One year later, that hyperevolution had reached the point where 63% of all Honeywell engineers are software engineers, far overshadowing its legacy engineering-skills base from the fields of mechanical, electrical and chemical engineers. So actually we do have an interesting question. So the result is theyve got hundreds of silosnot just data silos but operating silos and process silos and equipment silosplus hundreds of data models that are all completely fragmented., (To gain more insight into the Honeywell Forge strategy and capabilities, please check out our full video interview with Trice in this episode of the Cloud Wars Live podcast.). He believes the software business has achieved critical mass and can grow without management bolstering it via deals. jQuery(".mo_btn-mo").attr("disabled", false); And of course this is all in the back of Honeywell being a leader in the industrial space as Andrew highlighted in his opening. Yes, it's a great question and a super important topic. else{ And a few examples here I mean, I mentioned energy optimization, predictive maintenance is a great one. Honeywell International jQuery('#mo_openid_consent_checkbox').val(1); But we've made a lot of progress and it's one of the core focal points for us. No, no, but just talking about Sparta I don't know how much my question you've got, but it's focused on life sciences, $1.3 billion acquisition closed in February. Maybe for it the audience a bit of background on Sparta, I mean Sparta is an industry leader on quality management systems and software focused on kind of bio-pharmaceutical and the market device industry. And as a result, that road led me to moving up to the mother-ship if you will, and moving up to Seattle and helping transform the Office franchise. jQuery(".mo_btn-mo").attr("disabled", true); None of Honeywells businesses believe that China trade tensions are likely to lead to incrementally increased [direct] sales pressures.. And so for us leveraging the expertise that's already there can actually be cheaper at the end of the day. And then maybe you can chat or talk about the impact of Forge on SaaS for Honeywell and just generally, how do you go about monetizing that value? For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. And so, a good example of that on our side is one of our products called flight efficiency which connects into the broader computer system to be simple about it of the airplane allowing to real time analytics, leading to things like efficiency and fuel consumption and reading of the control systems within the plane to drive that cost efficiency I mentioned earlier. But also helping them think through what the - and work through what the ecosystem that's supporting their move to digital structure within their operational technology, what that move is going to look like. And so, we're really focused on helping stitch together that fractured nature of where the offerings are. So Forge software offerings off hardware agnostic, but if you looked at Forge win rates versus the Honeywell's equipment share, is there a positive relationship or maybe the broader question is how significant a benefit is Honeywell's installed base in growing software? Near term, Honeywell remains still somewhat cautious toward the global macro short-cycle economy, particularly in the wake of the recent step-up in trade friction with China, Gordon Haskett analyst John Inch said in a recent research report. The average gross margin for software companies in the And so, as I mentioned in the initial problem set statements - being able to do that in an efficient manner that allows workers to use real time data to make decisions, to handle predictive maintenance issues, things like that. It's encouraging to see Honeywell Connected Enterprise embracing this vision and supporting automated action through the Honeywell Forge portfolio of SaaS applications.". As far as the broader players, the bigger tech players, I don't know that I would expect to see, you know, a AWS or a Microsoft or anybody get down to the level of that last mile that we are seeing the ecosystem grafter. My view personally is just it's not going to be dissimilar from Microsoft, Cisco Dynamic 20 years ago, where at the end of the day is just not worth the time to go and get involved the nitty-gritty. It's really just about the complexity of it as you highlighted. And that, and SAP is a good example of that. var redirect_url = http + http_host + request_uri; var expires = "expires="+d.toUTCString(); While at Oracle, Trice was involved in the buildout of Oracles cloud CRM and CX strategy, which Honeywell said was a big factor in its decision to bring him aboard to lead the Honeywell cloud initiative. Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. And now what we're looking to do is really expand that - the Sine acquisition is a great example of that where we move beyond kind of - that's call the infrastructure of the building and move now to what the people moving around the building. And then obviously the last one, which I spent some time talking about really is life sciences. "Honeywell continues to build and enhance connected solutions so our customers can succeed with their digital transformation, efficiency and sustainability goals," said David Trice, chief product officer and general manager, Honeywell Connected Enterprise. Andrew? location.reload(true); If you talk to anyone who is looking at migrating to the cloud or utilizing cloud, everything is - hinges around ability to rationalize around data. In that regard you'll see the bigger players continue to invest like us. What's the same and what's different. We've detected you are on Internet Explorer. And to weave together the formerly disparate worlds of OT and IT, Honeywell Forgeharkening back with its name to the heavy-industry roots of its parentis deploying its suite of Enterprise Performance Management software solutions. And so, I would say we're not where we were eight years ago. } On the monetization end, obviously within the industrial space, it varies quite a bit on vertical to vertical on what the use case is and how that looks to end users in some cases can be by users. jQuery(".mo_btn-mo").prop("disabled",false); And we're super excited, like I said earlier about the momentum you heard us talk about in each one kind of 30% bookings increase year-over-year, back up over a $100 million now. And what I would say is that, if HBT was a lead horse, I would put industrials behind them. Thanks Andrew. And so with Forge really help - our customers stitch that together and giving them an ability to act on it. An error has occurred, please try again later. So there's a few from my standpoint, there's a few big challenges that I see. See How