JimPinto.com - Connections for Growth & Success™
No. 296 : 23 June 2011


Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Whither Invensys?

Invensys Operations Management (IOM) performance in the year ended March 2011 was "stonking". (I'm quoting Brit Nick Denbow of Industrial Automation Insider). In fact, IOM made up for the shortfall at Invensys Rail and a standstill at Invensys Controls.

IOM revenue for the year was up 15% at 1,147M ($1.9B), and bookings were 1,124M, up 16%, with operating profit for the year of 123M, up 34% on last year, showing a margin of 10.7%, still behind the 16.7% achieved at Invensys Rail. The troubles at Rail lowered their margin from 20.7% in the previous year.

Actually, Invensys Rail achieved a bigger profit than IOM, at 129M, on revenues of 772M (10% up on last year), apparently due to the lack of future orders.The question arises - why the resignation of respected Invensys Rail CEO James Drummond? And the earlier question: Why the sudden firing of CEO Ulf Hendrikkson. There have been no explanations.

Wayne Edmunds, who spent 2 years as CFO, was made CEO, replacing Ulf. He announced blithely that Invensys has decided to move away from centralized functions and matrix management, towards more of a holding company model, with divisional management having greater control and responsibility for their operations. This conveniently eliminates the need to appoint Ulf's replacement. IOM (run by Sudipta Bhattacharya) and Rail (by Kevin Riddett) continue to operate independently.

Kevin Riddett, the subject of widespread ridicule and derision (read the Invensys weblogs) took over as Rail CEO, after 2 years as CEO of Invensys Rail North America. He keeps blabbing, apparently to anyone who'll listen, that Rail will be sold soon to China. Apparently, this got Ulf fired - but Riddett seems to say it with immunity.

Our focus is Industrial Automation, and so we'll analyze IOM results. Nick Denbow quotes product splits as 60% in control and safety systems, 20% in advanced applications and 20% in equipment. InFusion ECS (Enterprise Control System) sales are spread across all categories. The surprise is that Foxboro, Eurotherm, Eckardt etc) are less than 20% of the total.

For the future, over 60% of the IOM 1,124M order book is from emerging markets, compared to only 37% for the last year. This existing order book already represents 98% of last year's revenues.

Behind this is the recent signing of four major deals in China for nuclear plant control and safety systems, making up the major part of the future order book for IOM.

Sudipta reported that bookings exceeded $2B for the first time, and confirmed that future investment would continue to focus on the core safety and control business, and advanced applications (SimSci, Avantis, Mobility and Wonderware), establishing a solid platform for future growth, plus differentiation between IOM and other automation suppliers. This seemed to me to be a pitch to whoever was interested in buying IOM.

Clearly, with an accountant in charge, Invensys is being readied for sale, probably IOM and Rail separately. Wayne Edmunds happily announced that the pension problem was being resolved, clearing a major obstacle to a clean sale of all the pieces. Wayne Edmunds and the Board are preparing this not as a fire-sale, but with the best foot forward to get top-dollar. Of course, few (other than some astute analysts) present this conjecture.

Most of the information included here are from Nick Denbow's "Industrial Automation Insider", June 2011. The extrapolations and conjectures about Invensys being prepared for sale are mine, extrapolating on some savvy weblogs.

Stay tuned. We'll soon see if Pinto is simply shooting in the dark.

Click Invensys - results, reports & presentations

Click Gary Mintchell's Feed Forward - Invensys reveals positive FY11 results

Click Invensys weblogs

Click Industrial Automation Insider website

Click Get your subscription to Automation Insider

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South Africa Webinar - 6 July 2011

On July 6, 2011 (a couple of weeks away) I'll be doing a Webinar, hosted by South African Instrumentation & Control magazine Editor Steven Meyer. It will be streamed live from my home office in San Diego (USA) and Johannesburg (South Africa).

My subject will be "Emerging Technologies and Opportunities in Factory Automation and Process Control". Here is a point-summary:

  • Productivity has now become a global race.
  • Technology improves productivity and wins market-share.
  • Automation will continue on the technology treadmill, with products widely available from fast-advancing global competitors.
  • Industrial products will include more intelligence, with adaptive functionality and diagnostics to minimize the use of trained operators.
  • Industrial wireless is growing fast and market share will go to those who use wireless imaginatively to reshape industrial markets.
  • Machine-to-machine (M2M) communications will yield significant benefits.
  • The next decade will bring significant new technologies such as MEMS and nanotechnology (including tiny sensors, actuators, power sources), pervasive Internet, advanced industrial robotics.
You might wish to sign-up for this free webinar. It doesn't matter where in the world you are located, in which time zone - you can register and listen later.

