JimPinto.com - Connections for Growth & Success™
No. 82 : April 18, 2002

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

  • Siemens - American manager's view
  • Wireless technologies you can bet on
  • Telematics - the wireless car of the future
  • Kuzweil - picking up after Moore's Law
  • Astronomy - Picture of the day
  • eFeedback:
    • With the 'digital cockpit', global borders are fading
    • CEOs, movie stars, ball-players get paid what the market will bear
    • JimPinto.com eNews brings at least an occasional jewel

Siemens - American manager's view

I remember asking the elderly father of a German business colleague what he would wish for his son. His unhesitating reply: "That he will become a Director of Siemens!"

Although it also has diverse operations in many other markets, Siemens - current revenues about $75b - is easily the largest industrial automation company in the world.

What is it like working for Siemens? I asked several managers who have worked fairly high up in the US Siemens organization. Here is a summary of their collected insights:

    Management Hierarchy
    Siemens is the quintessential German company - all major decisions are made in Germany. Country mangers are viewed primarily as sales managers who implement strategies defined in Germany. The head of the US "holding company" is located in New York, N.Y. Automation & Controls in the US is part of Siemens Energy & Automation, based in Alpharetta, GA.
    Planning & Implementation
    In general, Germans are more thorough in analysis and planning than other Europeans and Americans. They create a detailed plan which is 'engraved in stone' with expectations that it will be met regardless of change. By comparison, Americans tend to create a high level plan and then adjust with new information. Siemens US management operates in step with the German stereotype.
    Global financials are shown in the annual report (available on the Siemens website). US figures are consolidated for all US Siemens businesses. Profit objectives are low by US standards; country managers are expected to generate 5-10% EBIT, recognizing that most products are manufactured in Germany and transferred to the US for local sales. The profit is retained in Germany via arms length transactions which meet US GAAP. There is a great emphasis on improving operating results, including EVA performance. Siemens is now listed on NYSE, which will be interesting to watch.
    Historically, Siemens has been an engineering company with the expectation that technology advantages will drive success. Most products are manufactured in Germany and exported to the country sales organizations. Siemens is still learning how to be a marketing company. Geographic markets are handled via indirect sales channels (OEM's, Distributors, System Integrators, Consulting Engineers, etc.), which has limited end-user influence. However, Siemens HQ has begun to realize this and they have created a global account management network to manage some 50 to 75 global accounts.
    Automation Products
    Siemens has process automation and control spread across four major business units: Automation and Drives; Industrial Solutions and Services; Power Generation; and Building Technologies. The tremendous industrial products portfolio is under exploited: DCS, PLC, Drives, Motion Control, Fieldbus (Profibus) and more.
    Siemens has it's own version of control software called WIN CC which is the platform for PCS-7. Siemens recently acquired ORSI in Italy and also has a "soft" PLC software called WIN AC. Software products are a key part of the business strategy for Siemens, but development is typically internal, versus acquisitions.
    US Acquisitions
    Siemens has made several automation and control acquisitions in the US market over the past 3-5 years - Applied Automation, Moore Products, Milltronics - to expand market access. Past acquisitions like Texas Instruments (PLCs) and Westinghouse (Power Generation Business Unit) are viewed internally as financial successes, but have not boosted Siemens out of the second tier category in the US. They always seem to have difficulty with the integration of US acquisitions, lacking the integration structure and methodology of a GE.
Pinto Prognostications
Even in a high-tech global village, it is interesting how cultural barriers remain. Siemens is blinded by their long-term success in Germany and can't seem to grasp the point that they are a second tier player in the US. They acquire good companies, but quickly neutralize them by enforcing a culture that works well only in Germany.

Siemens has the financial strength to acquire almost whatever they wish. So if Invensys, Honeywell or others become available, Siemens will always be a serious and viable buyer, looking for more market-share. It should be noted that a move to acquire Rockwell Automation would probably trigger anti-trust actions.

Click Siemens website

Click US Analysts - Siemens Financial Summary

Wireless technologies

By 2004, nearly 800 million people will use mobile devices daily. Wireless communications is increasingly data more than voice, with a nightmare of competing standards and sliding costs. Technology is arriving piecemeal and continues to change at breakneck speeds.

Here are the key wireless technologies that you should track:

  1. Wi-Fi (wireless fidelity): Plugs into existing networks and provides fast Ethernet connections without wires - Wi-Fi PC Cards in laptops pick up wireless signals from base stations located wherever needed. Wi-Fi runs at 2.5GHz and will offer connection speeds as fast as 11 Mbps.
  2. Bluetooth: This allows devices to communicate at speeds up to 1Mbps within 30 feet. So, for example, you can check in at a hotel without standing in line, or connect to the Internet while you sit in an airplane or the airport lobby (through a Bluetooth connected base-station), or send e-mail from your PDA using the address book in your laptop, or pay for a soft-drink with your cell phone.
  3. Free-space optics: High-speed Internet and Intranet connections for the "last mile" - without tearing up the streets to install cables.
  4. 2.5G and 3G: High-speed voice and data wireless services. 2.5G is a half generation between today's second-generation digital cellular networks (2G) and tomorrow's third-generation high-speed cellular (3G), equivalent to a DSL or cable-modem.

