As Customers Suffer from Closed IIoT Ecosystems, Danfoss and Honeywell Tie up Aiming to Solve the Problem of Interoperability

Danfoss Drives, a leader in motor control solutions, and Honeywell Process Solutions, known for its expertise in automation and control systems, have signed a non-binding Memorandum of Understanding (MoU) to explore potential collaboration. As noted in the press release, this partnership aims to develop automation solutions with an integrated architecture to enhance data integration and flexibility, while reducing downtime and engineering costs. While the press release is short on detail, the announcement appears to be a standard partnership between a hardware vendor with IIoT ambitions and a platform vendor (Honeywell Connected OEM) with the intention of making it easier for operators (end users) to get the most functionality out of the hardware by creating a tight integration between hardware and platform, without sacrificing flexibility for operators to integrate the data into other systems without large Information Technology (IT) projects. Their efforts are expected to benefit various industries, including battery manufacturing, specialty chemicals, and mining.

Danfoss Drives has been integrating more digital tools into its drives, enhancing predictive maintenance capabilities and overall system efficiency. Honeywell, through its Process Solutions division, has been at the forefront of developing connected platforms for industrial automation. Its Connected OEM platform has been pivotal in offering seamless data integration and real-time analytics, helping manufacturers optimize operations. The Danfoss-Honeywell partnership aims to leverage the unique strengths of both companies to address critical challenges in automation. Customers looking to adopt IIoT face challenges currently with existing systems, particularly around data integration and system flexibility. Traditional automation systems in manufacturing are built on proprietary closed technology stacks; this comes with some advantages, such as ease of deployment, but also leads to vendor lock-in and a requirement for custom integrations and workarounds, which results in inefficiencies and higher operational costs for the customer. Industrial Original Equipment Manufacturers (OEMs) must be, and increasingly are, central participants to opening up these proprietary systems.

Applications for this collaboration are wide-ranging. In battery manufacturing, the need for precise control and data integration is paramount for optimizing production and ensuring quality. In specialty chemicals and mining, the ability to integrate data from various sources can lead to more efficient processes and better resource management. This partnership also positions both companies to better compete with other big vendors like ABB, which offer specialized solutions in connected OEM and digital transformation spaces.

Interoperability is an important trend for IIoT. In a recent survey by ABI Research of the manufacturing space, 69% of manufacturing end users noted that interoperable solutions that are easily integrated into the existing Information Technology (IT) landscape were important, very important, or essential, citing it as one of the top technical features they assess when evaluating a new vendor or solution. Manufacturing team leaders (50%), production engineers (45.9%), and IT managers (42.7%) were the top three personas noting that interoperability was “essential” or “very important.”

Danfoss and Honeywell are not the only vendors looking to solve the interoperability challenge. In April 2024, the Linux Foundation (responsible for a large part of embedded industrial operating systems) launched Project Margo, bringing together leading industrial OEMs and software vendors like ABB, Siemens, Rockwell Automation, and Schneider Electric with the goal of setting a new standard for interoperability between industrial hardware and software. ZEDEDA, focused on edge to cloud orchestration, joined the project at the end of May; as a vendor already focused on interoperability, it hopes to influence and facilitate the implementation of any new standard that emerges from the project. Broadly speaking, the idea behind this project is that creating a standard to remove the barriers of proprietary software stacks is more efficient at transforming the industry as a whole than individual partnerships between OEMs and platforms, and leads to more focus on where value is created for customers—namely in the applications, rather than in IT integrations. Where Project Margo focuses on breadth of interoperability, individual OEM/platform partnerships facilitate depth of integration—making both approaches valuable.

OEMs have numerous digital transformation initiatives aimed at enhancing their products and services. While their products, such as drives, are often software-enabled for easier configuration, OEMs are now looking to advance toward offering services centered around predictive maintenance and energy management. This progression requires developing solutions that seamlessly integrate into existing customer operations. Predictive maintenance, which anticipates equipment failures before they occur, can significantly reduce downtime and maintenance costs. Similarly, energy management solutions optimize energy use, leading to cost savings and improved sustainability. By focusing on these advanced services, OEMs can provide greater value to their customers, fostering long-term relationships and ensuring their products are part of a comprehensive, efficient system. The Danfoss and Honeywell partnership exemplifies this trend by aiming to set a new standard for integrated architecture in automation solutions.

Interoperability is a critical focus for OEMs and technology suppliers, as it greatly simplifies operations for their customers. To achieve this, companies often work toward setting industry standards, such as those established by the Margo Project. These standards ensure that different systems and products can work together seamlessly, regardless of the manufacturer. Additionally, tight integration through bilateral partnerships allows for customized, cohesive solutions tailored to specific customer needs. Both approaches—industry-wide standardization and strategic partnerships—are crucial. They ensure that the end users experience less complexity and more cohesive operations, leading to enhanced efficiency and reduced operational costs. For instance, the Siemens and Simsol collaboration and Siemens' Xcelerator arm show how effective partnerships and open platforms can address production challenges. OEMs and technology suppliers must prioritize interoperability to stay competitive and meet the evolving demands of the market.