JimPinto.com - Connections for Growth & Success™
No. 300 : 25 Jan. 2012


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

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Pinto 3 month eNews sabbatical

You may have noticed that you haven't received your "irregular and irreverent" copy of JimPinto.com eNews for about 3 months. Many people have enquired, via email, Facebook and Twitter. Somewhere out there in the world, my old friend Bob Schaefer even says he has missed his "regular Pinto fix". I appreciate your interest. Here are my "excuses" for this long sabbatical.

Here's the wild-card: At the end of July, I sold my home of 25 years in San Diego, just before I took that bucket-list trip to Ayer's Rock & the Great Barrier Reef in Australia during August.

Then in early November, I went off to that keynote speech in South Africa (11 hours non-stop from San Diego to London, and then 11 hours non-stop to Johannesburg; whew!) with a quick visit to my brother in England on the way back.

Between these travels, I was staying with friends while I was looking for my dream condo on the beach. Well, I found that condo - in Carlsbad, about 30 miles North of San Diego. It's right on the beach in Carlsbad Village, with scores of restaurants and delightful shops in walking distance. I couldn't be closer to the water.

These days, I wake and sleep to the sound of surf. I watch the flying lines of pelicans as they pass in close proximity on their way back and forth between the 3 lagoons in Carlsbad. I've watched in delight as dolphins frolic past and have even seen a whale spouting and jumping out of the water (not yet whale-watching season, mind you). And I'm getting on a first-name basis with some of the seagulls.

Well, by the time I got back from my travels and started to settle in my new home, it was the Christmas season, with visits from family and friends, and then the New Years holidays. And I had to meet my deadlines for my regular columns in Automation World and the other year-end prognostications, as promised for several other worldwide journals.

Hey, I'm supposed to be retired. But then, I define "retirement" as doing what I enjoy. I enjoy traveling on my consulting and speaking engagements and "bucket-list" trips. And I enjoy writing.

My good friend Jack Grenard says, "A writer is a person who cannot not write." You know, I still had that nagging feeling that I was missing something - my eNews writings. It kinda grounds me as I write these thoughts and ideas and click them away to some 10,000 readers and receive your e-feedback, which regenerates my thinking, gets my ideas brewing and my juices flowing.

So, that's the reason for my 3-month sabbatical. Well, here I am again. JimPinto.com eNews # 300, January 2012.

Click My hometown - Carlsbad California

Click Seashore on the Sand - Live webcam

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Invensys Top-level Changes & Loss Warnings

So again, there are major changes at the top in Invensys. IOM CEO Sudipta Bhattacharya was fired after 3 years and Mike Caliel (long-time Foxboro employee and CEO of IPS who had quit previously) was appointed in his place. Here's a summary of what happened.

Mike Caliel, an Invensys employee since 1993, was made CEO of Invensys Process Systems (IPS) around 2004 by the then CEO Ulf Hendrikkson. Mike rekindled the Foxboro spirit of the pre-Siebe days and re-energized the talent that Invensys had still retained, building the "New" IPS.

Something went wrong in June 2006 and Mike Caliel resigned, giving no specific reason. A half-year later, in January 2007, Ulf hired Paulett Eberhart who initiated big, irreversible changes, the most damaging of which was to move the HQ of IPS from Foxboro, MA. to Plano, Texas. After she had been there 2 years, Paulett was fired suddenly at the end of 2008; strangely, Ulf never ever provided the reason for her firing.

Then Sudipta from Wonderware took over the Division CEO role and changed the name to Invensys Operations Management (IOM). It was too late to bring the HQ back to Foxboro, MA. Foxboro (the once much-admired giant in the instrumentation industry) remains an adjunct to the hodge-podge of IOM businesses.

In March 2011, just before fiscal year-end, Ulf himself was fired leaving CFO Wayne Edmunds in charge as CEO. Apart from the sweet nothings of the exit announcements, the reasons for Ulf's exit are not known and he remains unemployed.

Then, in mid-January 2012, came the surprising profit warning announcement (which might explain Sudipta's sudden departure about a month before). Invensys said it had reviewed three contracts in China in its IOM division, and had discovered delays and extra engineering work that would cost 40m. One contract for four reactors, worth around $250m (163m) would now be loss-making.

