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Industrial Tech SW market dynamics
The automation industry has undergone three transformations, creating distinct player categories such as software generalists, specialists, and industrialists. The business process software market is valued at over $60 billion and is characterized by significant acquisitions among incumbents to expand into new areas. Moving forward, there is uncertainty regarding whether new standalone companies will emerge within the Industry 4.0 sector.
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Industrial Tech SW market dynamics
- 1. Confidential WUNDERVC Industrial Tech Software -Market dynamics Christian Dahlen, October 2023
- 2. Confidential WUNDERVC 2 Agenda • The3 transformations of the automation industry and the new sets of players each transformation has created • The market size for business process software and the largest players • The acquisitions and the strategies of the incumbent players as the markets have grown and matured
- 3. Confidential WUNDERVC The automation industryhas completed 3 transformations 3
- 4. Confidential WUNDERVC Each transformation hasbirthed a new set of players 4 Industrialists SW Generalists SW Specialists Siemens 1847 GE 1892 Schneider 1836 Rockwell 1903 Honeywell 1906 ABB 1883 SAP 1972 Oracle 1977 Epicor 1972 PTC 1982 Dassault 1981 Autodesk 1982 Ansys 1970 1870 1969 INDUSTRY 2.0 Mass production, assembly line, Electrical energy INDUSTRY 3.0 Automation, computers, electronics
- 5. Confidential WUNDERVC These players –SW generalists, SW specialists, and industrialists – own specific layers of the automation pyramid 5 SW Generalists SW Specialists ERP MES SCADA/ DCS PLC SENSORS LEVEL 4: ENTERPRISE Business planning and logistics LEVEL 3: MANAGEMENT Manufacturing operations planning LEVEL 2: OPERATIONS Monitoring and supervising LEVEL 1: CONTROL Sensing & manipulating the physical production process LEVEL 0: DEVICE Physical production process Industrialists
- 6. Confidential WUNDERVC Design Plan Procure Make– sub- assembly Make – finished product Deliver Operate Industrial automation business processes span from upstream ‘design’ to downstream ‘operate’ 6 CAD - Computer Aided Design SCM – Supply Chain Management Procurement MES/MOM – Manufacturing Execution System/ Manufacturing Operating Management TMS – Transportation Management Systems WMS - Warehouse Management Systems PLM – Product Lifecycle Management CMMS – Maintenance management ERP – Enterprise Resource Management Field services
- 7. Confidential WUNDERVC 7 19.0% 14.8% 12.9% 23.6% 11.1% 8.6% 6.7% The marketsize for business process software in manufacturing and industrial alone was >$60 Billion in 2022 $2.7 $8.4 $15.2 $0.8 $1.5 $21.9 $10.4 WMS TMS MES/MOM Procurement Analytics Supply Chain Analytics PLM CAD 2022 (USD Billion) 2022 – 2030 (%) $61 Billion Market Size 11.6% CAGR
- 8. Confidential WUNDERVC 8 SW generalistsand industrialists are massive companies $31.4 $96.2 $111.8 $129.0 $131.8 $15.5 $25.9 $42.3 $52.5 $4.7 $156.2 $263.1 $8.4 $32.7 $69.0 $77.3 $36.0 $2.0 $2.1 $5.0 $6.1 $1.1 $32.7 $48.0 Rockwell Schneider GE Siemens Honeywell Ptc Ansys Autodesk Dassault Epicor SAP Oracle Market cap (USD Billion) Revenues (USD Billion) SW Generalists Industrialists SW Specialists (2020 trade sale) May 2023
- 9. Confidential WUNDERVC Incumbents have spent$ Billions to enter new markets 9 Acquirer Target Price Description Year Dassault Medidata $5.8B SaaS-based clinical development solutions for customers' clinical trials 2019 Rockwell Plex Systems $2.2B Smart manufacturing platform for making products 2021 PTC ServiceMax $1.5B Cloud platform that improves the productivity of complex, equipment-centric service execution 2022 Autodesk Innovyze $1B Smart water infrastructure modeling and simulation software solutions 2021 Autodesk PlanGrid $875M Cloud-based construction document collaboration platform 2018 PTC Arena Solutions $715M Design, produce, and deliver innovative products to market fast 2020 Siemens SupplyFrame $700M Industry Network for electronics design and manufacturing 2021 Siemens Mendix $700M High-productivity platform to create and improve multi-channel applications at scale 2018 Ansys Analytical Graphics $700M Modeling, analysis, and visualization software for mission-level engineering applications 2020 PTC Onshape $470M Product development platform uniting CAD, data management, collaboration tools, and analytics 2019 Price $M Description $470 $700 $700 $700 $715 $875 $1,000 $1,500 $2,200 $5,800 May 2023
- 10. Confidential WUNDERVC 10 Siemens, Ansysand Autodesk have been the most active acquirers in the past 5 years 2 1 4 1 3 4 1 3 1 1 4 7 4 8 6 6 13 16 Epicor Oracle GE SAP Dassault Schneider Ptc Rockwell Honeywell Autodesk Ansys Siemens Software acquisitions* Jan 2018 to July 2023 Other acquisitions Acquisitions > $250M Industrialist SW Specialist SW Specialist Industrialist Industrialist SW Specialist Industrialist SW Specialist SW Generalist Industrialist SW Generalist SW Generalist 19 14 10 9 9 8 8 6 0 0
- 11. Confidential WUNDERVC Design Plan Procure Make– sub- assembly Make – finished product Deliver Operate The industry participants are increasingly encroaching on each others territory 11 Industrialists (Siemens, Schneider, GE, Rockwell, Honeywell) Expanding from electro – mechanical automation into software SW Generalists (Oracle, SAP, Epicor,…) Started in ERP and moved top down into specific applications SW Specialists (Autodesk, Dassault, Ansys, PTC,…) Moving downstream from CAD
- 12. Confidential WUNDERVC There have beenonly two IPOs in the industrial tech space since the term Industry 4.0 was coined 12 WUNDERVC C3 AI Enterprise AI software for accelerating digital transformation •Revenues: $269M (FY ‘22) •Market cap: $3 B (Oct ’23) •IPO in Dec 2020 •Founded in 2009 Samsara Cloud platform to harness Internet of Things (IoT) data for insights and improved operations •Revenues: $780M (FY ‘22) •Market cap: $12.6B (Oct ‘23) •IPO in Dec 2021 •Founded in 2015
- 13. Confidential WUNDERVC Will new standalonecompanies establish themselves in the Industry 4.0 category? 13 ? 1784 1870 1969 2011 Today
- 14. Confidential WUNDERVC The automation industryhas completed 3 transformations, and each transformation has created a new set of players The market for business process software alone is > $60 Billion; it is dominated by established SW generalists, SW specialists and industrialist companies Incumbent players have acquired to enter new market segments; will new standalone companies establish themselves in the Industry 4.0 category? 14