REDMOND, Wash., Oct. 21, 2003 — For many years, it’s not just been the office staff and information workers who have benefited from the personal computer . PCs also have found a home on the shop floor, helping automate the manufacturing process, just as they helped automate other areas of the enterprise, from the warehouse to headquarter offices.
The next step is the critical link of connecting the plant-floor system to the rest of the enterprise. This, however, is often an unrealized opportunity. Businesses spent US$3.6 billion last year on business intelligence solutions for the enterprise, including plant floors. However, the research firm Forrester Group reports that four out of five companies use multiple, disparate business intelligence tools, making it a challenge to get a single, unified picture of the whole enterprise.
By integrating manufacturing processes with enterprise functions, manufacturers can increase their business visibility, collaboration, supply chain efficiency and more. The level of integration required to support true real-time, plant-floor-to-business visibility takes a wide-reaching, comprehensive approach. While developers of manufacturing applications excel in developing industry-specific solutions, forging this link to the rest of the enterprise is often beyond their resources and can divert focus away from their area of expertise.
Microsoft already has in the Windows operating system a platform that crosses departmental lines in thousands of enterprises. And, in Microsoft .NET, it has the cornerstone of a framework for even greater interconnection. So an alliance between a developer of manufacturing solutions and Microsoft results in a quick way to provide customers with a specialized application to address their business issues built on a framework compatible with the rest of the enterprise. During the past year, Microsoft has announced alliances with three independent software vendors (ISVs) oriented toward plant floor automation: ABB and AspenTech, both earlier this year, and this week with Invensys (see press release, link at right). Microsoft’s common goal for these alliances is to help these market leaders accelerate the development of their solutions and reap the benefits of Microsoft’s focus on innovation in enterprise products and technologies.
To learn more about these alliances and what they’ll mean to the manufacturing industry, PressPass spoke with Don Richardson , director of manufacturing industry solutions at Microsoft.
PressPass: What is Microsoft’s history in terms of focus on the manufacturing industry?
Richardson: We’ve been focused on helping manufacturing customers for quite some time. One early example comes from the early 1990s when we began working with the OPC, which is a manufacturing consortium that developed a specification to promote open connectivity and interoperability in industrial automation. If you now look at what we’re doing with leading plant automation solution partners, it’s a natural extension and evolution of that work with OPC. We’ve helped bring a higher level of connectivity and interoperability to the plant floor, and now we want to help manufacturers gain the next level of benefits from that interoperability, and that comes with linking the plant floor systems to the business systems.
This focus comes directly from what we’re hearing from manufacturing customers. We’re seeing an interesting dynamic in manufacturing today. Plant floor managers and IT managers are collaborating to gain greater connectivity between their systems and then coming to Microsoft and our partners and asking for our help on how to best address this issue. They want real-time visibility to the shop floor and easier application integration across their systems. Allying ourselves with ISVs knowledgeable and successful in manufacturing automation means that the customer needs are addressed by vertical solutions developed by the ISVs, and thanks to the .NET-based design, the solutions also are seamlessly compatible with the rest of the enterprise.
PressPass: What is the alliance Microsoft is announcing with Invensys?
Richardson: We’re announcing an agreement to help Invensys accelerate the development of its plant automation solutions to better meet the needs of the modern enterprise. The announcement provides a good example of how Microsoft helps ISVs develop solutions for a specific industry, such as manufacturing. We provide three major elements: we have an integrated platform that stretches across the enterprise, we offer standards-based technologies and products that offer the best economics to our customers, and we partner with market-leading ISVs who bring the domain expertise and understanding of the customer’s issues and pain points to the development of the industry solutions.
In the case of Invensys, we’re announcing that it will base its current and future manufacturing solutions on .NET technology and the .NET Framework. Invensys also will take advantage of the Microsoft Windows Server System and our operating systems, such as Windows XP for the TabletPC. Central to the alliance is Invensys’ plant automation architecture, called ArchestrA. By taking advantage of .NET and its support of XML Web services, and our enterprise-ready products, Invensys can to extend the benefits of ArchestrA beyond the plant floor to enable easy integration with other applications in the enterprise environment.
PressPass: How does this alliance relate to the alliances with manufacturing ISVs that Microsoft has recently announced?
Richardson: Our alliances are all non-exclusive. And, along with the alliances we’ve formed around key areas where we want to really drive change, we also work with a broad array of ISVs on technology adoption and solution development. Manufacturing is both a segmented and widely distributed market, and each software company has expertise that addresses manufacturers’ needs in certain vertical segments and sub-segments. For example, some ISVs who develop on our platform have domain expertise in discrete manufacturing vs. process manufacturing, or focus strictly on the needs of automotive or high-tech manufacturing, or on the chemical or consumer packaged goods industries. Because manufacturing is so broad and segmented, it is difficult to identify a single vendor that can address all of these manufacturing vertical segments to the depth our mutual customers require.
