Managing Automation - January 2009 - (Page 11) Global Finance, to put together low-interest financing deals for customers that buy Infor’s enterprise software running on IBM’s iSeries hardware. The comprehensive deals, offered on a case-by-case basis, cover software, hardware, consulting, and implementation. Infor’s effort has involved pre-qualifying customers and training its sales force in the flexible financing options, said Dennis Michalis, senior vice president for global partners. There’s no mystery what’s behind these offers, vendors and analysts said: Software vendors want to combat slowing business technology purchases by offering low-cost credit to select customers. As the recession has tightened, corporate spending on information technology has waned. Recently, in the wake of the financial crisis, IDC reduced its estimate of 2009 corporate IT spending growth to 2.6% from 5.9%. “We wanted to help customers with their liquidity by offering credit options,” Stiles said. “We did it also to help solidify our business and help our channel partners.” In effect, analysts say, vendors are stepping in as financing from traditional sources such as banks has dried up. “It’s sad, but the vendors are doing what the banks should be doing,” said Ray Wang, research vice president at Forrester Research. As the recession drags on, manufacturers can expect to see more low-cost financing deals from software and hardware vendors, analysts said. Microsoft will decide in March whether to extend its 0% financing offer, said Gayle Hoshino, general manager for Dynamics pricing and services. And Infor is beginning to ramp up a similar deal for discrete manufacturing buyers of its ERP LN product, Michalis said. In fact, experts said, the use of financing, whether from banks or vendors, to purchase software is likely to continue growing, even after the economy improves. “We’ve definitely seen an increase in the use and recognized value of financing,” said Stiles at SAP, which launched its own software financing efforts in 2003. “There’s always an interest in managing an organization’s cash more effectively, and that’s particularly true of small and medium-size organizations.” Not all organizations will qualify to receive the low-cost financing deals, however. Although SAP is offering online qualifying for 0% financing up to $150,000, vendors and their financing partners, for the most part, will be fairly selective when it comes to handing out cheap money. “Typically, they require strong credit histories and strong balance sheets,” Wang said. “Today, nobody’s interested in making bad deals.” NEW ROCKWELL SOFTWARE CHIEF EYES ‘KILLER APPS’ alk about bad timing. Just as Rockwell Automation began to rev up its process solutions business, the economy tanked. Now, there’s renewed pressure on Ralph Carter, the newly appointed president of Rockwell Software, who has been handed his marching orders. “The goal is to grow the information solutions portfolio,” said Rockwell Automation Chairman and CEO Keith Nosbusch. “It’s no different than the challenge we had before.” Oh, but it is. Before, when Kevin Roach led the group prior to resigning in September 2008 to join Activant Solutions Inc., Rockwell, like most of its competitors, was standing on solid financial ground. Now, the economic earthquake that is shaking up the industry has forced Rockwell to restructure in order to reduce costs. And while Rockwell’s software group appears to be safe from any downsizing — having just completed a handful of acquisitions that add manufacturing intelligence, advanced process control, safety, and engineering expertise under the FactoryTalk production management framework — the company’s ability to penetrate the process market could be on shaky ground. Indeed, oil and gas, life sciences, and food and beverages are the only industries that continue to flourish in a down economy, as these segments generate products that people need to survive. But there are signs that the process automation market is getting tougher. Emerson Electric Inc., for example, reported a 6% drop in underlying orders in October and a decline in the value of orders coming into its Process Management group due to currency exchange rates. Does Carter have the leadership skills to Ralph Carter pull Rockwell through a rough patch? Industry observers say he does. Carter, who joined Rockwell through its acquisition of predictive control maker Pavilion Technologies in 2007, brings a process-oriented background that includes stints at EAM vendor Datastream and Honeywell’s Industrial Automation and Control division. “Ralph has a strong automation and produc- Scan T Back inMA T MA JANUARY 2008 he results of an MA reader poll conducted in October 2007 revealed a sharp decline in confidence in the economy for the upcoming year. Manufacturers’ worries stemmed from a weak dollar, a growing mortgage/credit crisis, and uncertainty in the stock market, all serving to erode respondents’ confidence in their own industries. Nevertheless, going into 2008, manufacturers still had their sights trained on business activities designed to promote growth. MA JANUARY 2004 T he first step in crafting a global security plan is to assess the risks by evaluating and understanding the vulnerabilities, actual threats, and consequences of a breach. Then a company can decide when risk can be ignored, mitigated, or eliminated. The next steps, MA reported, are to develop a global security policy and implement the business processes and technology to secure their systems. M A J A N UA RY 19 9 9 V irtual partnerships that blended the design, manufacture, and sales and marketing expertise of multiple companies were enabling companies to get on the fast track of turning innovative ideas into salable products. One could point to success stories in the electronics industry. The question then became whether manufacturing as a service would prove viable in other industries. The lures were faster time to market, flexibility to change product mix as demand required, and ready access to high-quality manufacturing. M A J A N UA RY 19 9 4 I n the second annual software review issue, MA profiled 200 specific software products and 150 companies. Feedback from readers led to a focus on MRP II, statistical quality control, and expert systems. In addition, industry experts took a stab at predicting future trends in software technology in a variety of product categories, including quality management, design, open systems, and MES. 11 January 2009
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