Wonderware eyes 60 p.c. growth in India this year

Having sold approximately 3,25,000 software licenses of its of industrial
automation and information software worldwide, Wonderware is now eyeing the
Indian market for growth

The company is targeting 60 per cent growth this year in India through its
distributor KLG Systel.



In an interview with Pragati Simlote of CyberMedia News, Invensys Systems, Inc.
Wonderware ArchestrA business units president Mike Bradley, Sr. and KLG Systel
CEO Mukesh Arora outline the company's growth plans in Asia and India.




Could you give an overview of Wonderware's operations?

Wonderware, the software arm of Invensys, is a supplier of industrial
automation and information software. The company introduced InTouch software,
the first human-machine interface (HMI) based on the Microsoft Windows operating
system in 1989.

Our product line includes the IndustrialSQL Server real-time plant historian,
SuiteVoyager industrial portal software, ActiveFactory reporting and analysis
clients, DT Analyst asset monitoring and OEE software, InTrack resource tracking
software and InBatch production management software. Wonderware has
approximately 3,25,000 software licenses in approximately 1,00,000 plants
worldwide, which is about 30 per cent of the world's 3,35,000 plants with 20 or
more employees.

Our major competitors both in hardware and software include Siemens,
Rockwell, GE Fanuc, Schneider Electricals, etc.




How does your solutions help companies better manage their plants?

Lots of data is generated with the running of machines and processes and this
data becomes more important overtime. We have started to steadily creep up in
terms of building on top of this data coming directly from the machines.

The problem that could not be solved before was providing real time
connectivity to real time systems and closing the loop on the real time supply
chain. In the last one-and-a-half to two years, what has happened is that this
information has now been put into a real time framework that collects all this
data in context. Enterprise resource planning (ERP) doesn't have real time
visibility. By having real time information now available in this framework —
the technology is called ArchestrA — this information is now made available to
ERP systems.

Now standards are also in place for hooking the ERP system to the real time
framework. That is changing very rapidly the way global manufacturers are
thinking about how to run manufacturing. Especially when there is a demand pull
strategy in industries such as automotive, fast moving consumer durables (FMCG),
etc.




What are the benefits that accrue to the manufacturing company?

The real time connectivity of the plant floor to the ERP is important because
of the huge investment needed in implementing ERP solutions. Some of the
estimates of consumer companies report additional cash flow of $300 million
-$400 million per year as they have low inventory and become agile.

Now, people are getting into real time data mining because they are finding
that there are lots of hidden profits in this. Benefits that large companies are
getting out of these initiatives include enhanced productivity, improved
quality, better customer response, agility in manufacturing, etc.

We have built ArchestrA technology into all our products. Companies can take
our Intouch HMI , the sofware has the capability to upgraded where it can run a
a full blown production system. So the solution can also scale up with the
growth of the company.

HMI is the first layer through with the operators interface talk with the
machine — graphic interface. Intouch is the first product that goes into the
real time layer of large organizations. It is the interface to the plant and
machinery. So it captures data, present data, tells the trends in the data and
this information goes to our other products, which store this information and do
data mining, reporting, etc.



Microsoft and SAP had recently announced a joint product called Duet that
enables people to interact quickly and easily with SAP business processes and
data through Microsoft Office applications. There will eventually be Office
connectivity to our system also.




What is your channel model?

We mostly deal through third party distributors. We have very strong powerful
software distributors like KLG who are very knowledgeable about the local market
and have a large footprint. They also have people who are dedicated to selling
and supporting our software and are technically knowledgeable about the product
but they don't implement it. The implementation is done by our third party
system integrators (SIs), which are either engaged by distributors or the
customer.

We have around 60 distributors and 140 offices around the world. We also have
a network of 3,500 system integrators.

With the emerging concept of global supply chain, irrespective of where the
plant is the company's are standardizing so much that the product can be
shipped anywhere in the world as long as it makes business sense. When they
decide to standardize on a product or technology or framework they do it
consistently all across the world and that is where the distributors and SIs
play a more important role.

What are the company's expectations from the Indian market?

In Asia, we have office in Singapore, Japan, Korea and China. In the last
couple of years we have spent a lot of time and effort in developing the China
market. Going forward, India is on our radar screen for the next couple of
years. We are targeting 60 per cent growth this year in India.

We have a program for BRIC (Brazil, Russia Indian and China). These are the
most rapidly growing countries in the world and we are making significant
investments in growing our sales personnel, application support, facilities,
etc. in these geographies.

In India, we have a Star plus distributor program and the gold level is the
most advanced level in that program. We have been discussing with KLG about
becoming a gold star + distributor. It requires investment and focuses on growth
and also builds a strong two way long term partnership with the distributors.

Invensys has development centers in Hyderabad and Mumbai and have over 220
software developers in those two locations. We have approximately 70 people
working on just Wonderware software. We are also at the highest level of
partnership with Microsoft, who is making a big investment in India.




How do you plan to grow your India footprint?

As part of our growth plan, we are trying to scale up non-enterprise roll out
of solutions to become enterprise. So companies who have bought these solutions
from us and are running them as islands in various plants, we want to go back
and give them a enterprise solution. This is because many of these customers are
using many of our products only for real time data capture or for running the
plant and not running it to enable business decision-making.

Our second focus would be going to additional geographies to address the
requirements of manufacturing zones / industrial belts coming up across the
country. We also want to leverage our relationship with Microsoft and SAP in
India so that when they are addressing larger requirements in these industry
verticals then some of our solutions can become part of the large
implementations.

Close to about 30 people in KLG are working on Wonderware. When we go to some
smaller markets where manufacturing base is emerging, we would augment the
employee base.




What is your pricing model?

Our pricing model consists of perpetual licensing. Support can be purchased
separately. We are also looking at additional models as world changes. In the
real time applications, there is also a concept of input-output (I/O). The
pricing and licenses are also based on how many I/Os companies have for an
application.

There are many slabs. If you have basic application monitoring few parameters
in your real time process, you may go in for entry-level I/O count. If you have
very complex application, hundreds of parameters being monitored in real time,
then I/O count will increase. Our pricing model is user and I/O based.




What kind of growth targets do you have?

The company has been experiencing double digit growth per year in the last
four years and we plan to accelerate this further. We invest a significant
amount in R&D and are beginning to deploy gold star program to leverage our
product portfolio.

The plant Production and Performance Management (PPM) market is around $two
billion growing at a rate of about 15 per cent, while the HMI market is around $
500 million with a rate of growth of five per cent — six per cent. In the PPM
market, Wonderware is growing twice as fast as the market and is growing 50 per
cent more than the market in the HMI market.

The APAC market contributes around 15 per cent -20 per cent of our total
revenue. In HMI, Asia market is growing twice as fast as the rest of the world.
Asia has lot of emerging markets and as these markets industrialize and
automate, they would be big markets for plant automation.

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