PTC, Rockwell, and Microsoft Create Factory Insights as a Service Joint Offering

PTC is extending its alliance with Rockwell Automation and Microsoft to offer Factory Insights as a Service, a cloud-based solution sold on a modular, use case basis.

Factory Insights as a Service combines many of the key product components of PTC (ThingWorx, Kepware, and Vuforia) and Rockwell Automation’s FactoryTalk InnovationSuite with Microsoft’s Azure Internet of Things (IoT) Hub and Azure IoT Edge so manufacturers can standardize and scale applications across sites. The focus at launch (3Q 2020) will be operational performance, asset utilization, and workforce efficiency management.

In June 2018, PTC and Rockwell signed a US$1 billion equity agreement to align their respective smart factory technologies. The immediate result was the creation of Rockwell Automation FactoryTalk InnovationSuite, an integrated offering that combines PTC’s ThingWorx, Kepware, and Vuforia with Rockwell’s FactoryTalk Manufacturing Execution System (MES) and FactoryTalk Analytics platforms. Since then, Rockwell has been working to identify the parts of its core business to pivot to cloud on a short-, medium-, and long-term horizon, and PTC signed a strategic co-sell agreement with Microsoft whereby Microsoft is PTC’s preferred cloud partner. This brings us to Factory Insights as a Service.

Factory Insights as a Service essentially leverages the capabilities of FactoryTalk InnovationSuite and packages them into a focused set of use cases:

1. Real-time production performance monitoring
2. Asset monitoring and utilization
3. Connected work cell
4. Digital and augmented work instructions

The overall impact is that, rather than buy systems or software with features that aren’t fully utilized, manufacturers will be able to access—and pay for—only the applications and capabilities they need. The use of cloud not only makes this possible, but de-risks the investment and reduces deployment cost. For Rockwell, PTC, and Microsoft, this is the “land” part of the “land and expand” strategy, and cloud improves the ability to standardize and scale.

In our recent ABI Insight The Impact of COVID-19 on Manufacturing Technology Adoption (IN-5813), ABI Research highlighted how software-centric industrial companies that have already transitioned to a Software-as-a-Service (SaaS) model are well-positioned for the inevitable and broader shift to value-based solution selling, and how those that have not or do have an as-a-service or recurring revenue component in their roadmap must seriously consider if, how, and to what extent they can adapt, or risk being left behind. Well, this is the start of that happening, and Factory Insights as a Service underscores the broader move to deliver modular, value-based solutions. This is counter to the traditional model of End-to-End (E2E) systems selling and reflects the heterogeneity of customer needs in today’s manufacturing economy. This is a shift and a trend that is here to stay.

For a long time, Rockwell’s main Industrial IoT (IIoT) businesses have been oriented around condition monitoring solutions, which include sensors, integrated hardware, and predictive maintenance software, along with energy monitoring products, which are hardware components with associated software that manage power use to improve equipment Total Cost of Ownership (TCO). The company’s work heritage in capital-intensive physical-first environments serves it well working in closer partnership with PTC and now Microsoft. Where things get interesting is when we consider the natural evolution of the IIoT market from monitoring to control-style applications. Already Rockwell, PTC, and Microsoft check off a lot of the boxes when it comes to remote monitoring—and now cloud management and delivery, too. The significance of control-style applications is that there is an even greater likelihood that Operational Technology (OT) will need to be involved in the application creation process, and therefore an even greater need for low code/no code capabilities. For PTC, these partnerships are critical; about 50% of PTC’s software is sold by or with partners. For Microsoft, they are an important extension of channel and further establish the role of the hyperscaler in the Industry 4.0 machine.