and the event did not disappoint with compelling presentations by both customers and Siemens executives.
The Executive’s Perspective
Chuck Grindstaff, President and CEO, Siemens PLM Software, led off with a presentation of note, relaying the continued financial success the software group is enjoying as well continuing to beat the Siemens drum of supporting the Digital Enterprise with an end-to-end suite of integrated engineering and manufacturing operations software offerings spanning the value chain.
Chuck continued to focus on the importance of the “digital twin” in addressing client needs to deliver more complex and varied products to market faster. Although the digital twin may be a bit of a misnomer, it is clear that Siemens is continuing to push a model-based approach to deploying engineering and manufacturing operations software that is designed to both model and process the product for easier integration and quicker time to value.
Chuck’s presentation was also a clear continuation of Siemens' long standing strategy to deliver an integrated suite of engineering and manufacturing operations software products to the marketplace that continues to leverage Teamcenter and Active Workspace for orchestrating data and workflows behind the scenes and optimizing the user experience and collaboration on the front end.
In today’s world of the Indutrial Internet of Things (IIoT) hype, it is unique to see a company still executing a long standing strategy that has remained largely unchanged since the 2007 acquisition of UGS and so conservative in marketing only general release products into the marketplace. At this point, it is clear that Siemens’ executive team believes robust product, customer, operations, and automation data managed by a leading PLM and Automation platform is the foundation for the digital enterprise. Few would argue this point; the real question is when and if Siemens is going to move beyond providing foundational tools and jump into the IIoT and Big Data race. If the company waits too much longer it may have waited too long.
Next-Gen Manufacturing Operations Management Backbone
On Day 2 Roland Melzer and Alastair Orchard gave a demo and update on the Manufacturing Operations Management (MOM) vision described at last year’s analyst day. Based on the demo it is clear that Siemens has been hard at work back in Genoa since last year. Much of the technology vision laid out last year (i.e. common MOM backbone across apps with common data model, Web Services integration, and a single Web-based HTML5 front end with collaboration and analytical tools) was shown working in the demo. During the course of the demo it was clear that Teamcenter and Active Workspace were leveraged throughout, and it provided the basis for a market-leading mobility demo with an Apple iPad, Microsoft Surface, and Google Glasses working in conjunction.
Although the MOM technology demo was compelling, we are looking forward to future planned announcements from Siemens over the coming months to continue communicating to the market when these next-gen solutions will be available and the roadmap for moving from existing implementations to the next-gen. We also look forward to future presentations from Siemens to further extend the value proposition to leadership in manufacturing operations -- not just engineering and automation. Finally, as with the broader presentation described above, we look forward to hearing from Siemens how the IIoT (Connectivity, Cloud, Big Data, and App Development) can further extend the MOM value proposition to keep pace with other vendors developing and marketing products aggressively in these areas.
Customers Are Embracing the IIoT
In an interesting juxtaposition to the continued focus on core competencies and long term strategies that were articulated in the Siemens executive presentations, the two most compelling customer stories were squarely focused on the IIoT and connecting all the way from engineering to Smart Connected Assets.
The first presentation was given by Juha Panakoski, Chief Digital Officer and CIO from Konecranes. Konecranes is the world’s largest “lifting” company, with 12,000 employees, 600 locations, 50 countries, 1.75 million annual service calls, 9,500 remote connections, 450,000 maintenance contracts (including third parties), and 2B Euros in revenue.
Juha started by taking us through a good, but relatively typical discussion of Konecranes’ PLM journey that started in 2008 and involved rationalizing design, product data, and collaboration tools to now provide 85% coverage across the enterprise with Teamcenter. The discussion then got much more interesting when it moved into the new vision of the company: An “Industrial Internet” initiative to knowing in real time how millions of lifting devices and machine tools perform and to use this information around the clock to improve safety and operations for customers.
With 9,500 remote connections and this number growing rapidly, it is clear that Konecranes believes that wrapping value added services to the safety and operations of its cranes is the path to growth, and that a robust PLM implementation was the foundation for the enabling of the “Industrial Internet” at Konecranes.
Another customer story worth sharing came from Dell. In this case the story was a pure Supplier Quality Management story. Dell was having trouble conducting root cause analysis in a time effective manner and tying the results of these findings to particular suppliers. To address this challenge Dell selected the Camstar product Omneo to collect error log file data from its machines in the field, store this data in a Hadoop based big data lake, and provide analytical tools to internal quality engineers as well as external suppliers. The benefits reported were dramatic, with root-cause analysis cycle times going from six weeks to six hours, which is the difference in catching issues before they hit customers or afterward.
The LNS Research Take
Siemens has remained remarkably focused on executing against the long term strategy. This is to deliver an integrated suite of engineering and manufacturing operations software products. Those products span the value chain and continues to leverage Teamcenter and Active Workspace for orchestrating data and workflows behind the scenes, and optimizing the user experience and collaboration on the front end.
LNS Research believes this strategy is necessary but should be pushed forward by Siemens to capture the long term opportunity represented by the industrial digital revolution. In terms of executing against Siemens own existing high level vision and strategy, Siemens is clearly ahead of its competitors. However, the strategy needs to be enhanced and extended overtime to reflect the realities on the ground; otherwise Siemens risks winning the race to the wrong finish line.
Today Siemens PLM is doing an admirable job of communicating and proving the value of its integrated offerings to the engineering executive and user, the IT system architect, and, to a lesser extent, the manufacturing operations team. Where Siemens could improve is in communicating and proving the value of its integrated offerings to other areas of the business, like quality, EHS, APM, and more. These are areas highlighted as opportunities for expansion in the Siemens PLM vision. Unfortunately, the message is still about how connecting to these areas can benefit engineering, not how connecting to engineering can benefit these areas.
LNS Research also believes it is time for Siemens PLM to start publicly talking about much of the market leading work that is being done behind the scenes and how it’s extending its platforms to provide IIoT solutions. For example, Omneo has the potential to become part of the Teamcenter technology stack. Omneo presents a great opportunity for Siemens PLM to start dealing with unstructured machine data and deliver value to a whole new set of users; hopefully we will hear more on this acquisition integration sooner than later.
Finally, LNS Research hopes that with the reorganization Siemens doesn’t lose its focus to extend the Siemens PLM Digital Enterprise and Digital Twin vision to the process industries. At this year’s event there was limited discussion of engineering or operational tools outside of the PLM portfolio for the process industries. If Siemens is going to offer the most compelling solutions possible to the process industries, it should bring together offerings from other divisions like COMOS and XHQ Operations Intelligence into a cohesive solution.
Overall, Siemens is well positioned to maintain a leadership role in the industrial software space but the path forward is not without challenge or risk. The next few years will be critical and will likely have a long term impact on the role Siemens plays in the industrial digital revolution. Siemens has a well-deserved reputation for delivering on what is promised to the market. As an industry observer/influencer, LNS is looking forward to working with Siemens to further extend the PLM, MOM, and Automation vision of Digitization. It will be interesting to see what direction Siemens takes and for Siemens customers it will be important to stay actively involved in product roadmap discussions and make your needs heard.