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Rockwell Continues Its Buy and Build Strategy |
NEWS |
Rockwell Automation announced the acquisitions of two privately held firms, ASEM and Kalypso, in February 2020, boosting Rockwell’s strategy of delivering “the Connected Enterprise.” Terms of the deals were not disclosed.
Italian-based ASEM manufactures monitors, Human Machine Interfaces (HMIs), Programmable Automation Controllers (PACs), and Internet of Things (IoT) gateway solutions, among other things, helping manufacturers collect and display data generated on the factory floor, while Kalypso is a U.S.-based consulting firm that looks to help companies in the life sciences, consumer goods, and industrial sectors improve their product design and development processes, production management, and service delivery models.
Other recent Rockwell acquisitions include Emulate3D (whose software simulate and emulate industrial automation systems) in January 2019 and system designs before incurring manufacturing and line of flight sensing firm Odos Imaging Ltd, in November 2017. Furthermore, the company announced a US$1 billion investment in industrial software provider PTC in June 2018.
Manufacturers are digitizing their operations and Rockwell is looking to manage as many parts of the digital thread as possible.
Both Firms Are a Good Fit |
IMPACT |
Kalypso fits with Rockwell’s desire for its Control Products & Solutions group to not just be involved in supplying single solutions but also provide clients with advisory services. Rockwell already teams up with Accenture’s Industry X.0 practice to develop digital offerings and encourage manufacturers to embed digital solutions on the factory floor. Kalypso’s consultants will be a critical part of this strategy by already having hands-on experience tackling problems faced by manufacturers.
ASEM is a good fit with the strategy of the Architecture & Software division, which provides solutions for automation and software platforms that control industrial processes. For example, ASEM’s technologies provide access systems, operational software, and secure Industrial IoT (IIoT) gateways that can enable clients to integrate smart devices with control platforms on a single network.
Their Impact Will Differ in the Short Term |
RECOMMENDATIONS |
Even before COVID-19 the pressure on manufacturers was intensifying, with expectations to introduce new products with shorter development cycles and no defects. Industrial technology firms can no longer rely on providing single solutions; they need to broaden their engagement in order to increase both revenues and margins.
Manufacturers are looking to system integrators and consultants to assist them with their digital transformation plans. Kalypso helps Rockwell move up the value chain, advising customers on how to approach innovations and product design and improve processes. The consultants can then pull through solutions from the rest of the firm in the project design and delivery stages.
ASEM has some important Intellectual Property (IP). However, with Italy in lockdown, it will be a while before it can be fully integrated. Rockwell will need to communicate how ASEM fits with the existing assets such as PTC’s portfolio (especially ThingWorx IoT and Kepware) and look to integrate ASEM with its FactoryTalk MES, FactoryTalk Analytics, and Industrial Automation platforms.
The impact of COVID-19 is dramatic in the short term, with factories ceasing production or retooling to support efforts to help healthcare providers. Manufacturers will look to suppliers to help them get their operations back up and running in the medium term and in the longer term reconsider their operational models. Suppliers that can blend advice and delivery will be particularly well-placed.