Date: 6 July 2011
Time: 15:30 (GMT + 2 hrs) - 6:30 AM Pacific Time

Click Registration is required to join this event. Register at

An open question and answer session will be available during the event. If you have questions that you would like to submit BEFORE the event, please send them to Steve Meyer.

Click Please send questions to Steven Meyer

Click South African Instrumentation & Control magazine

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Visit to Brazil - NEI Speech plus spectacular Rio

Brazil, the "B" in BRIC (Brazil, Russia, India, China - the fastest growing countries) has become an economic powerhouse, turning into one of the world's hottest emerging markets.

The world's eighth largest economy, Brazil has become the number one exporter of products such as coffee, sugar, poultry, beef, orange juice, ethanol and tobacco. Unscathed by the global financial crisis, Brazil remarkably finds itself on a better economic footing than before the international economic meltdown.

This month (June 2011) I was in Sao Paulo, Brazil, to speak at the NEI International Industrial Conference & Show - Emerging Technologies, Challenges, Opportunities and its Impact on Manufacturing. My subject was, "Prospects for Automation and Instrumentation on the Plant Floor".

The NEI Show & Conference was held for two days at the Convention Center Frei Mug in Sao Paulo. Leaders, major suppliers and users gathered to discuss the latest relevant issues, exchange experiences relating to industrial products and solutions.

It was a unique event, the first of its kind in Brazil, featuring two days, more than 25 speeches and presentations by national and international speakers and technology experts.

The exhibition area featured several primary companies in Brazil markets, with interactive hands-on table-top demonstrations, where exhibitors presented their technologies, products and services. The agenda included time for conference participants to interact with speakers and sponsors, to help develop closer business relationships.

I was happy to meet Nelson Ninin, President of Yokogawa Brazil and 2010 President of ISA, the first from the Americas and the second international person to hold that position (my good friend of many years, Pino Zani from Italy, was ISA President in 2001).

We had a delightful dinner at the home of old friends, Nelson Freire and family in Sao Paulo; their Brazilian warmth and affection made the 20 years since we met seem like we'd seen each other yesterday. It was wonderful to see Nelson's wife Dirce, an accomplished pianist, play and Nelson sing, and I simply had to join in! The memories of us all singing together, and twins Luis Antonio and Nelsinho playing the guitar and singing, will always stay in our memories.

Following our visit to Sao Paulo, we spent a few days in Rio de Janeiro, a repeated bucket-list trip for me. We stayed at a Copa Cabana luxury hotel and enjoyed the beaches (free from summer crowds). Of course, we just had to go in the cable-cars to the top of Sugar-loaf mountain to view the spectacular Rio panorama, and to the Corcovada to stand beneath the giant statue of Christ the Redeemer, which is visible from almost anywhere in Rio. Wow, what a trip!

Click The NEI International Industrial Conference & Show (Portuguese)

Click You may wish to download a copy of my presentation (English)

Click Brazil - What's Behind its economic success?

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Automation in the Clouds

Cloud computing means using large, remote Internet-based servers in the same way as if they belonged to your own company. Very large data pipes allow large groups of server farms to appear as if they are local. The result is huge economies of scale and focused communities of excellence.

In the automation world, the benefits of cloud computing are still being weighed against the risks. Process managers and automation engineers are averse to putting their operating software and plant information on remote servers, primarily because of perceptions of reduced security, questionable availability and uncertain location, even though company-owned servers are already somewhat distant and inaccessible.

The use of virtualized servers is becoming attractive for end users. Already, fewer, larger servers are being used to run multiple applications such as workstations, historians and human-machine interfaces (HMIs), and those are mostly remote in any case. Moving to cloud servers has many advantages beyond just space consolidation.

In any event, moving an actual distributed control system (DCS) to the cloud is not likely to happen quickly. However, secondary processes and systems such as HMIs, historians, training systems and engineering workstations may well be moved, albeit tentatively, as plant managers become more comfortable with the concept.

The integrated information model must span the entire enterprise regardless of size, geography or complexity, integrating multiple tiers of information - manufacturing execution systems, automation systems and enterprise applications - to drive planning and execution closer together. Cloud-based applications and information exchange is the best way to service this new global infrastructure.

The key point that fuels doubts is: How secure (safe and spy-proof) is the remote data? Amazon, one of the largest suppliers, recently had a widespread outage that temporarily crippled some of the highly trafficked websites and data centers it hosts.

