ABB growth plans
ABB expects sustained revenue growth and increased profitability under its mid-term strategy for 2007 to 2011. Demand for new and upgraded power infrastructure and further industrial investments in improved productivity and energy efficiencies are expected to continue in all regions.
The company plans to maintain its current core portfolio of businesses and aims to build on its leading technology and strong market positions in the fast-growing emerging economies to increase revenues organically at almost twice the rate of market growth and three times the rate of global GDP growth.
ABB anticipates profitability to increase by as much as 5% during the 5-year period, compared to 2006. As a result, earnings are expected to grow by a compound average of 15-20% per year, and after-tax return on capital will exceed 30% by 2011.
This strong position continues to fuel the news that ABB will soon make a move to acquire Rockwell. Meanwhile, Rockwell hired ex-Ford manufacturing people to run some of its US manufacturing plants, causing lots of layoffs and plant-closings. Distracted by these screw-ups, Rockwell is reported to be girding for a fight.
Stay tuned...
Cisco and the wireless wars
Most companies in the automation industry recognise wireless as a new 'inflection point' which will generate significant growth and market share for leaders. The wireless wars are marketing ploys to gain market-share through the differentiation of standards that support the majors' market strategies.
It is little more than three months since Honeywell announced its 'OneWireless' solution at the Honeywell User Group meeting. Honeywell president Jack Bolick claimed that "OneWireless was the only wireless network a plant needs." The implication was that users who adopted other vendors' solutions would find themselves having to manage a plethora of protocols and several potentially conflicting wireless networks. Emerson, which was already selling its HART-based wireless networking, was the primary target against which this marketing volley was aimed. Honeywell suggested that by focusing solely on field device networking, Emerson was not giving its customers the opportunity to take advantage of the wider possibilities offered by Honeywell's much broader OneWireless in-plant wireless networking solutions.
Now Emerson has responded by announcing an alliance with Cisco, which offers users pretty much everything that Honeywell's OneWireless offers AFTER the ISA-100 standard is released, plus the added bonus of WirlessHART-based wireless networking NOW.
Cisco, the mainstream networking 'big gorilla', is once again (previous alliance with GE-Fanuc fizzled) eyeing the industrial automation arena. Cisco sees the growing convergence of the IT and automation worlds, and hopes to extend its reach from the corporate level to the plant, not quite recognising the intricacies in the fragmented industrial markets.
In April 2007 Cisco announced an 'alliance' with Rockwell, with plans to develop what they called a 'common technology view'. No one really understands the sweet-nothing words that were used to introduce that alliance, beyond the fact that Cisco wanted to play in the industrial arena.
This is clearly a marketing game of ping-pong, with Cisco playing all sides. Honeywell must soon come up with a response to the latest Emerson initiative. Or, take my advice: Forget it, and simply focus on gaining market-share - which is the real prize.
Collaborate or die
With continued, accelerating change, companies can achieve significantly more through collaboration. This means the sharing of business information, joint planning and projections with suppliers and customers - and perhaps even suppliers' suppliers and customers' customers.
Collaboration brings major benefits for all the companies involved. The Harvard Business Review reports that a 5% increase in customer retention can result in a 25% to 95% increase in profits from collaborative relationships.
An effective enterprise collaboration solution must provide the technical systems links for people to work together in distributed, intra- and inter-company teams. Effective communications must be enabled across distance, time zones, and company borders, encouraging team members to discuss, analyse and review collaboratively.
This is a key enabler, allowing companies to react more quickly to changes in supply and demand. Expand your horizons, by expanding the borders of your company through collaboration.
The question is: who can your company collaborate with? The answer is relatively simple: your best suppliers, and your best customers.
In the next few years your enterprise will be collaborative, or it will not exist at all.
Jim Pinto is an industry analyst and commentator, writer, technology futurist and angel investor. His popular e-mail newsletter, JimPinto.com eNews, is widely read (with direct circulation of about 7000 and web-readership of two to three times that number). His areas of interest are technology futures, marketing and business strategies for a fastchanging environment, and industrial automation with a slant towards technology trends.
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