Microsoft Factory getting ready to take control

Senior Tech Editor Rich Merritt surmises that when Microsoft Factory software arrives in the not-too-distant future, the cost of asset management will drop to the point where everybody can afford it.

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By Rich Merritt, Senior Technical Editor

THERE IS no Microsoft Factory yet. But Microsoft is getting all its ducks in a row, setting the stage, and preparing an infrastructure for that day in the not-too-distant future when Microsoft Factory will hit our industry the same way Microsoft Office revolutionized home and business software.

Can you think of a word processing program other than Word? A presentation program other than PowerPoint? A spreadsheet other than Excel? Thanks to Office, all the software packages that were around 10 years ago are only a dim memory or hang onto a tiny piece of the market.

When Microsoft combines CMMS, MES, historian, asset management and ERP software into a nice integrated package, Microsoft Factory will demolish the industrial software market the same way that Microsoft Office killed off most of the word processor and spreadsheet packages. Microsoft will just leave crumbs for the specialty software companies, like condition monitoring, remote diagnostics and loop tuning.

And prices will drop like a stone. Instead of paying millions of dollars for an asset management system, you’ll be paying just thousands. In fact, you’ll be doing what I’ve been predicting for years: You’ll be accessing all that middleware over the Internet, and renting the software on a per-use basis. Sounds too fantastic? Maybe so. But, look at what’s been happening lately, and see if you don’t come to the same conclusion:

Microsoft recently announced Windows Live and Office Live, which let you run Office software over the Internet. Carmi Levy, senior research analyst at Info-Tech Research Group says this spells the end of shrink-wrapped software in a box and the start of the Internet-based services era.

Microsoft also recently announced that it will start providing “hosted” (Internet-based) CRM and ERP software this spring. That means you’ll be able to rent ERP software from Microsoft. How that ERP system gets its plant data is unknown as yet, but Microsoft has spent years promoting its .Net architecture. I’ll bet the ERP software will be compatible with .Net, so it can take inputs from most of the HMI/SCADA and process control systems available today.

Once Microsoft builds an infrastructure of server farms to host the software, then it will be able to expand its offerings to the rest of the asset management software.

But who will install all this software? Putting an entire asset management system together is a big job. Enter Microsoft again. Microsoft is toying with outsourcing its technical services. Its first project is with St. Louis-based Energizer Holdings, which Microsoft is supplying with personnel to help upgrade IT systems. If that project works well, look for Microsoft to expand into other areas—like asset management.

Every time I made this prediction in the past, the argument was: “The industrial space is too small for Microsoft.” When I asked Charlie Johnson, Microsoft’s industrial boss, he just gave me his big wide grin, and dismissed the idea out of hand. But Charlie is no dummy. He’s been watching SAP make billions of dollars in the industrial space with clunky software and high-priced services.

Kevin Roach, vice president of Rockwell Software, told us at ISA Expo 2005 that only 15% of the manufacturing companies in the U.S.  have installed MES or any similar kind of asset management software. That means 85% of the companies have not installed such software, and that is a huge market. Big enough for Microsoft, I would think.

I believe the reason companies often haven’t installed asset management capabilities is because of the outrageous cost. Who can afford to spend $3 million to put in a complete asset management system? When Microsoft Factory arrives, the cost of asset management will drop to the point where everybody can afford it. Just like Office.

Microsoft could get into this business virtually overnight. Bill Gates has enough spare change to buy all the software companies Microsoft needs. Info-Tech’s Carmi Levy believes, however, that Microsoft will simply leverage its partners and put together packages for specific markets, such as industrial, healthcare, pharmaceutical and so on.

“Microsoft has all the tools and partners it needs to assemble Microsoft Factory,” he says, “and it has the strength to define and enforce the standards needed to make it all work together. And, whenever Microsoft gets into a market, the price point drops dramatically.”

What will this do to all the middleware software companies? They will either join the Microsoft juggernaut or die.

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