The announcement warned that the other divisions, Rail and Controls, also have problems. As a result Invensys stock lost more than 20% of its value on one day. This must surely be a sore disappointment to the CEO and Board who have been looking for reasonable value in a quick acquisition. Meantime, there is widespread speculation about what Mike Caliel will do and indeed what he will be "allowed"to do, given Invensys' precarious status.

Ex CFO, now CEO, Wayne Edmunds has likely been spending most of his time looking seriously at how to offload the Invensys pension-plan that weighs down the value in any possible acquisition. Siemens will likely buy the IOM piece, while Rail will go to China. Who knows who will buy ailing Controls?

The Invensys weblogs buzzed with told-you-so-ages-ago commentaries and speculations. Read for yourself.

Click Invensys shares crash on profit warning

Click Gary Mintchell Analysis: Another Change At The Top For Invensys IOM

Click Read the predictions of doom on the Invensys weblogs

Click Industrial Automation Insider website

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CONTROL 2010 Top 50 - Pinto Summary

Once again in December 2010 CONTROL magazine published its list of TOP-50 Automation & Control suppliers - with separate rankings for global and N. America.

One problem remains: Since these are all public companies, the data is about a year old, taken from the annual reports for their fiscal years 2009, some ending in 2010. Today's rapid changes make the numbers almost too old. Likely the real 2010 year-end results will tell a different story. The only possible solution to this "old data" problem is for CONTROL to do this report in mid-year, when the data is still fresh.

Still, I provide a review and brief analysis of the annual 2010 industry results from my own perspectives.

Here's a table-summary of the Industrial Automation Top-10 rankings, for Global and North America.

Global
North America
Rank$B Rank$B
Siemens 112.9 51.41
ABB 2 10.93 1.62
Emerson 3 6.51 3.33
Rockwell 44.4 22.23
Schneider 54.4 70.91
Mitsubishi 63.5 300.14
Danaher Industrial 73.2 41.58
Yokogawa 83.0 200.26
Honeywell Process 92.8 80.72
GE 102.2 61.15
Omron 112.2 220.25
FlowServe 121.8 100.61
PHoenix Contact 131.8 190.27
Invensys 141.8 110.53
Endress+Hauser 151.7 160.34
Ametek 161.3 90.67

Emerson, Rockwell and ABB retain their ranks at the top in N. America, with the same ranks as last year globally. Siemens drops to 5 in NA, behind Danaher, reflecting the poor job they have done with US acquisitions. Honeywell Process hads dropped from 6 to 8 in NA, while Schneider and Invensys retain their ranks in both NA and globally. GE and Ametek move up the ranks.

Here are some of the companies I keep an eye on:

  • Omron is 11 globally but only 22 in NA
  • Yokogawa is still only 8 globally and 20 in NA Phoenix Contact has advanced to #13 global with $ 1.8B global, far ahead of its old rival Weidmuller at $0.73 # 28
  • Endress+Hauser is 15 globally and 16 in NA
  • National Instruments is 15 in NA and 22 global with $0.87B
  • Beckhoff is 42 global but not on the NA top-50 - only honorable mention at $35M in NA. Note: Good growth in2011
  • Opto-22 has grown to $75M; SMAR is at $90M; Iconcis at $ 33M
  • China's Hollysys is at $94M - could be a growth vehicle for China
  • OSIsoft grew from # 35 to #32 in NA, but still not on the global list, with an honorable mention at $ 204M global
  • Mini-conglomerates:
    • Spectris is still only $1.23B #19 global;
    • Ametek $ 1.4B # 17 global but advanced to #9 in NA;
    • Roper at $.6B has fallen from #28 to #32 global
In just the last couple of months, the automation majors have announced significant increases in bookings and profits. The automation business is doing well - most of the Top 50 indicate that their projected sales funnels are full, perhaps into 2014 and beyond.

Many of the majors are hoarding cash because they are worried about the uncertain future. The acquisition binge hasn't really started because of this uncertainty, but it will begin soon enough. Stay tuned.

