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Honeywell's Matrikon DealMatrikon has long boasted that it is "the world's largest OPC supplier". But its recent acquisition by Honeywell mentions everything except OPC. One wonders why.
Based in Edmonton, Canada, Matrikon offers software products and systems integration to many markets: power & utilities, oil & gas, mining and petrochemical industries - all key markets for Honeywell.
The acquisition will be merged into Honeywell Process Solutions (HPS), whose President, Norm Gilsdorf, described the acquisition with boiler-plate wording: "a great addition to our business", and "combining Matrikon's technology and expertise with Honeywell's industrial platform expands our offering..." Surely he could have done better than that!
Matrikon's revenues are approximately $80M USD, and the $140M acquisition is for about 1.8 times annual revenue. In its last full financial year (Aug. 31, 2009) Matrikon sales were about $75M and net income about $2.3M; so the price is a hefty 60 times earnings, and almost 2x revenue, a premium of about 20%. That's a hefty price for business with 60-70% Service revenues. One wonders which "prestigious" M&A consultant advised Honeywell on this juicy (for Matrikon) transaction.
Back to the missing OPC mention. Honeywell is the ONLY automation major to NOT fully implement the OPC Classic specification. They offer their own proprietary incompatible implementation, which Matrikon sees as "shit", because they were replacing so much of it. For the OPC reason alone the acquisition should be good news for Honeywell users. But why hide OPC in the announcements?
Other automation majors like ABB have been buying OPC connectivity from Matrikon, but evidently they were not bidders. Will ABB now buy Matrikon OPC from Honeywell? Or will they (and others) simply migrate to Matrikon's OPC competitors?
Matrikon is a public company, and so the acquisition remains subject to the approval of Matrikon shareholders. But the largest stockholder, founder and CEO Nizar Somji (who owns about 30%) is clearly ready to sell the company and make his exit.
Here's some background: Nizar Somji, was born in Tanzania. He started Matrikon in 1988 as a consulting firm and systems integrator. Nizar is an excellent engineer, but more of an entrepreneur than a manager. In Dec. 2005, he handed over Matrikon to his protégé Amin Rawji, who had been at Matrikon for about 10 years, and Amin grew the company to almost its current size. But then a couple of years ago, Amin made an unexplained exit and Nizar returned as CEO.
Most Matrikon people had no idea that the company was for sale. But the signs were there; clearly Nizar had no succession plan and no interest in managing his company to the next level. Always a dynamic negotiator, he sold Matrikon with his usual flair for a quick, good deal. The sale (his third as a serial entrepreneur) will give him about $50 million and additional liquidity to pursue other interests. At 50-ish, he likely wants to focus on the booming Edmonton real-estate market and his other entrepreneurial activities.
Invented in ChindiaIn this new era of globalization, nations and regions are engaged in a war of ideas and innovation in the pursuit of wealth. Whoever makes things better, cheaper, faster – will win! It takes innovative thinking to stay ahead.
Everyone is familiar with the label, "Made in China" and the expression, "Chinese copy". But when will the phrase "Invented in China" become significant?
China is already the world’s largest manufacturer of consumer goods. New Chinese innovations are already brewing, fueled by their burgeoning, motivated and upwardly mobile middle-class.
In the short-sighted drive for short-term profits, American companies are selling off their own proprietary knowledge to China because that is being demanded by the far-sighted Chinese as part of the low price of manufacturing in China.
It won’t be long before China leapfrogs, and responds with their own innovations. They have a clear awareness of the need, and are targeting strategic technology arenas - clean tech, bio-tech, information and communications technologies. The level of Chinese investment in R&D is expected to overtake that of the US within the next decade. Now even capitalistic American companies have started to invest heavily in Chinese R&D operations.
India, already well known for providing low-cost engineering services, is now ramping up in raw R&D. Major companies like IBM, Microsoft, HP and Oracle, as well as automation companies like Honeywell, Rockwell, Emerson and GE, are developing technologies at Indian subsidiaries. Indian software development companies like Infosys, Wipro and others are now shifting their focus to their own innovations.
