JimPinto.com - Connections for Growth & Success™
No. 124 : 30 June 2003

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

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Invensys: the big sale starts, the dance begins

Rick Haythornthwaite, proving that he's better at selling off companies than running them, has taken a big step towards selling 60% of Invensys by hiring several major "investment bankers" (that's just a respectable name for brokers). The sale is expected to bring in about $2.5b, which (with a typical brokers commission of about 2%) should net the brokers about $50m. Not bad for a few months work, huh? Mind you, the banks who are driving the sale probably brought in their buddies.

HSBC is managing the sale of Appliance Controls, expected to raise about £400m. J.P.Morgan Chase will sell Climate Controls, expected to sell for about £500m. And the Water Metering business is being sold by Bank of America, looking for bids around £550m. Morgan Stanley will "oversee" the sales and "advise" Invensys on the "overall disposal program" - which means the others will focus on bringing in the bidders.

There are only a handful of prospects who have pockets deep enough to buy: Siemens, GE, Emerson, United Technologies, Schneider, etc. The Japanese will probably be on the list, though they'll just look but won't buy.

Smaller companies who are interested in just some of the pieces won't be considered at this stage. The due diligence to sell just Eurotherm or Wonderware (for example) would take just as long, and be just as expensive. Invensys can't afford the time or the effort. The smaller buyers will have to wait till the big fish buy the big parts. And, when the new owner is ready to carve off pieces they don't want, the second-tier buyers will crowd around looking for deals. You can imagine the buzz that is already ongoing around the outskirts.

The mating dance of the whooping cranes
A sale like this is orchestrated like some strange "mating dance of the whooping cranes". After a few days (or weeks) of frantic milling around to make it look like they've earned their commissions, the brokers (shall we just call them that?) will prepare a "memorandum" (the name for several bulky binders worth of impressive projections and powerpoint presentations). These will be personalized (looks impressive, but doesn't mean much) and then sent to a designated contact at each prospect. Everything is marked "Highly Confidential" - funny, because lots of people get to take a look.

All the buyers feign interest and assign a bunch of MBAs to study the documents, thereby getting (at the very least) some valuable marketing and business information. Then they send in their visiting teams, to survey the unfortunate companies-for-sale. Few are informed who the streams of visitors are, but everyone knows who is congregating in the conference rooms. And the senior people line up dutifully like a bunch of cattle in a meat-market, not knowing who will be their next boss.

And then the arduous process of collecting the bids begins. This is where the best of the brokers earns their bucks. It's a complicated and peculiar process of pretending to be shocked and feigning naiveté, give or take a hundred million, here and there.

The good part is that the saga will finally conclude. Many good Invensys companies, and their people, will soon be settled under the ownership of another company which has paid a lot of money for them, and wants them to succeed.

And while all this is going on, Rick Haythornthwaite insists that he will turn Invensys around, after selling off two thirds of its assets, and leaving it focused mainly on automation systems. But, there is little doubt about what he will do when some of the bidders (GE, Siemens, Emerson, Schneider) decide that they are interested in what remains.

Click Invensys hires banks to sell energy units

Click Invensys weblog

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Ember's wireless sensor networks

I have featured wireless sensor networks many times in eNews, as products and markets that will expand significantly during the next decade. (See "Pervasive sensor networks - eNews 24 June 2003).

There are 3 basic technologies involved : 1/ Micro miniature, ultra-low-power sensors (usually MEMS); 2/ Embedded chips & firmware for P2P communications & self-organizing systems; 3/ software for communications, control and optimization for thousands of nodes.

The MIT spin-off, Boston-based EMBER is achieving significant advances in this field. MIT-Tech Review recently interviewed Ember CTO Robert Poor about his visions of a world filled with wireless networked devices. Interesting stuff, worth reading.

Ember sells radio chips with embedded processors that can organize themselves into networks to manage real-world data from sensors. The EmberNet self-organizing, self-healing mesh algorithms produce networks that are reliable, flexible, secure, and easy to use. Adding devices only makes EmberNet sensing and control networks stronger and more efficient.

As its markets expand, Ember envisions literally thousands of tiny sensors scattered profusely all over the environment for monitoring, surveillance, control, resource management, optimization, forecasting and prediction. Markets include Industrial Automation (process control), Defense (unattended sensors, real-time monitoring), Utilities (Automated Meter Reading), Building Automation (HVAC Controllers).

Click MIT-Tech Review - Q&A with Ember CTO Rob Poor

Click Take a look at the Ember website

Click Pervasive wireless sensor networks

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Book: The next BIG thing is really small

A century ago, life was primitive be today's standards. Intercontinental jet travel, satellite TV, laptop computers and PDAs, cell phones, the Internet - today's advances could not be imagined just a few decades ago. And the pace of technology continues to accelerate.