Click CONTROL Commentary - 2010 Top-50 Automation Companies

Click Top-50 Global Automation Vendors

Click Top-50 North American Vendors

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Pinto 2012 Automation Prognostications

I have a hunch that 2012 will not be another same-old, same-old year for industrial automation. Expect opportunity niches to arise around industrial wireless, Ethernet, mobile interface technologies.

Here is a summary of my technology-picks for 2012, as published in Automation World, January 2012.

  • Industrial wireless: Standards are settling down into reality. Major suppliers are reporting revenues in the tens of millions of dollars. New markets and applications are generating revenues and market acceptance.
  • Industrial Ethernet: In the automation environment virtually everything is being connected to everything else via central networks and the Internet. Automation systems based on standard network architectures are spreading everywhere. Enhanced industrial Ethernet protocols such as EtherCat, ProfiNet, Modbus TCP and EtherNet/IP will continue to proliferate.
  • Pervasive Intenet: Today's centralized controls and displays will give way to peer-to-peer input/output (I/O) and the other ingredients of decentralized automation systems. Industrial I/O products will become increasingly more autonomous in functionality, with vastly more robust operation in systems that include literally millions of I/O points.
  • Portable operator interface: The old-style operator control console interface is giving way to access via ubiquitous, compact WiFi equipment. More diagnostics and service functions can now be viewed via mobile phones, with cheap but effective two-way audio and video visibility. Most automation companies are now offering advanced features and functions using iPad, iPhone and Droid apps. This trend will expand quickly.
There are several growth opportunities hiding in plain sight and entrepreneurs - the risk takers - will see them first. Perhaps, some of the recently unemployed will be the ones to jump at the possibilities.

There are an incredible number of exceptionally talented individuals scurrying around the automation infrastructure, looking for an "opportunity" niche. This is their time to grab for the gold.

Click Automation World: Pinto Prognostications 2012

Click Check out Pinto's Prognostications 2011

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Technology & Business Futures

Steve Jobs said that the best way to predict the future is to invent it. A few like him may indeed be able to invent the future, but most of us must simply react to it.

It's useful to think about what may happen in 5-10 years so that we can react, deploy resources and develop products and services that anticipate change. Take a look at Fortune's guide to the future.

The coming changes will be uncomfortable for some. The term "boss" will become an anachronism. There will be democratization of the workplace. Hierarchies will disappear and many teams will function without leaders. The best ideas may come from juniors, some outside the organization altogether. More companies will engage in "crowd sourcing" - piecing out jobs or even parts of jobs to whoever can and wants to do them.

Looking shorter term, my friend Perry Marshall comes up with predictions for 2012: Europe, USA and Asia will have major economic corrections; social media is a hotbed of demographic and psychographic insights; massive Asian middle-class; affluent people will have second-residences in developing countries; four winners - Amazon, Netflix, Spotify and Pandora.

The UK Guardian comes up with its list of 2012 predictions: Mobile wallets; free phones and messaging; Apple TV - I already spend $50/month watching the latest movies whenever I wish, with no commercial interruptions; I predict the death of commercial TV with a decade.

As one begins to think about the further-out future - a century away - some things become obvious. Here are some of my selections from a BBC News list: Oceans will be farmed; Antarctica will be settled; single worldwide currency; only 3 languages in the world - English, Spanish and Mandarin; marriage will be replaced by short-term (annual) contracts; there will be a world government; wars will be fought completely by remote-control.

Click Brave new work: The office of tomorrow

Click Twenty top predictions for life 100 years from now

Click Fortune's guide to the future

Click Perry Marshall - 10 Predictions for 2012

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eFeedback

Jerry Lyons [jerry.lyons@rawsonlp.com] wrote his own poetic response to my Occupy poem. Bravo, Jerry!
    "Jim, I've enjoyed your commentary for years. Automation Unplugged and Pinto's Points (autographed) are in my library, dog-eared and well-studied. I look forward to my laptop's twinkle when your e-news arrives. Your thoughts and predictions concerning the major Instrumentation players have let me pick up trends and hints that helped me in my Instrumentation Sales career.