Cloud computing is spreading throughout the IT world and looks like a classic disruptive technology. It will be used in more and more factories and process plants as the cost savings and reliability are demonstrated. The next five years will see the steady emergence of cloud computing in the automation world.

Click Automation World (June 2011) - Automation in the Cloud

Click Cloud computing hasn't gone Fortune 500 yet, but it's coming

Click 'Cloud' computing's reliability gap

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Kinect Revolutionizes Robotics

For decades, robotics had a fundamental problem: A moving robot must be able to create a map of its environment. The tools for this are known as simultaneous localization and mapping. But the sensors required to have any reasonable accuracy were expensive and bulky, and required massive computing power.

Then Microsoft released the Kinect, a $150 add-on for Xbox 360 that allows players to direct the action in a game simply by moving their bodies. While most people were fascinated by the controller-free interface, roboticists saw something else entirely: an affordable, lightweight camera that could capture 3-D images in real time.

Within weeks of the device's release, YouTube was filled with videos of Kinect-enabled robots. When something is that cheap, it opens up all sorts of possibilities. Now just about anybody can play with robots that have revolutionary functionality.

Microsoft's official response to all this "hacker" activity has gone from hostility to acceptance to vigorous support. They are just about to release a software development kit that makes it easier for anyone to build Windows applications using the Kinect's camera and microphones.

Microsoft is also granting access to the high-powered algorithms that help the machine to recognize individual bodies and track motion, unleashing the kind of power that was previously available with expensive, high-power computers in top-class laboratories. Microsoft is working on a commercial version of its software development kit that will allow entire new businesses to startup using the Kinect's technology.

When Do-it-yourselfers combine those cheap, powerful tools with the collaborative potential of the Internet, they can come up with the kinds of innovations that once came only from big-budget R&D labs. For $150, the Kinect includes some high-powered hardware.

But until now, no company has made it so easy to hack into a product as popular as the Kinect, the fastest-selling consumer-tech product of all time. The Kinect racked up 10 million sales in just four months. That means 10 million people now have fully functioning depth cameras (which measure the distance between the Kinect and objects in front of it) sitting in their living rooms.

Microsoft is giving everybody the tools, and its blessing, to build new applications. "We're trying to usher in a new era of computers, a world of tomorrow" says Xbox general manager of incubation Alex Kipman. He adds that the Kinect's gesture-based interface is an early example of how we will soon interact with all of our computers and appliances.

Now that the drivers were public, every day seemed to bring an exciting new innovation. Everyone is now playing with Kinect and xBox. Watch for major advances and inflection points in robotics technology to emerge with dazzling speed.

Click Kinect Hackers Are Changing the Future of Robotics

Click Video: Control the Humanoid Robot by Kinect

Click Kinect's Greatest Hack: A Gesture-Control Robot

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eFeedback

Michael Marullo commented on the common thread in several recent issues of eNews:
    "Complacency: There's evidence all around us (the term 'us' meaning primarily - but not necessarily - 'U.S.') that we are mired in the unachievable goal of restoring the past.

    "As you and others have said many times, the vast majority of traditional labor-intensive factory jobs simply are not coming back. Any attempts to change that trend have little if any potential for success.

    "In my view, the overriding problem here is the propensity for so many people to invest their time, money and other resources in trying to preserve or resurrect the past rather than investing those efforts and resources in creating the future - a new future targeting the challenges of the 21st century - as opposed to the protracted melancholy about our losses in the last one.

    "The really sad part of this 'retrospective thinking' is that it drags down our ability to create, invent and innovate in a cohesive and productive way. I truly believe that if we can focus our collective attention on solving the problems we are facing today, rather than futilely trying to re-solve the problems of the past, we'll all be a whole lot better off - and a whole lot sooner."

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Joseph Waszgis teaches human-machine-interface (HMI) classes all the time, and had to comment on my recent article on "Operator Paradox":

    "Jim, you posed some good questions that really have to be considered. If the Operator Interface is left with opportunities for the Operator to break the process or machine to get out of work, they will find that hole and exploit it. Example, leave out some Min / Max Limits to a data entry field and the Operator will find the right number to break the machine.

    "I try to teach 'Make it Idiot Proof,' but then comes along a new Idiot who proves my goal wrong. But one does have to keep trying to stay one step ahead."

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John Pietila from Australia writes about the value of College Degrees down under:

    "I fully agree with the sentiments expressed. I am not University degreed, but have NEVER found this the main problem in doing my 50 year plus jobs in industrial automation. For me the ability to keep up with the current technology is far more important (and challenging), particularly in sorting the needs and wants.

    "Sadly there is much over-complication in providing effective automation. Anyone agree?"

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