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M&A

At The Optometrist (Norman Rockwell, 1956)

OpenText Acquires Covisint: A Telltale of the IoT M&A Market

By | Automotive, Internet of Things, M&A | No Comments

In an announcement that failed to get headlines, OpenText, a Canadian enterprise information management (EIM) company,  recently disclosed it has entered into a definitive agreement to acquire Covisint Corporation, best known as the enterprise data interchange (EDI) company whose name nobody was sure how to pronounce.

Covisint was formed in 2000 by a consortium of automotive companies, including General Motors, Ford, and DaimlerChrysler. Over the years, the company expanded its EDI platform and services into the healthcare, oil and gas, government, and financial services markets. Read More

PTC LiveWorx 2015

PTC’s IoT Strategy: Realizing the Connected World

By | Internet of Things, IT Strategy, M&A, PLM, Service Lifecycle Management (SLM), Strategy | One Comment

PTC’s IoT Journey

Since James Heppelmann took the helm at PTC in October of 2010, he has been hard at work, challenging the status quo among top-tier PLM vendors and seeking to redefine PLM and expand its influence beyond its traditional engineering boundaries. The comprehensive strategy has had multiple threads and terms, starting with service lifecycle management (SLM) and the notion of product “servitization”, and evolving recently to the Internet of Things (IoT). Mr. Heppelmann wants to keep the “things” PTC’s customers design, operate, and service at the center of everything PTC is doing.

This well laid out strategy was supplemented with a rapid succession of technology acquisitions. A quick chronology of the last five years or so might be instructive. Read More

PTC Expands the ThingWorx Platform, Adds ColdLight Analytics

By | Aquisition, Internet of Things, IT Strategy, M&A, Strategy | One Comment

PTC LiveWorx 2015 concluded earlier this week. PTC brought together a good mix of users and prospects, technology vendors and systems integrators, analysts and the press, in a series of presentations and discussions that created much enthusiasm and probably greater expectations from PTC as it seeks to establish a leadership position in the Internet of Things (IoT) marketplace.

One of the more important announcements made during LiveWorx that did not get as much attention as it deserved was the acquisition of analytics software company ColdLight.

ColdLight’s Neuron software presumably provides “automated predictive analytics” by “using artificial intelligence and machine learning technology to automatically and continuously learn from data, discover patterns, build validated predictive models.” A brief conversation with the company’s CTO didn’t reveal much in way of artificial intelligence or deep learning. The software, which appears to be more of multivariate statistics and a hint of a neural network type learning), certainly does not demonstrate sufficient domain-specific semantic understanding to be able to fulfill some of the promises made in the press release. The video advertising Neuron as a brain-like learning machine was uploaded in 2009. Perhaps the product direction has changed in the course of the last five years.

With reported run-rate subscription revenue of less than $8 million, and no apparent experience in manufacturing, which is the industry PTC targets as the prime market for IoT, the term Predictive Analytics Leader used to describe ColdLight may be a bit difficult to justify, and the price tag of approximately $105 million may also raise some eyebrows on Wall Street.

So why do I maintain that the addition of ColdLight to the ThingWorx IoT platform is so important?

As I’ve discussed and written in the past, the business value of the IoT is not in connecting and managing devices, although these are critical to form the necessary foundation for value realization. The real value lies in the ability to shorten the latency in decision-making. The ability to create rich multidisciplinary context for better decision-making is actually realized outside the IoT platform—in PTC’s case ThingWorx—and requires a broad set of data and a highly capable analytic tool.

PTC’s IoT strategy remains horizontal. ThingWorx is a general purpose IoT platform, augmented by tools such as ColdLight that enable customers and systems integrators to build domain-specific big data analytic applications.

This last point should serve to highlight the challenges ThingWorx is going to face.

