Fisher-Rosemount out, solution selling in
Process automation vendor Fisher-Rosemount is now Emerson Process Management
Kevin Parker, Editorial Director -- Manufacturing Business Technology, 6/1/2001 12:00:00 AM MDT
Automation products that were new and exciting in the 1970s have become commodity-like, and large process automation vendors increasingly see their best growth opportunities in offering advanced services and total solutions—in addition to instrumentation, control system, and software products—to their global customers.
It's also the case that software application vendors like Invensys, Herndon, Va., and Aspen Technology, Cambridge, Mass., have spent the last several years assembling product portfolios that include everything from PC-based process control to supply chain management, and, hopefully, all points between.
These factors undoubtedly played a part in the recent decision taken by St. Louis-based technology conglomerate Emerson to rename Austin, Texas-based Fisher-Rosemount. The new name is Emerson Process Management, headquartered in St. Louis.
"This is a positive move on Emerson's part," says Dick Hill, vice president for automation at research analyst firm ARC Advisory Group, Dedham, Mass. "Basic automation products are a slow growth market. There is less justification for replacing the installed base of DCSs [distributed control systems] than there was to replace the earlier-generation technologies that preceded distributed control.
"What Emerson is doing, as are others, is combining products and services into solutions," continues Hill. "Many of its clients no longer have the in-house expertise they once did. They struggle with the newer technologies."
Emerson—still identified as Emerson Electric in this year's Fortune 500—had sales of $15.5 billion in fiscal year 2000. Fisher-Rosemount has been—and under its new name will still be—a leading provider of instrumentation, valve, and control system technology.
While the name change is part of a corporate branding initiative launched by Emerson late last year, other elements of the announcement suggest the profounder thinking that's taking place. This includes integration of the $400-million Emerson Performance Solutions business, which provides industry-specific consulting and management services, into Emerson Process Management.
Says John Berra, the Emerson executive vice president in charge of the process management business, "Simply carrying a broad line of leading products and technologies isn't enough today. In many cases, customers are looking to reduce the number of suppliers they do business with, choosing those that can help them grow their business continuously, efficiently—long-term."
Another change is that leading supervisory control software vendor Intellution, Foxborough, Mass.—also an Emerson company—has been added to Emerson Process Management. Intellution's new status will strike some readers as roughly analogous to the situation of its arch-rival, Irvine, Calif.-based Wonderware, which today is part of Invensys. "The difference," says Harry Merkin, a company vice president with Intellution, "is that we've been part of Emerson for six years now. Invensys is still trying to figure out where Wonderware fits."
Foxboro, a traditional competitor of Fisher-Rosemount, also is owned by Invensys.
"What's interesting about the name change is that it's counter to Emerson's traditional way of doing things, which was to buy companies and keep them somewhat separate," says Hill. "Now it's saying, 'We want you to come together and make this solution thing work.'"
In the brand names it markets, Emerson Process Management already embodies several cycles of consolidation that have previously swept process automation markets. Consolidation occurs as technologies, such as DCSs and programmable controllers, evolve from rapid growth markets to something that—while not quite a commodity—is sold based on competitive pricing and special features.
These product brands include Fisher, Micro Motion, Rosemount, Brooks, and Westinghouse. In recent years, the company also brought process optimization and asset management software brands—CSI and MDC Technology respectively—into the fold.
Lanny Carr, a vice president with Invensys Performance Solutions, says that even the services typically associated with automation products are today commodity-like. "The differentiator going forward," says Carr, is "knowledge-based services in areas like multi-variable predictive control or business intelligence. In these type engagements, the service provider organizes and analyzes product-related data, and then explicates its impact on the manufacturer and its customers. Information available to the producers is growing faster than their ability to understand it."
It's not the case that there have been no advances in process automation in the last 20 years. Incremental advances have taken place across the entire range of measurement and control. However, given the fact that many production facilities don't make full use of existing process control capabilities—as evidenced by basic PID control-loop tuning being turned off on many production lines—there is even less incentive to replace the installed base.
Perhaps performance solutions, business intelligence, and supply chain management—by optimizing operations and identifying just how much room there is for improvement—will be the means by which process manufacturers finally are driven to take full advantage of what the process automation industry has to offer.
Featured Company
Most Recent Resources
- FICO™ Xpress Optimization Suite Schedules Big Profits For Clients
- Strategic Pricing: Three Steps to Higher Profit Margins
- Driving Innovation Through Lean Product Development Practices
- Demand Planning Maturity Model Strategies for Demand-Driven...
- Simulation-Driven Product Development:Will Form Finally Follow...
