In the last post I posited that an automation vendors success in making software central to its business needs to be a key consideration on choosing a strategic partner for automation technology. It is safe to say that while it seems every automation supplier is investing in software, not every automation company will actually be successful with those investments. Past history has shown that while automation companies have been investing in non-embedded software for the last 20 years, few have actually done more than match the state-of-the-market performance at the manufacturing execution systems level of the CIM hierarchy. It is not for a lack of trying. Invensys tried with its acquisition of , at the time a top tie ERP provider, Baan in the late 90’s. Ultimately the only part it kept was the Avantis maintenance management software now under the Wonderware label. Emerson tried as well with its acquisition of Intellution which ultimately became part of GE. To date the most successful acquisition seems to be Siemens’ acquisition of UGS. So why do so many automation vendors struggle with software?
One key reason is that software is essentially a game of selling the next product while hardware is selling what you have today. Companies like Microsoft, IBM and the ERP vendors basically sell a vision of where their product is going. “Buy me and I’ll deliver to you a stream of innovation that will enable you to outpace the market” is what software vendors essentially promise their customers. Software vendors sell vision. Hardware vendors, on the other hand, sell products that once installed have intended to remain static for years if not decades. They sell based on existing performance and specifications which are easily measured and compared in the marketplace. Hardware companies learned that if you deliver a product to the marketplace that fails to meet its promises you quickly fall out of favor. Software companies can deliver partial functionality today and then with a patch or “dot” release later deliver more incremental functionality that ultimately satisfies the end user. Rapid but incremental product delivery requires a company capable of leveraging strong people skills to manage expectations and develop trust and buy-in. Hardware companies that rely on spot-on delivery of technical excellence require a different set of skills more aligned with engineering proficiency. This is one of the reasons Siemens’ has been successful with its UGS investment. Of all the enterprise software categories product lifecycle management applications are used primarily by engineers who appreciate the characteristics more associated with a hardware firm than a software firm. The key question that users need to ask themselves when they look at the software strategies being proffered by the automation companies - can this leopard change its spots? Is this automation company capable of formulating and then delivering on a vision that will enable me as a user to outpace the market?
Dan Miklovic is blogger contributor for Control's blog Manufacturing 2010. You can email him at [email protected] or check out his Google+ profile.