Meantime, Indian companies recognize the value of innovation, and are quickly ramping up their own new technologies. Many international startups are now using Indian development teams in their business plans. Success begets success, and before long, India too will start selling their innovations to America, Europe and the rest of the world.
In the 1950’s Japan was known for cheap consumer products. In just a few decades they outstripped the Europeans, and their GDP Is now second only to that of the US.
300 years ago, China and India represented over 50% of the world's wealth; today they are now re-emerging as world leaders. India became independent in 1947, and the New People's Republic of China was established at about the same time (1949).
Now, while the West continues to languish, China and India (or "Chindia", as some call the two neighboring countries) continue to grow at annual rates of about 10%. Representing 40% of the world's population they will, within another 30-40 years, clearly rank #2 and #3 (after the USA) in the world GDP rankings. Their own innovations will lead the way.
The energy Bloom BoxThe Bloom Box, a refrigerator-sized power generator made by Silicon Valley startup Bloom Energy, produces emissions-free energy. The "power plant-in-a-box" has thin fuel cells, which absorb oxygen on one side, and fuel on the other, to combine within the cell and create a chemical reaction that produces electricity. There's no need for burning or combustion, though it still requires some form of fuel to work.
What kind of fuel? Fossil fuels like natural gas, or also renewable fuels like landfill gas, bio-gas and solar. In some cases, CO2 is still being emitted by whatever power is feeding the Bloom Box. Rather than being zero emission energy, it's more like a booster pack for already-green sources and a filter for dirty ones.
Bloom Energy started at the University of Arizona's NASA Mars space program, creating technology that could sustain life on Mars. Bloom founder, Dr. KR Sridhar and his team built a device capable of producing air and fuel from electricity, and/or electricity from air and fuel. They soon realized that their technology could have an even greater impact here on Earth.
In 2001, when their project ended, the team decided to continue their research and start a company. Originally called Ion America, Bloom Energy (the name came from an internal contest, won by the founder's 9-year-old son), was founded with the mission to make clean, reliable, affordable energy for everyone.
In 2002, Venture Capitalist John Doerr, and Kleiner Perkins (investors in Google, Amazon.com, Netscape, Genentech and others) became the first investors. Over the next few years, the technology quickly developed from concept, to prototype, to product, and the systems became more powerful, more efficient, more reliable, and more economical.
In early 2006 Bloom shipped its first 5kW field trial unit to the University of Tennessee, Chattanooga. After two years of successful field trials, the first commercial (100kW) products were shipped to Google in July 2008.
With an estimated price tag of $700,000, a Bloom Box generates about 200 kW, enough electricity to power 20-40 American homes. The company says it will eventually market hand-held units powerful enough to run a single home for $3,000. The power will reportedly be cheaper than that purchased from standard power plants.
Is the box as game-changing as its backers believe? Well, as CBS' 60 Minutes put it, it may just do to the power plant what the laptop did to the desktop because it doesn't require a grid.
Google was the first to sign up for a Bloom Box, and other big names such as Wal-Mart and FedEx have also come on board, touting its efficiency.
Future WorkforceAutomation, plus offshore workers equipped with technology tools, will continue to move up the food chain, steadily encroaching on higher-paying, higher-skilled jobs. So, where and how will the future workforce be employed?
Work in a central place, at a set time, remains only as an old legacy. Technology has brought the freedom and power to access information anywhere, at any time, so that work is becoming un-tethered from central locations. It is becoming more adaptive, more informal and less focused on local hierarchies and pre-organized plans.
Technology facilitates flexible schedules. It reduces, or even eliminates, commuting time and related energy costs. Increasingly, work will become integrated with other facets of life, providing more and broader levels of personal satisfaction.
In the past, human interaction with face-to-face contact seemed to be the most effective. Today, technology makes people much more effective by providing collaborative communications tools. Witness the rise of social networking and collaborative work such as "wikis" which produce vastly superior results. This is flipping the ratio of individual to collaborative work from the old 80/20 to a new 20/80.
Communication patterns are changing quickly. Asynchronous e-mail provides improved thinking styles - deliberate instead of spontaneous response, with automatic documentation of discussion threads.
