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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.
Contents:
- 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.
Financials
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.
Engineering-driven
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.
Software
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.
Siemens website
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:
- 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.
- 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.
- Free-space optics: High-speed Internet and Intranet connections for
the "last mile" - without tearing up the streets to install cables.
- 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.
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...
The Totally Cool Wireless Car of the Future
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.
Moore's Law & Order
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.
The 3 Technology Laws
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.
Astronomy picture of the day
Archive of all previous Astronomy picture-of-the-day images
eFeedback
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
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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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