Rockwell Automation makes $1bn IIoT investment in PTC | Analysis

Rockwell Automation makes $1bn IIoT investment in PTC | Analysis

As industrial automation company Rockwell Automation forms strategic partnership with software company PTC, Jessica Twentyman takes a first look at this important industrial IoT (IIoT) deal.

In an Industry 4.0 world, a factory is only as smart as the software that runs it. That’s the key takeaway from the news this week that factory automation specialist Rockwell Automation is to make a $1 billion equity investment in software provider PTC.

The new strategic partnership will see the companies push a joint vision of the software-driven smart factory, targeting clients that are interested in supercharging the physical nuts and bolts of their industrial environments with a hefty dose of digital.

Where OT meets IT

It’s certainly an interesting deal. PTC is perhaps best known among manufacturers for its computer-aided design (CAD) tools, such as Creo, and its product lifecycle management (PLM) software, Windchill. Not much there, you would think, to interest a company such as Rockwell.

But in recent years, PTC has increasingly focused on the industrial IoT (IIoT) space, and made a number of its own acquisitions. These include the 2013 purchase of ThingWorx (for IoT app development) and the 2015 acquisitions of Kepware (for machine-to-machine communications), Vuforia (for augmented reality), and ColdLight (for predictive analytics).

These capabilities, presumably, will be welcome once integrated with Rockwell Automation’s FactoryTalk suite of manufacturing execution systems and its related analytics tools.

Like many big industrial automation companies – including rivals such as Siemens and General Electric (see below) – Rockwell has been keen to accelerate the convergence of the operational technology (OT) used to run the plant floor, and the information technology that can help manufacturers get the most from their operational equipment.

For that reason, Rockwell has supplemented its sensors, controls, and other physical products with an increasing focus on digital. For example, in 2013, it invested $3 million in SmartCloud, a big data platform for the IIoT.

Once the deal goes through – probably in mid-August – Rockwell will become the third largest PTC shareholder, according to data from Thomson Reuters. Rockwell chairman and CEO Blake Moret will join PTC’s board of directors.

This isn’t the first time that PTC has fallen into the arms of an industrial automation giant and made a public commitment to it. Eighteen months ago, at General Electric’s Minds + Machines 2016 conference, GE and PTC announced plans to expand their strategic alliance based on the integration of PTC Thingworx with GE’s Predix platform for IIoT.

At the time, PTC CEO Jim Heppelmann said, “GE Digital is one of PTC’s most forward-thinking partners and has been working closely with us to push the boundaries of what’s possible with the convergence of the physical and digital worlds.”

What happens to that close partnership is now less clear. Yesterday, Heppelmann was naturally full of praise for Rockwell Automation, calling it “the leader in industrial automation and information”.

He said, “Leveraging Rockwell Automation’s industry-leading industrial control and software technology, strong brand and domain expertise with PTC’s award-winning technology enables industrial enterprises to capitalise on the promise of the industrial IoT.”

Internet of Business says

It all sounds remarkably familiar. But that’s not to say, of course, that PTC’s arrangements with GE and with Rockwell will necessarily prove to be mutually exclusive. More may become clear at next week’s Liveworx18 conference in Boston, Massachusetts, an annual event that brings together PTC executives, customers, and partners.

Internet of Business will be there to bring you any further developments.