Outsourcing will be common, with "offshoring" immaterial; the best person for the job will do the job, and location will be irrelevant. People will redefine their own jobs, doing work at home and bringing home (child-care and chores) to work. More companies will engage in "crowd sourcing" - piecing out jobs, or even parts of jobs, to whoever can and wants to do them. The "labor" market will begin to operate more like match-ups on eBay than advertisements on Monster.com.
The convergence of several trends - declining births, retiring baby-boomers, and expected business growth will create more jobs than there will be workers to fill them. The problem will be exacerbated by the shortage of skilled, educated workers. This is already true in many technical fields.
Problems create their own solutions. The future workforce will be global, distributed, collaborative and connected.
The Attention CrisisIn the midst of the greatest information boom ever, a serious and debilitating crisis is occurring in our modern culture. The overwhelming abundance of information is consuming everyone's attention. The sheer wealth of information is creating a poverty of attention.
Everyone and everything is competing for attention – TV talking heads, visual and audio advertising, YouTube videos, emails and blogs, media outlets, games and apps on cellphones, children, parents, blogs, friends, airlines, traffic of all kinds. The average adult sees 1,000 advertisements a day. Internet users spend 33 hours per week online and about 16 hours watching TV. Teens have what is called "concurrent media exposure" - using various types of media simultaneously. In South Korea, the most wired nation on earth, young adults have actually died from exhaustion after multi-day online-gaming marathons.
Midst this cacophony of attention-grabbers, how well are we staying attuned to our own inner beings? How intentional are we about who or what we allow to sap our energy? At what times? In how many ways?
Over the last decade or so, the problem of attention deficit has shifted right into the center of our culture. We lament its decline, work hard on it in quality-of-life movements, diagnose it in more and more of our children every year, cultivate antidotes in yoga classes, buy solutions through self-help books and videos, attack it with drugs originally intended for other ailments.
As we become more skilled at handling distractions, the wiring of our brains will inevitably change to deal more efficiently with the excess of information. Neuroscientists speculate that the human brain might be changing faster today than it has since the prehistoric discovery of tools.
Research suggests we’re already picking up new skills: better multi-tasking abilities, peripheral vision, the ability to sift information rapidly. Kids growing up now might have an associative genius that adults don’t; they might be able to engage in seeming contradictions: mindful web-surfing, focused Twittering and the like. Maybe they'll even attain a paradoxical focused distraction....
eFeedbackEelco van der Wal [email@example.com] compares German and American manufacturing productivity:
"In Germany, the wages on average are not low. Germany is a machine exporting country, which is very important in generating a positive cash flow. In the US, German equipment is used widely because of high output, efficiency and functionality. These are all due to the high level of innovation, which comes from good engineers.
"An important item is the appreciation of 'the engineer', both socially as well as in wages (both probably are related). In Europe an engineer is well accepted and respected, far beyond the 'nerd' issues that are made fun of in the US.
"I just returned from the Hanover Fair. While it is not as big as it used to be, you see a lot of initiatives to involve youth in technical schools and jobs. Issues like 'Tech to you' bring young people in by busloads. And special events like robot soccer games are organized for them.
"Another point: even operators and maintenance people in Europe are much higher qualified then in the USA. This first makes you think that would increase production costs. But they don't. They just make better cars."
"It is unsustainable, as people such as Bill Ford and Jeffrey Immelt have stated many times. Because services are fungible in nearly all cases, we are going to see a huge drop in US market potential in the coming decades. It's too bad, and it should be stopped."
"I decided to learn French 4 years ago to show my French colleagues that we Brits are not totally useless at languages. A major plank in my strategy was to memorize vocabulary. For this I used a package called Supermemo. It works on the principle that the only way to get something into long-term memory is to recall it from a short term memory before you forget it.
"Supermemo uses a statistical algorithm to predict the ideal time to ask you to recall something. Just add a word into the database and it will never let you forget it. You spend the least amount of time learning the most. It is an exponential process, in that you recall it after say 1 day, 3 days, 1 week, 1 month, etc. I used to do this at school using bits of paper (before PCs were invented) but a computer is the only really practical way to do it. I needed to spend only about 5 minutes every day to service a vocabulary of about 6000 words."
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