subscribe: Posts | Comments | Email

An Iteration of the IT-OT Conflict in Internet of Things Focused Tech Initiatives

0 comments

As a sidelight to our prior commentary related to GE Digital’s report of progress on Digital Industrial efforts, we call Supply Chain Matters reader attention to a recent blog posting on EDN Network.

Richard Quinnell pens in his commentary, Solve the IT-OT conflict, that Internet of Things (IoT) focused developers are facing a challenge, that being their brethren enterprise organizational IT teams. He describes this as a territorial battle among operations technology (OT) focused teams and those responsible for the security of company networks.

Both have reasonable claims to the control of data and information, performing analysis of information and to make changes to applications and equipment. However, according to the author, a typical current response is for OT teams to forego working with the firm’s enterprise network in favor of creating an independent network. Such independence requires OT teams to take on the challenges of maintaining a network infrastructure, which is sometimes outside their area of experience.

Many of our IT focused readers will probably recall past efforts of IT skunkworks where independent functional or line-of-business teams tap independent budgets and avoid corporate IT as much as possible to deliver on required business or functional initiatives. In this case however, the nuance brings out the differences in operational networks vs. business applications networks.  As the posting points out, the eventual impact is to restrict the synergies hoped for in IoT, namely connecting physical operational device data with enterprise applications such as PLM, supply chain planning, execution, or customer service management.

Read the full commentary and ponder whether your organizational initiatives related to IoT are running into these same inherent conflicts that ultimately stymie longer-term benefits of IoT.

Bob Ferrari


GE Digital Provides a Report of Progress on Digital Industrial Efforts

0 comments

This week, General Electric, specifically the company’s GE Digital group, hosted a group of Wall Street equity analysts at its campus in Silicon Valley to present a report of progress. Division CEO Bill Ruh predicted that GE is delivering the winning formula in efforts to leverage industrial networks and the Internet of Things (IoT) in assisting businesses to enable new industrial outcomes concerning asset management.

As Supply Chain Matters has pointed out in previous commentaries, GE has invested significant dollars and resources into the growth of its new digital business since its founding in 2011. Upon listening to the webcast of this briefing, it was clear to this author that GE intends to leverage its perceived first mover market advantage in enable the notions of industrial networks.

Development efforts surrounding the core GE Predix operating system began in 2012 as an internal effort to connect the vast amount of sensor data generated by equipment products. By 2013, GE began to analyze data among fleets of machines and equipment to discover important analytics related to operational performance and maintenance needs. Operating units began to correlate certain operating environments with performance outliers and needs for unplanned maintenance. It was then that GE executives began to view Predix as a data and analytics platform tailored for the unique and demanding requirements of many forms of equipment networks made up of aircraft engines, turbines, wind mills or sophisticated medical equipment. That includes collecting very significant volumes of real-time data and harnessing that data into more predictive analytical insights into asset up-time and reliable performance.

In this week’s update, Ruh indicated to analysts GE’s forecast of over $6 billion in revenues for this unit this year, with a goal of over $15 billion in revenues by 2020. That 2020 revenue forecast is now lower than previous estimates indicated earlier this year. As we have noted in our other IoT focused commentary, there is still a lot of market education and maturation required.

He outlined four pillars to support this level of growth:

  • A keen focus on customer outcomes particularly in business services growth.
  • Support of incremental productivity needs of customer.
  • The launching of “killer’ applications
  • The leveraging of GE’s Predix operating system in the enabling of the Industrial Internet ecosystem. Ruh indicated that by the end of this year, there will be 20,000 developers working on Predix enabled applications.

What makes GE’s approach to IoT enablement unique is its current ability to leverage both advanced digital technologies as well as the deep vertical industrial equipment domain knowledge that exists across GE’s industry verticals. With a strong presence in transportation, commercial and military aircraft, alternative energy, and medical equipment sectors, there are a lot of potential opportunities to leverage. From an organizational perspective, GE currently leverages both a business horizontal and business unit vertical leadership structure surrounding GE Digital.

From a broader go-to-market strategy perspective, executives placed emphasis on ongoing efforts to open the Predix platform environment to more developers and partners and building out a richer ecosystem surrounding the platform. Other efforts are directed at building solid customer references in both traditional and outcome based pricing deals, building digital commercial scale among different key industry verticals.

GE Digital executives went to great lengths to point out their belief that industrial based IoT applications and network opportunities will be a far larger market segments that consumer focused IoT applications, pegging the latter segment as greater than $225 billion by 2020. That stated, during open Q&A, executives indicated a belief the 2017-18 timeframe will be the point of industry inflection in IoT enabled efforts. From this author’s lens, that is fairly consistent with comments and observations we’ve heard from other IoT focused technology and services providers.

One other area we wanted to highlight for our readers was that of GE’s stated approach, namely this this is an ongoing race, and that came across quite clearly in executive level presentations and open Q&A. This is an industrial company that is fostering a software industry type culture of fast innovation and maintaining market dominance.  As a further point of reference, GE itself elected to begin efforts to move its corporate headquarters from pastoral central Connecticut to Boston’s seaport tech district principally to foster an overall culture of fast innovation. In March, Jeff Immelt took to the stage to tell Boston’s business leaders just how important their city is in his grand plan to redefine the industrial conglomerate- I want people that are down in the Seaport, I want them to walk out of our office every day and be terrified. I want to be in the sea of ideas so paranoia reigns supreme.”