Today, we are on the verge of yet another revolution, another truly disruptive technology. Business Week named Nanotechnology one of the "Ten Technologies That Will Change Our Lives". Many people (including me) feel that this is comparable to the digital revolution (computers and the Internet) which changed the face of how business operates. Unlike the Internet, Nanotech will create entirely new materials, products, systems and markets.

Don't make the mistake of thinking that Nanotech is still a long way off. In less than ten years, it will have huge effects on many industries, including manufacturing, health care, energy, agriculture, communications, transportation and electronics. Within a decade, nanotech will be the basis of $1 trillion worth of products in the US alone, and will create a million new jobs.

To get beyond the buzz, the tech and the hype, read this new book: "The Next Big Thing Is Really Small: How Nanotechnology Will Change the Future of Your Business", by Jack Uldrich & Deb Newberry (Pub. March 2003)

Strategic planner Uldrich and nuclear physicist Newberry have teamed up to explain how atoms and molecules are manipulated to create useful materials, devices, and systems: materials 100 times stronger than steel but lighter than plastic, super drugs that eradicate cancer cells without side effects, self-assembling minibots that can reproduce any substance at the atomic level. Read this book to get with it!

Click Take a look at the book - The next big thing is really small

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Automation World - a new leading magazine is born

A significant new automation journal has just published its inaugural issue in June 2003. The founding team left Control Engineering (now part of Reed Elsevier) to form Summit Media, in Chicago, IL., publishers of Automation World.

Publisher Dave Harvey has an experienced team, already well known in this business: Managing Editor Wes Iversen, Editorial Director Jane Gerold and Editor Gary Mintchell. They head up a knowledgeable and motivated group of top-notch editors and staff. The new magazine intends to cover the world of automation with a dynamic and innovative attitude.

In his inaugural Publishers message, Dave Harvey admits that he has been asked, "Who are these crazy people, launching a publication in today's business climate?" His response is confident, ambitious and spirited, "We are Automation World! We have built a great team that shares a vision to help energize and promote automation!" Dave Harvey believes that an economic recovery will come soon, and he insists that Automation World plans on being in the right place at the right time when the recovery occurs.

The Automation World website reflects that dynamism and innovation. The first in this business, you can view an exact digital replica of the magazine in an eBook format, flipping pages to read articles and review advertising. SNAP - Searchable Network of Automation Pages - provides new ways for suppliers and end-users to communicate. Coming soon, you'll be able to search the Web sites of more than 150 automation vendors and trade groups directly from the Automation World website.

We congratulate Dave Harvey and his team on their launch of a budding leader in this business! Automation World for the new century!

Click See the spectacular Automation World website

Click Subscribe to Automation World

Click Jim Pinto article, written for the inaugural issue -
Automate, emigrate or evaporate:

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Ron Bengtson [ron2010@pacbell.net] writes further about the problems being caused by jobs going offshore, and his own previous comments on the subject (eNews June 10, 2003):
    "I felt Dick Morley stated his opinion very well. He is a realist, and my comments were those of a concerned idealist.

    "Before a problem can be solved, it must first be recognized as a problem, and the nature of the problem must be clearly understood. Dick Morley brilliantly described the problem. Now, we can solve the problem, because (one of my favorite sayings) the solution is within the problem.

    "The problem is not one that can be solved by a top-down re-organization, nor is it a lack of technical options. It's a political problem. And, that includes the unions - organized labor's resistance.

    "I would summarize the problem as "The absence of wisdom" within the political body. Where is the leadership that has a vision of the future, beyond the next election? Unless people can see a better way and begin to make "noise" within the political body, the leadership will continue within their comfort zone. The solution is to get a large number of people expressing a desire for change, with a clear idea of what that change should look like, and then let the leadership know that their future election will be determined by how they describe the future. Are they describing a future that includes new American automated factories, or are they saying nothing, thus continuing to allow America’s industrial power to be transferred to China?"

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Dan Daugherty [DD@onr.com] from Pittsburgh, PA. thinks that innovative micro solutions are the key to progress:
    "I like your continuation of provocative thoughts and ideas. There's no need to nail down an exact view of the future. It's enough to show the possibilities, while at the same time expose flaws in current styles of thinking.

    "This issue has set off a whole scintillating series of ideas in my own mind. It occurs to me that maybe none of use can find the solution to the really big problems. But if any of us did, it would be next to impossible to persuade enough other people to join in the solution. But what IS within our grasp is to come up with innovative "micro-solutions" and effectively implement them without permission to let them compete against all the other micro solutions. The winners that emerge become something real, not just good ideas that never got off the ground."

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Roy Slavin [royslavin@cox.net], formerly President of Siemens Industrial Automation USA, and Wonderware, is frustrated by the whining in the company weblogs:

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