    "I repeatedly studied your theory on 'Never be the Lowest Bidder', made it a way of life, and have been quite successful by doing so. When given the opportunity to advise younger salesmen, I always steer them to your 'Never be the Lowest Bidder' on You-tube and encourage them to strive to gain applications knowledge on their customer's process and in doing so, become more valuable to him than his competitor. Heck, I've even suffered through your singing on You-tube!

    "You and I agree on many things. I like and respect you. But, after reading your Occupy poem, I was drawn to respond. On this, we disagree. The Occupy group demonizes the business community. I think their criticism is misdirected.

    "What better way to respond to a poet than with a poetic rebuttal? But I'm a Control Valve peddler, not a poet (as you will see). Below is my first attempt at poetry since elementary school. I hope you'll read it and accept in the friendly light that it's offered."

    Ballad #2: Occupy Wall Street - By Jerry Lyons

    Yes, back in September, it did start out slow
    They were tired of job-hunting, where else would they go?
    They bunched up to bicker, stink, insult and abuse
    "We covet the rich guys; we'll give them the screws"

      Chorus:
      If you don't like the System, use gradual change
      Don't act like a moron, we don't feel your pain

    They sat in and sat down and swigged gin and juice
    Molested, got arrested, doped up and turned loose
    You know Chris and Barney and Barry conspired
    But let's blame the bankers, "'cause we can't get hired"

    "Yes WE are Democracy", they shout and they smirk
    "Give us our dream job, but don't make us work
    We want the fruits! The labor? No Thanks!
    We all would like checkbooks, the size of Tom Hanks'"

    "Come to Manhattan, be on time, don't be tardy
    NBC, CBS, CNN, join the party
    Who counts?? We've got numbers! and we're not a mob
    Down with you corporation, this here's my new job"

    Joe Six-pack had no time, to read what the Times wrote
    Demos start to suck up, "Hey these dudes, they might go vote"
    There's a wind blowing strong, for leader reversal
    Hey unemployed slackers; clean the park - try dispersal!

    Our credit comes back, when we balance the budget
    End the handouts and programs, for God's sake don't fudge it
    If congress ignores us, the tax-paying masses
    With Tea Party replacements, they'll be out on their asses

    Good jobs are out there, start low and work high
    Don't fall for that "no jobs here" bull, it's a lie
    Oh, another demand, as we head down this road
    We insist put an end, to abusive tax code

    We don't mind to spring, for a righteous expense
    Start protecting our borders, down south, Build that Fence!
    Wall Street hippies nod off, and crack like old leather
    It got too cold to stand, and complain in that weather

      Chorus:
      Take a job, work it hard, your future's not hazy
      Leave the bums in the park with the sick, lame and lazy

    "Note: Who are Chris and Barney and Barry? Rep. Barney Frank (D-Mass.) and former Sen. Chris Dodd, two key players behind the Wall Street reform legislation. Barry is Barack Obama."

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Dennis C. Mueller [dennis.mueller@synchrony.com] wonders why foreign Manufacturers move to America, while some US manufacturers move abroad:

    "One of the big successes I believe we should discuss is the large amount of Automobile manufacturing that has moved into this country from foreign car companies. These are real jobs for Americans, yet American car companies continue to close plants and use more foreign manufacturing, particularly Canadian.

    "If Honda, Toyota, Volkswagen, Mercedes, BMW and Nissan can do it, Why can't GM, Ford, and Chrysler? Boeing wants to build a big plant in SC? And GE is moving a plant from WI to China?

    "I certainly agree we need to get manufacturing back in the US!"

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Pekka Pihlajasaari from S. Africa commented on Mark A. Fee's suggestion that compulsory voting would violate the protection against compelled expression.

    "The Australian legislation that requires those on the electoral roll to vote does not affect their right to free speech (or non-speech as it may be) as they are free to spoil their votes to prevent them from being counted.

    "What it requires instead is, subject to minor administrative penalty in the case of non-observance, that voters present themselves to perform a civic duty in the same way as the court can demand citizens to form part of a jury.

    "While this could be seen as an infringement on freedoms, it is commonly accepted that obligations or duties are a trade-off against the freedoms that are enjoyed in society."

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