That is indeed a different corporate culture for a diversified industrial manufacturer.

GE is in a race among other enterprise technology providers, systems integrators and industry platform providers a race that presents differing roles of partner, co-developer and perhaps key competitor.

Like previous market inflection points such as Client-Server, ERP, RFID, Cloud and now IoT, the race is on, and rather than a sprint, it is a marathon that features many hills and valleys and environmental changes along the route. Only this time, the make-up now includes some very interesting new players, one’s that live, breathe and practice industrial networks, equipment, services and understanding of asset management.

Let the race continue.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Oracle Reports Fiscal Q4 and Full Year 2016 Financial Performance- It’s All About Cloud Momentum

0 comments

Oracle reported both fiscal 2016 fourth quarter and full year financial performance with executives indicating they were thrilled by the results as well as the current momentum of this enterprise technology provider. Oracle CEO Safra Katz indicated her optimism that the company is working to position Oracle as a customer strategic partner for the Cloud.

In its fiscal fourth quarter, Oracle reported $10.6 billion in total revenues, down 1 percent in U.S. dollars and flat in constant currency. Of that total number, Cloud based revenue in the quarter was $859 million, up 51 percent from last year. Total on premise software revenues were $7.6 billion with software updates and product support revenues at $4.8 billion, up 4 percent from last year. Operating income for the fourth quarter was $4 billion and net income was reported as $2.8 million. Operating margin in the fiscal fourth quarter was 37 percent.

For the full fiscal year, total software and cloud revenues for Oracle totaled $37 billion, representing a growth rate of 2 percent in constant currency. Cloud, SaaS and PaaS segment revenues were reported as $2.2 billion, growing 52 percent. Cloud infrastructure as a service was $646 million, growing 11 percent. On-premise software grew slightly in constant currency to $26.1 billion, as continued growth in software support offset could-related declines in new software licenses.

Co-CEO Mark Hurd indicated that Oracle currently has nearly 2600 Fusion ERP customers operating on the Oracle Public Cloud, with more than 2000 new PaaS added in Q4 alone.

Oracle further raised its financial guidance for the current Q1-FY17 quarter

From an overall strategic growth perspective, Oracle Founder, Executive Chairmen and CTO Larry Ellison outlined two specific longer-term strategies. The first is to continue to accelerate the enterprise technology provider’s SaaS and PaaS ongoing growth rates with a goal to at least double the growth rate of the company’s closest competitors. He indicated to analysts that Oracle has a fighting chance to be the first SaaS company to make it to $10 billion in revenue and to dominate this market segment. He felt Oracle was a major player in ERP, HCM and CRM, along with Service Management and almost the only player in supply chain and manufacturing.

That latter observation is one that Supply Chain Matters shared in our coverage of Oracle Open World last fall, our belief that Oracle is currently the only enterprise technology provider offering a full suite of supply chain and manufacturing applications available on a public or private cloud platform. Once more, Oracle can provide added options for infrastructure and database hosting needs, either private or public. This can be especially attractive to up and coming industry disruptors or mid-marker manufacturers and services providers looking to gain advanced technology at lower cost.

The second major point of focus outlined by Ellison is that of infrastructure as a service (IaaS) data centers that are now being converted to next generation technology providing broader compute power and efficiencies at lower cost. Ellison observed that a huge amount of interest and demand related to IaaS stems from existing and new SaaS customers and even larger amounts of customer interest and demand originating from Oracle database customers looking for opportunities for decreased operating costs and higher efficiencies. In the financial performance briefing he noted:

Our database customers want to move their application into our cloud putting their database on to our platform as a service and then their applications, so a lot of custom applications on to our infrastructure as a service, these two things go together.

For supply chain functional and line-of-business teams, this is indication that IT teams continue to seek broader cost reduction and service enhancement opportunities in managing data management and reporting needs. With Oracle databases so prevalent across supply chain and product management applications areas, this is an important trend to monitor.  From our lens, Oracle’s efforts are now clearly focused on moving existing and future customers to Cloud based applications and computing, a core strength of this enterprise technology provider.

It further represents an indication that Oracle will counter SAP’s HANA efforts with additional options to allow Oracle database platforms the ability to support applications and analytics needs in Cloud based environments.

No doubt, during Oracle’s upcoming annual Open World customer conference being held in September, there will be more information regarding Oracle’s efforts to accelerate its march to the Cloud.

Bob Ferrari

© Copyright 2016 The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Conversation with ClientLoyalty- Interactive Supplier Performance Management Technology

0 comments

When this industry analyst attends technology and industry conferences, I attempt as time permits, to seek out what I believe our technology vendors that are providing unique or different technology approaches to business process needs. When attending ISM 2016, the annual conference of the Institute for Supply Management (ISM) held in May, this industry analyst had the opportunity to speak with B2B relationship and supplier performance management technology support provider ClientLoyalty, Inc., specifically Chairman and CEO Kent Barnett.