Our Analysts Covered the Acceleration Economy at Cloud Wars Expo. I mean really the focus was to help, you know, the Honeywell customer base and industrial space at large digitally transform as Andrew highlighted, and it's at the heart and the center of the mindset of most of the customer these days. We do seem to have lost Andrew. Apologies. That's obviously not to say that we don't work with partners outside and as I mentioned, that's a key part of our strategy as well. Sparta you guys closed a $1.3 billion acquisition in February. And that uniqueness across the building portfolio creates a whole lot of complexity. And so we think we're well positioned to provide a good value prop or a strong value prop with the customer base. Yes, sure thanks. And so connecting that last mile becomes super, super important for us with our customer base. I will try. Yes, great question, Andrew and maybe to start for context for the audience just a brief background on myself. What the savings could possibly be and what it will take to actually - to transform their environment. And so I would say momentum is really moving on the business right now. And that could be standardizing equipment that could be putting camera sensors in place to look at predictive maintenance on a factory line that could be highly monitor security and how looking at entry points and as highlighted by the type of your conference on internet of things that the massive amount of endpoints that are being created every day only makes this challenge more complex. So, I'll just pause for a second. redirect_url = redirect_url +'?option=getmosociallogin&wp_nonce=' + default_nonce + '&app_name='; (REZI), a maker of security systems, and And I would say that's the biggest, one of the other biggest differences I do see is that within our customer base, helping our customers move towards a scalable, repeatable software structure within their operational space which presents just a very intriguing opportunity. Yes sure. I know this was a big debate, maybe five, 10 years ago but? It was just - I thought it was a good question? jQuery('#mo_openid_consent_checkbox').val(0); The chief product officer for Honeywell Forge, former Oracle executive David Trice, is leading this mother of all digital-transformation initiatives. And so as we move forward, I think the expectations investors should have is that, you'll continue to hear from us about progress that we're making, about you know, where we think we can take a business and about, you know, how we help Honeywell more broadly from a software standpoint, not only within Connected Enterprise, but how we help our business groups as well using the power of software. For the best Barrons.com experience, please update to a modern browser. Yes. And as I mentioned in the previous, we've seen good momentum on that so recurring revenue growth has been very strong for Connected Enterprise. But the goal, hopefully at the end of the day is to expand it much like most of our partnerships, because the problem set if you will, when you think about data disparate systems, et cetera is repeatable across the verticals. If you are having this conversation, seven or eight years ago, we'd be having a very different dialogue, but over time the customers have started to upgrade their ecosystem. Please. We're not really helping the customer at the end of the day. No thank you. You can blame, Verizon for that. And so - if you saw on that, one of the first slide I showed today you saw that we have a pretty large contingency of AI focused engineers. Yes, it's a great question and the short answer is its massive. This class of offerings, which includes Honeywell Forge Connected Warehouse, will help organizations simplify operations and lower costs by providing increased visibility to data as well as real-time insights, monitoring and automation. We've been super pleased with the Sparta acquisition. But I'll look back to Andrew now and we can get going on Q&A. You know, at the core of it, the industrial space is very complex across many different verticals and many different problem sets. And as I mentioned earlier and have spent some time on data is obviously at the center of any use case scenario and we're not unique to that, right. So I'll just call out where we're at. Dow Jones Industrial Average. } (GTX), which produces turbochargers. intended to work together, let alone intelligently and harmoniously, Trice said. var request_uri = '/cloud/forging-an-industrial-software-revolution-in-the-cloud-at-114-years-old/'; We had an acquisition earlier this year that most of you were aware of Sine which is at the center of our occupant experience and think about the return to work environment that we're currently in. You know, Honeywell Connected Enterprise really has grown over the last three years. Thats good news for Honeywell investors. And as I said, it's - just want to make sure I welcome Alex who has been a great partner and it's great to have a partner like that. They work very hard to get there. With Honeywell Forge Enterprise Performance Management, were trying to suggest that the way of running your operation tomorrow will be fundamentally different, Trice said. It's obviously not only applicable to the biopharmaceutical space or medical device space. ", Enhancements to Existing Honeywell Software Solutions. Thank you. It makes chemical products, aircraft parts, and refrigerant for air-conditioning, as well as a host of other things. Industrial gross margins are about 26%. And you've heard a lot about that in previous dialogue. Is that a fair statement? This is Andrew Obin, I am Bank of America's multi-industrial and now industrial software analyst. var default_nonce = '2b62cf2162'; This field is for validation purposes and should be left unchanged. And so one of the things from a go-to-market standpoint that we've been hyper focused on is really being customer centric in our approach. We are very focused on software within Honeywell, and so really utilizing the leverage that we have from a Forge standpoint and then making that extensible to our customer base. And I don't think any of them are going to be rocket science per se, but they're very hard problems. else That led to kind of that fractured nature of the market that I've talked about and customers are now realizing because a lot of times they've already started on that journey that by standardizing, by stitching together data by really focusing on how to standardize on software it can lead to quite a bit of savings. It's actually very, I think a very important point, because I think as most of your aware the ecosystem of vendors that approach this problem with our customer base is very wide.
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