  • First, as PTC readily admits, IoT applications require deep domain expertise, both technical and business. The ThingWorx platform and ColdLight analytics do not provide those “out of the box.” PTC’s response to this challenge is aggressive growth of its technology and implementation partner ecosystem, which was highly evident at LiveWorx.
  • Specific to ColdLight, the company will have to prove that its technology can handle analytic and predictive tasks in a range of data types and semantics and provide deep and rich insight in a cost effective manner. At present, it appears that the Neuron software requires a significant level of professional services.
  • Lastly, as PTC targets ColdLight as ThingWorx’s main analytic tool, it will no doubt have to figure out how to cohabit with mainstream enterprise BI tools such as Cognos, BusinessObjects, HANA and SAS. This is not a question of analytic capabilities. It’s conceivable that a deeply embedded ColdLight will offer better analytic using ThingWorx generated data, but high fidelity enterprise-level decision making must incorporate a broader range of multidisciplinary data, much of which is stored in the enterprise ERP system, out of the reach of the IoT platform.

 

Harman International Acquires Red Bend Software

By | Aquisition, M&A, Telematics | No Comments

On January 22, Harman international announced the acquisition of venture backed Red Bend Software, a provider of software and services for remotely updating mobile device software using Firmware Over The Air (FOTA) technology. The company claims a customer base of over 80 mobile device manufacturers, cellular operators and semiconductor manufacturers, all an all managing some 1.75 billion mobile devices around the globe.

The $170 million transaction will be split into approximately $99 million in stock and $71 million in cash. Harman simultaneously announced the acquisition of software services firm Symphony Teleca.

Harman indicated that Red Bend will continue to operate as a separate business unit under the current management structure, which is more or less the standard language used when announcing this type of deals

Although the $71 million cash outlay made hardly a dent in Harman’s deep pockets, this acquisition certainly raises as many questions as it answers.

Connected Car, Take Two?

Harman is a major supplier of audio equipment and infotainment systems to the automotive industry, but Dinesh C. Paliwal, the company’s Chairman, President, and CEO wants a bigger pie of the connected car technology space. In 2012, Harman announced the formation of a Connected Car Software Engineering Center in Chicago, but apparently Paliwal wants to pick up the pace.

Harman’s previous acquisitions to establish a role in the connected car space didn’t play out well.

In 2004, Harman had acquired QNX Software Systems, the developer of the real-time operating system and several embedded software solutions for $138 million. Six years later, Harman sold off QNX for $200 million to Research In Motion (RIM), giving only a vague explanation for the divestiture. Today, QNX software is found in more automotive infotainment than any other software. Recently Ford announced that QNX will replace Microsoft as the operating system of the next version of its infotainment system.

Can Red Bend technology help Harman assume a more competitive role in connected cars?

In addition to FOTA technology, Harman gets access to Red Bend’s cyber security and mobile device management technologies. Harman could be thinking outside the audio equipment box here. The challenge for Harman—as it has been for Red Bend—is that these will require it to develop process expertise and closer relationship with parts of the automaker’s organization it does not currently possess.

Over the years, Red Bend has been hard at work developing relationship with OEMs and forging partnerships with wireless carriers and industry groups, trying to get them to adopt its FOTA software. While these efforts certainly made Red Bend is a recognized brand, the company wasn’t able to generate significant and sustained OEM business.

One successful outcome of Red Bend’s steady effort to take its technology to the automotive industry is a relationship it struck with AT&T to be the FOTA technology provider for AT&T Drive Connected Car Platform, which is in the center of the company’s connected car strategy. AT&T had a major win when it displaced Verizon at General Motors to become the telecom provider for OnStar starting 2015 model year.

With AT&Ts aggressive investment in automotive y and Harman’s broad footprint, is there a Harman-AT&T partnership in the making?

How Will Red Bend’s Major Customers Respond?

As a small independent provider of highly specialized technology, Red Bend was able to offer FOTA technology components and services to multiple mobile device companies. It’s unlikely that Harman has much interest in this space.

Will Red Bend’s customers see too much risk in using a technology owned by a company who is focused on selling car head units and home audio systems? Will they look for alternative sources to provide core device management capabilities and come with fewer strings attached? One example that comes to mind is Mformation, who might use the acquisition as an opportunity to offer an industry neutral alternative.

 

BigLever and Aras Deliver Product Line Engineering Integration

By | M&A, PLM | 3 Comments

Product Line Engineering: Rethinking Product Development

BigLever Software, a provider of product line engineering software, announced today that the company has partnered with Aras Corp. to deliver an integration between product line engineering (PLE) and product lifecycle management (PLM) software suites.