Essentially, ClientLoyalty technology collects operational metrics, direct feedback and social sentiment information regarding suppliers. After successfully spending over a decade transforming the field of human capital analytics with cloud-based technology, the founders of ClientLoyalty’s turned to developing cloud-based software to improve buyer/supplier relationship management using analytics, benchmarking and credible methodologies.

However, the uniqueness is in the concentration on business or professional services providers. For example it could be marketing services or public relations, consultants, or logistics and transportation services.

Within the software, information is synthesized and benchmarked in the form of alerts, dashboards, and reporting tools to ease the complexities of relationship management using what is described as a practical and pragmatic approach. Users have the option to share non-sensitive data with partners as a part of a transparent service level agreement process while keeping confidential the critical data needed to track and monitor internal supplier relationship management and monitoring needs.

During my visit to the ClientLoyalty booth, I was provided a demonstration of the software.

What impressed me was the breadth and clarity of the information, the flexibility of the software, and the intuitive usability features that should allow any user to be able to quickly come up-to-speed with features. Information on key performance indicators can be collected and inputted plus suppliers themselves are allowed the ability to input information relative to their customer’s actions in the relationship, in-essence, fostering a two-way information lens. That, by my lens, is area that should have more practice by procurement professionals, an understanding that perceptions run in either direction and it’s important to key-in on the ones that could lead to added tensions.

One cool capability was the ability of either party to share videos or photo images, perhaps a photo of the service created or a video of a problem area that needs attention. While such capability can also be done in texting or email, having the ability to tag, archive and log these events can be of-value. There is also the ability to scan social media channels for evidence of positive or negative sentiment. I kidded with my host as to wht6her that included specific Supply Chain Matters commentaries.

Finally, ClientLoyalty is one software company that is willing to share pricing on its web site. The Enterprise version of its software is currently available for $99 per user, per month.

We found ClientLoyalty technology to be one that we wanted to make visible to our readers who may be seeking a different option for managing supplier relationships and performance for business services providers.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


Supply Chain Matters Conversation with Tego- A Different Architectural Approach to Internet of Things Deployment

0 comments

When this industry analyst attends technology and industry conferences, I attempt as time permits, to seek out what I believe our technology vendors that are providing unique or different technology approaches to business process needs. In our next two Supply Chain Matters postings, I will touch upon two such providers.

While attending the PTC LiveWorx 2016 Internet of Things Technology (IoT) conference in Boston, I had the opportunity to briefly speak with Tego, Inc.

One of the current considerations for business and IT teams in evaluating an IoT technology initiative is the overall architectural approach.  Consideration can be given toward investment in a broad-based IoT network connectivity and supporting applications platform, essentially a predominant focus on a system-wide approach. However, some organizations that want to start on smaller, more manageable proof-of-concept or service management type initiatives will often find the platform approach somewhat beyond budget resources.  That was the prime topic of conversation that I had with Tim Butler, the Founder and CEO of Tego.

Based in the innovation hub of Boston, and working with clients around the world, this provider’s original mission was in providing high-memory RFID tags along with the supporting technology to transmit data from tagged items. That has migrated to an RF-enabled platform to bring intelligence to assets. Initial efforts have been focused in aerospace and other industry settings where monitored equipment and assets include items such airplane seats, navigational systems, medical and other equipment.  Tego’s efforts in aerospace alone have resulted in a supplier relationship with Airbus in the tagging of important serviceable assets such as life vests and seats for new aircraft such as the Airbus A350. Such assets have service lifecycles that extend from 3 to upwards of 20 years and it is important to be able to capture key service information throughout that lifecycle.

This provider offers an integrated and configurable platform consisting of multi-functional TegoChips, ruggedized TegoTags, and Tego OS software platform. The approach is essentially a reverse flow, namely allowing the physical asset to communicate and exchange key information with a database or business application. Butler is clearly passionate about Tego’s different approach and indicated that the firm has encountered many customer prospects with current limited budgets and resources, but has a need to make certain assets and equipment smarter and more interactive with other processes.

Tego’s smart asset approach can further allow businesses to bring intelligence to physical assets that exist beyond the reach of the Internet. As its web site points out, industrial assets don’t necessarily exist in climate-controlled environments bathed in WiFi signals. In the real world, objects can be found in geosynchronous orbit, at the ocean floor, exposed to gamma and x-ray radiation, or boiled in autoclaves. They may only rarely have the opportunity to upload or download data. Tego’s stated mission is to make every asset a smart one.

During our conversation, we also touched upon the topic of information security involving connected devices. Butler provided a compelling argument that his firm’s architectural approach can insure data security. He is not shy in declaring that Tego is setting a standard for new levels of intelligence and insights using a next-generation platform that unites high-capacity memory with unparalleled ruggedness and security.

We found this technology approach to be one that we wanted to make visible to our readers who may be seeking a different option in IoT or connected assets deployment.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


« Previous Entries