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M&A

Aras Announces $40 Million Investment Led by Silver Lake

By | M&A | No Comments

Continuing its strong growth momentum over the past few years, Aras Corp. announced today it has raised $40 Million in a new round of funding from private equity firm Silver Lake Partners and GE Ventures

The funding will be used to expand Aras’s global growth and extend the company’s PLM technology, especially in offering customers comprehensive digital twin capabilities – the ability to create and manage a complete and exact digital replica of a physical product in operation. Aras technology will give Internet of Things (IoT) solution providers and users powerful configuration management tools to establish and manage IoT information in the context of detailed and up-to-date product configuration throughout the extended product life cycle: as designed, as built and installed, as maintained, and as operated.

Aras digital twin expansion strategy continues to build on the growth momentum in IoT services from cloud infrastructure providers such as Azure, AWS, Bluemix, and MindSphere, some of whom are already Aras partners.

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.