The integration enables product designers to define product options and variants in BigLever’s Gears software and communicate them directly to Aras Innovator PLM tool to generate a complete bill of materials for each product variant. This helps configuration engineers handle the increased complexity in product architectures, and, in particular, the proliferation of embedded control software modules.

To understand the significance of this announcement, a brief, somewhat technical, explanation of PLE is necessary.

What is PLE Anyway?

The need for higher density and richer repertoire of product functionality to meet consumer expectations and establish market differentiation continues to burden brand owners. Marketers and designers need to add product features at a high pace, frequently utilizing embedded electronics and control software to add functionality and configure products to specific markers and demographics. The result is often a large and complex set of product configurations and variants that include not only hardware and software components, but also test scripts, manufacturing work instructions, compliance certificates, user documentation, and more.

In a typical product development process, market requirements are decomposed into functions that are mapped onto a hierarchical bill of materials (BOM) structure. Individual BOM items are grouped to form the configurations and option packages that can be manufactured and sold to consumers, such as the option to add power windows and locks to a car, or a higher end PC “bundle” that includes expanded memory capacity and a fast graphic card. Frequently, rules have to be defined for “allowable” configurations to reflect design constraints, product pricing strategy, and other technical and business considerations.

Many engineering organizations find the complexity of culling BOM items (and their associated non-BOM objects) and creating “packages” for design, manufacturing, sales and support extremely difficult to handle. And the fact that many product companies use manual processes supported by an assortment of databases and spreadsheets to manage product configurations doesn’t do much to alleviate the situation.

Inverting the Process

Product line engineering takes a different approach to decomposing requirements into product design variants. Rather than starting the configuration process with an existing BOM, PLE starts with the set of “features” that are put together to form valid functional configurations as defined by the product functional requirements; for instance, a power windows “package.” The important distinction is that features do not have to correspond to physical parts. Rather, they describe functionality units linked directly to functional requirements and managed at a functional level.

In essence, one can see the product description in PLE as a bill of features containing all physical and virtual artifacts such as mechanical, electrical, wiring, software, calibrations, requirements, designs, test cases, documentation, and so forth.

The bill of features isn’t limited to itemizing features that must be engineered and manufactured in the traditional sense.  It can include, for example, the different warranty terms and bundled services for each configuration.

As importantly, features are canonical and not product or design specific, and therefore are easy to understand and manage even before the actual design has started. Feature “dictionaries” can be shared and reused across multiple products in a manner that reduces configuration management complexity and errors.

PLE and PLM

With a direct PLM-PLE integration such as the one demonstrated by Aras and BigLever, configuration engineers do not use external documents to configure a BOM for a specific product and hope that all the needed components (and only these) are included. Instead, an engineer uses Gears, BigLever’s PLE software to select the desired functionality “package.” Gears generates the list of features for each desired configuration and send it directly to Aras Innovator to generate the bill of materials.

Why is this Important?

As discusses earlier, some organizations find that managing complex product configurations and options can be a labor intensive, time consuming and error prone activity.

One outcome of this complexity that is seldom discussed openly is its impact on product testing. Because of the large number of product variants and seemingly endless number of permutations and dependencies between individual parts and subsystems, the generation of relevant and effective test cases is a dauntingly complex and time consuming task that still does not guarantee complete test coverage. Consequently,   products undergo insufficient testing, precious resources go to waste, and project schedule and quality are jeopardized.

With PLE, only the relevant features—and therefore only affected parts and software modules­­—are selected. If test cases for a specific configuration exit, they will be included automatically, or, new ones can be designed and included in the bill of features for future use.

Implications

The integration of between Gears and Aras Innovator can help companies reduce complexity, enhance efficiency, and improve the accuracy and completeness of product configurations.

Aras users that manage variant-rich product portfolios would benefit from the new ability to manage requirements and complex feature set in Gears and keep Aras Innovator BOMs in sync.

Gear’s users, not all of them are also Aras users, should consider implementing a small proof of concept PLE project using Aras Innovator to gauge the benefit of a direct PLE-PLM gateway firsthand and discuss it with their PLM software vendor.