By working closely with a collection of leading industry partners, we can point our enterprise customers to a broad range of specialized solutions that address their unique manufacturing needs. In the case of plant automation, the ISV brings the domain expertise necessary to deploy reliable plant floor systems in whatever manufacturing environment exists and our platform and technologies help integrate their solutions into the broader enterprise environment.
PressPass: Do these alliances suggest that plant automation and working with plant automation vendors is a new strategic focus for Microsoft?
Richardson: Historically, Microsoft has had a strong presence in manufacturing automation, since the PC and MS-DOS were first used in the 1980s by some vendors and manufacturers for developing plant floor applications. The subsequent launch of the Windows operating system with its rich graphical user interface offered manufacturers a low-cost, intuitive platform on which to develop the next generation HMI and SCADA solutions.
One of the biggest problems the manufacturing organizations face, due to factors such as globalization and shorter product life cycles, is increased pressure to cut costs from the manufacturing process. While manufacturers have already realized significant productivity gains from new technology, there is opportunity to cut costs further by reducing the latency in the supply chain and by adopting lean manufacturing processes. To do that effectively, companies need to get their enterprise operations tied more closely to plant floor operations. That’s where we believe the combination of .NET and the expertise of our solutions partners can really benefit our customers.
PressPass: With regard to the needs of manufacturers, what other areas is Microsoft focusing on?
Richardson: Most manufacturing enterprises are dependent on core line of business applications, such as enterprise resource planning, supply chain management, product lifecycle management, plant floor automation and customer relationship management in order to run their businesses. The boundaries between these applications are becoming blurred as a result of increased functionality and complexity. At the same time, our customers are looking at new ways to lower the costs of integrating their applications. They’re all trying to address the fundamental challenge of getting more real-time information from the manufacturing process and sharing that information to more knowledge workers in the enterprise.
Microsoft is focusing on the major areas I mentioned ERP, CRM, PLM, and so on and has relationships with many of the ISVs whose knowledge and expertise help deliver effective solutions. Beyond the three ISVs we’ve allied with to accelerate plant floor automation solutions, we also work with a wide number of other solution providers, including ISVs such as Emerson Process, EDS PLM, Honeywell, OSIsoft, Rockwell Automation and Siemens, just to name a few. We list our partner ecosystem on our Web site and in our marketing materials so customers will be able to see all of the providers who can address their business issues with Microsoft-based solutions. We believe the real value in working with all these ISVs is in the way they address the needs of manufacturers in their domains to cut costs and drive up profitability.
PressPass: How does Microsoft identify what partners to work with on solutions for manufacturers?
Richardson: We look for the following characteristics when identifying partners: We look for partners that are viewed as strategically important in their manufacturing segments, ones that are thought of as industry leaders. Ideally, the partners would be game-changers, providing the next
for manufacturing. Also, we look at partners who believe in .NET, who are committed to the Microsoft platform, and who make the investment in time and resources to engage in our partner programs, train their people as Microsoft certified engineers, and participate in our early-adopter programs. Finally, we look for partners who can really add value to the Microsoft platform. We deliver the integrated platform, the enterprise-ready products and the best economics. The ISVs extend those benefits into their solutions.
PressPass: What do software vendors such as ABB, AspenTech and Invensys gain by working with Microsoft and the Windows platform?
Richardson: The No. 1 thing we’re hearing from the ISVs we work with is that they appreciate the significant investment Microsoft makes into integration technologies and our platform. For example, this year, Microsoft’s annual R & D budget will be around US$6.9 billion.. Many of our ISVs are under pressure to reduce costs in R & D, so they’re looking for a platform that allows them to develop their solutions more quickly and at a lower cost. In the space launch business, it would be the equivalent of launching a rocket from a mountaintop vs. sea level our platform and innovations put the ISVs closer to their solutions at the start. They also know that their customers want increased business visibility, ease of integration, and lower cost of ownership with their solutions, and those are a few of the characteristics of our platform.
Ultimately, through working with Microsoft, the ISVs produce an application that the customer needs, on a platform very well-known to the end users, and with a familiar user interface that is easy to use. They can do all that while still spending less money on writing code and focusing the majority of their resources on realizing their domain expertise in their solutions. Plus, using the Microsoft platform and .NET, they have a more effective way to tap into plant floor systems about 90 percent of all new automation software purchased for the plant floor is Microsoft-based. The customers, in turn, get applications that address particular manufacturing needs, are easier to deploy, with a user interface their employees know well, at a lower cost.
In the end, it’s very clear we want to help manufacturers make the most of their IT investment by driving the development of targeted enterprise solutions developed on our integrated platform, which will enable them to use the information from the plant floor elsewhere in their enterprise.