Click Wireless Technologies to Bet Your Business On

Telematics - the wireless car of the future

Telematics - technological gadgets for cars - will become more and more common within a few years. Lots of this stuff is already available, though right now the price point is a bit restrictive and most of the functions remain high-end options. Services that are worth a monthly charge are already growing fast with the cost supplemented by location-based advertising.

Front-seat telematics includes global positioning system (GPS), e-mail, voicemail, central comfort controls, and entertainment options. All sorts of data will be available in the car - from where to go shopping (advertising potential) to various points of interest in the neighborhood. Back seat telematics provides entertainment services such as movies, games and music on demand.

Bluetooth (short-range high-speed wireless) completely changes the paradigms of telematics - it allows people to interact with their in-car telematics system without actually being in the car. Using a Bluetooth device - such as a PDA or mobile phone - and standing within 30 feet of a car, a user could tap into the network of information provided through the telematics system, or even access the security-system and start the car.

Some Telematics (hidden) will help the manufacturer - keeping track of mechanical information and reporting data back to measure and avoid failure of parts and equipment.

Smart-cars with smart highways will eventually make driving a passive activity. The technology is envisaged as collision-avoidance systems that can detect the proximity of other objects so that drivers, ultimately, would not have to drive. All they'll need to do is tell the car the destination and when to stop so that they can go to the toilet, or get something to eat. But, availability is still out in the future because of the infrastructure cost.

Interestingly, the major US testing program for driverless smart-cars is located just a few miles from my home in San Diego, California, on a restricted car-pool lane that I often use. I haven't actually met any driverless cars though...

Click The Totally Cool Wireless Car of the Future

Click San Diego, CA - Look Mom, no hands - Driverless-car program

Kurzweil - picking up after Moore's Law

Moore's Law (doubling of computing power every 18 months) has been widely accepted for decades. However, some think that it is destined for a head-on collision with the laws of physics by about 2015 - the size of silicon transistors cannot be less than a few atoms thick.

But in a larger sense, Moore's Law also describes exponential growth of raw computational power, irrespective of technology. Innovations such as 3D circuits as well as new paradigms like molecular transistors, carbon nanotube gates and quantum computing, will probably continue to produce exponential growth for many more decades.

Inventor and visionary Ray Kurzweil expects the process to continue at a double exponential rate - acceleration of the acceleration. In his eagerly anticipated book: "The Singularity Is Near" Kurzweil suggests a continuum along which Moore's Law accounts for a relatively small stretch of technological progress. The larger view, which is coming to be known as Kurzweil's Law of Accelerating Intelligence, foresees faster growth in computational power - and consequently synthetic intelligence - over the next several decades. This excellent article in eWeek summarizes the impending end of Moore's Law and the arrival 0f Kurzweil's Law.

Click Moore's Law & Order

Click Ray Kurzweil on "The Singularity":

In the industrial automation business, virtually all industrial I/O products and processes will continue to benefit from significantly expanded embedded intelligence and connectivity. With more power at vastly reduced prices, automation methods will extend from factory and process controls to a much broader range of applications in other markets.

Click The 3 Technology Laws

Click Published by AutomationTechies.com, Apr. 2002

Astronomy - pucture of the day

Discover the cosmos! Each day a different image or photograph of our fascinating universe is featured, along with a brief explanation written by a professional astronomer.

Click Astronomy picture of the day

Click Archive of all previous Astronomy picture-of-the-day images


After reading Jack Welch's comments regarding transferring engineering work offshore, Bart. R. Schaminée [Bart.Schaminee@GEFANUCEUR.GE.COM] from GE-Fanuc in Europe wrote:
    "The export of know-how is not new. Since years, a multi-cultural mix of people who have the know-how has served projects in heavy industry. In technical projects this is getting more attractive because the controllability is improving with digitization of information - we call this 'the digital cockpit' within GE.

    "Jack Welch is right. The world is opening up. Transfer of design work is a trend that started years ago, and is accelerating because of easier communications and controllability. We can expect more of this in the coming years, since it results in cost-reduction. The shareholders heavily support this, since they are simply interested in profits.

    "In short: The world is globalizing and business borders are fading."

Ken Biele, [Ken.Biele@EmersonProcess.com] had this to say about CEO pay:
    "Let's not forget about the others in our society with large paychecks - e.g.: Baseball players, movie stars. Is a ball-player making $22M, a Hollywood actor getting $27M for a single film, or the $100M Seinfeld was offered for just one more season any worse than the pay of today's CEOs?

    "Personally, I think the business leaders add more value to the world as a whole, and I am not really bothered by any of it. It is just what the market will bear."

Henry Swanson [mailto:hxs@meadwestvaco.com] read the Carver Mead speech mentioned in the recent eNews, and provided this feedback:
    "I'm a process control professional and subscribe to the JimPinto.com eNews to get information that is not available through traditional channels. Like most others in the field, I put in 80-hour weeks, drink too much coffee, and have an intolerance for irrelevant chatter.

    "This month I suffered though the accounting analysis, the CEO pay diatribe, and the report on military superman suits. I was just about to give up when I happened to click on Carver Mead's wonderful speech. Wow, what a joy and useful paper to read and think about!

    "Once again you've provided fabulous off the wall information outside of the mainstream that was great to read. I'll continue to be a loyal subscriber in the future as I have been in the past. Keep it up!"

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