Invensys floats Microsoft link as cathartic

“We liked the idea of ‘ArchestrA inside’, but decided it was a bit corny,” says Leo Quinn, COO for the Production Management Division of Invensys. He’s referring to Invensys’ automation architecture now linked with Microsoft’s .Net and integrated server software as part of a serious strategic alliance that may eventually make or break the engineering conglomerate. Quinn has been on a whirlwind tour of the European automation and IT press, understandably lamenting that it is only in the UK that journalists want to talk about Invensys’ recent travails – the debt crisis, disposal programme and planned closure of the UK headquarters. Everybody else wants to talk about the technology and the positives. Let’s do that. The Microsoft partnership is designed to leverage Invensys’s knowhow in process applications with Microsoft’s platform, technology and enterprise products to sell overall process-centric business and manufacturing solutions, integrating all future products on Microsoft’s platform. It sounds a lot like the ‘shop floor to top floor’ message of years ago, revived with the acquisition of Baan, now sold to SSA Global, but with the clear difference of the infrastructure and platform wedded to Microsoft technologies. But more of that later. “The partnership is extremely strategic,” explains Quinn. “We’re seeing demand for ArchestrA starting to pick up in the marketplace,” he says, citing over 30 accounts globally that are either piloting the architecture or are using it for real. “Microsoft’s endorsement of ArchestrA is extremely important to us,” says Quinn, and was instrumental in convincing one end user, British Gypsum, going for Invensys’ Wonderware plant management systems. On the technical side the alliance is designed to serve several purposes. The cornerstone of the relationship is ArchestrA – a common foundation for industrial automation systems that integrates disparate systems in a plant. As the Archestra framework is rolled out in the future, the alliance will ensure that Invensys makes the most of Microsoft’s adaptive technologies and future architectures, and does it sooner rather than later. “There was no point in doing this in two-years’ time,” confides Quinn, “because the horse would have bolted”. Moreover, embedding ArchestrA into Invensys’s Foxboro A2 device controller and I/A Series PMS requires an operating system not commercially available. It’s here that Microsoft is providing “hands-on” help, working with Invensys software engineers to overcome technical barriers, and accelerating Invensys’, productivity tools and future solutions to market. But it is also about resource. “We always believed ArchestrA is infinitely scalable,” says Quinn. “But the only way we could test it is on a big plant. No customer is going to allow you to do that.” Utilising Microsoft laboratories Archestra was tested up to 200,000 I/O. The result? “It scaled beautifully so now we’re testing it up to a million I/O – equivalent to a complete automotive plant.” But what’s in it for Microsoft? Quinn’s claim that Invensys’ endorsement of .Net is important might be overblown, but Microsoft was undoubtedly after its “deep vertical domain knowledge at the plant floor level” – or access to the hydrocarbon processing, pharmaceuticals and food and beverage markets. It is this that sets Invensys apart from the crowd. Microsoft wants to connect process plant floor systems with the boardroom, becoming a solutions provider. “We’ve set up a joint Hydrocarbon Centre of Excellence,” says Quinn, to “solve problems using our domain knowledge with Microsoft’s.” Oil and gas is the big target and Quinn sees much growth opportunity with the development of e-fields and smart fields, integrating production platforms with office environments. However, the aim is to produce solutions with a broad, horizontal appeal across various industries. The advantage for the user is a common user experience whether looking at office or plant floor systems. Is this as significant as Invensys says? Certainly, the news has had little effect on the company’s share price. And clearly, Microsoft, as a major platform provider, has relationships with all Invensys’ competition too. The key difference is that “we have co-operative marketing and sales,” says Janie West, director new business development and instrumental in securing the deal. “Working side by side with the customer is a first for Microsoft,” and West differentiates between being an adopter of Microsoft technology, following standard programmes, and being a strategic partner. While Microsoft does have strategic relationships with “two other competitors”, West believes that Invensys is “the last company that Microsoft said it would target for a while”. Over the next three years Microsoft and Invensys will jointly identify key 150 accounts for further development. One key stumbling block for Microsoft could be Archestra’s association with a single automation vendor, and Quinn does not hide his hopes that a big player, such as Emerson or Honeywell, will adopt it. He clearly believes that ArchestrA could be a de facto standard, but the odds of a direct competitor taking it on are pretty slim. Details of the alliance were put together in six months, “so professionally done”, says Quinn, that “Microsoft want to take the model and use it as their standard”. Exclusivity was an issue from the outset but West believes the agreement has protected Invensys’ interests. Besides, “a totally exclusive relationship was not desirable. Microsoft has a highly leveraged business model and we use other technologies outside Microsoft to have connectivity to other systems.” There are all sorts of measurable milestones and accomplishments built in to the agreement and there has been “considerable investment on both sides of the fence”, although no one is prepared to say how much – except that it is in the “multi-million dollar” region. Back to Baan To some the resultant shop-floor-to-boardroom pyramid that Invensys, with Microsoft on board, is offering, might look an awful lot like Invensys with Baan still attached. Not so says West, stating that Baan customers “were a totally different set from the rest of Invensys business,” being primarily focussed on discrete manufacturing while Invensys is process centric. West argues that automation needs are “very different between discrete and process”, for example the typical amounts of I/O required. Invensys cherry-picked some enterprise connectivity expertise from Baan, “but the fact that Baan is no longer with us is a plus,” West insists. “We would have had a tough time signing on Microsoft Business Solutions had we still owned Baan.” The coincidence of Baan’s sale and the beginning of the negotiation with Microsoft is inescapable. “Parts of the strategy were being put together whilst Invensys still owned Baan,” concedes West. “Microsoft might have seen us as a threat rather than an ally”, adds Quinn. “But if selling Baan was the price of this relationship then that is a good decision.” And it still allows Invensys certain commercial freedoms. Proud to be British? Most of the collaborative work will take place in the US and Invensys will consolidate there, says Quinn. Some 40% of Production Management revenue is from Europe, with 40% of US origin. “Business is global; where you put your head office is largely irrelevant,” Quinn says firmly. “My concern is how do I stay competitive.” The London HQ was set up to run a $12 billion company, which is now being downsized to $2.5 billion. “We don’t need it. I want a minimalist infrastructure and maximised global customer base.” And who will be in charge? Current boss Rick Haythornthwaite has declared that he does not want to go to the US but “will steward the company until it has found its feet.” Quinn is currently based in the US, from where he will continue to run Production Management…for now, whilst the rationalisation process continues over the next six to 12 months. For ArchestrA, one possible scenario is that, with the setting up of a separate business unit, eventually a separate ArchestrA company is formed, dependent of course on any future break-up of Production Management.