HxGN LIVE 2023, Las Vegas

Alan Griffiths, Cambashi.???????2023.09.04

Summary

What an interesting corporation. Hexagon AB operates in many sectors from plant design to mining to surveying, with over 24,000 employees in 50 countries. It has a long legacy through companies such as Integraph , now focused on plant design in the Hexagon Asset Lifecycle Intelligence division, data capture through Leica Geosystems part of Hexagon , and sustainable innovation and green-tech technology through the new venture capital arm of R-evolution , a Hexagon company. It also has a major presence in the BIM software, partly through its acquisition of Bricsys in 2019.

Cambashi’s main attention at HxGN LIVE was on the 海克斯康 (MI) division presentations that covered CAD, CAM, CAE, inspection and QMS, MI has an annual revenue of approximately $2 Billion, with over 8,000 employees. Our analysis focuses on Hexagon’s software products.

Hexagon presenters included Josh Weiss President of MI, and Parth Joshi , who leads MI’s Business Units including: Design & Engineering Software (formerly MSC Software), Metrology Devices, Metrology & Production Software, Volume Graphics, and the Nexus smart manufacturing platform. We met with Abhishek Sengupta , Vice President of Portfolio & Technology Strategy, MI, to discuss strategy and market intelligence and with Rahul Kejriwal , CEO at Bricsys NV (now a Hexagon company in the Geosystems division) to discuss Hexagon’s BIM technology and strategic positioning.

For details of several announcements Hexagon made during the conference, see Paolo Guglielmini summary of HxGN LIVE at: https://tinyurl.com/ys285ex2

Cambashi Observations

Hexagon has impressive coverage of a wide range of technologies that provide productivity – an important requirement, given the shortage of skilled labor. It targets a range of software markets covered by Cambashi, including CADCAM/PLM, MCAE, BIM, MOM, and IIoT (Connected Applications).

Hexagon’s Production Software strategy has combined a large range of CAD, CAM, and inspection products into four coherent suites, allowing users to make simpler, cost-effective choices, which will be attractive to manufacturing companies – particularly within its current customer base.

Hexagon now has significant presence in BIM, particularly in the BIM Operate segment which has promising growth potential – the top 5 providers account for only 1/3 of the market. There is also good ?potential for growth in the BIM Construct segment, where it has less market share.

Nexus represents a bold vision to provide a central, open, cloud-based system that Hexagon’s customers, their partners and suppliers can use for collaboration throughout the product lifecycle. Nexus is a powerful, well-engineered product that will be of immediate value to many of Hexagon’s customers. As most CADCAM providers also have collaborative capabilities, Nexus’ open architecture and integration tools will support collaboration.

Hexagon has for years been a leader with its approach to sustainability, and R-evolution is an innovative approach to enabling innovation in new areas. Given Hexagon's wide portfolio of software that covers the product lifecycle, more capability can be applied to ‘designing-in’ sustainability in the early stages to include downstream factors such as raw material selection, traceability, recycling etc.

Selected Highlights

Paolo Guglielmini’s Q&A Session

When asked how Hexagon is planning for growth (target industries and GEOS) Paolo confirmed that its focus is on:

·?????? Process industries: while already strong in Oil & Gas, it will target industries where there is room for further digitization.

·?????? AEC (Architecture, Engineering, Construction): BIM Design is somewhat saturated, so it will focus more on the BIM Construct and BIM Operate segments and overall integration across all three.

·?????? Discrete Manufacturing: again, integration is key ‘from shop floor to top floor’. He also noted that the automotive industry is the toughest market (particularly the OEMs) so the success of Divergent Technologies Ltd. – as a Tier1 supplier to Mercedes and others, using additive manufacturing techniques – was significant.

·?????? Its data capture and inspection technologies provide a competitive advantage across the board, as will its use of cloud/hybrid technology.

·?????? Effort will be balanced across the main GEOs.

On Generative AI, Microsoft is a key partner, and Hexagon has made several acquisitions for Mobile Apps, including for the shop floor and construction sites.

When asked about Hexagon’s acquisition strategy, Paolo introduced Ben Maslen , Chief Strategy Officer, who oversees all Hexagon M&A activity. According to Ben, Hexagon has completed more than 170 acquisitions since the year 2000. It will typically: a) select and screen 3 or 4 candidates in the desired field; b) carefully plan integration into the Hexagon group, and c) use a decentralized approach to foster entrepreneurship. Its success rate has been significantly better than the industry’s ‘typical failure rate of 10-30%’.

Its due diligence process reflects the corporate focus on sustainability by evaluating aspects of the target company in quality, business practices, environmental performance, and management. It also looks for industry certifications from ISO (International Organisation for Standardisation), and LEED (Leadership in Energy and Environmental Design).

Chuck Mathews on Production Software

Chuck Mathews , GM Production Software, MI, ?along with Olivier Thenoz and Alexander Freund , presented Hexagon’s new Production Software strategy. The products – many coming through acquisition and with overlapping functionality – have been reorganized into four groups: Mould & Die; Production Machining; Sheet Metal Fabrication; and Wood, Stone & Composites.

‘Enabling Products’ work across the suite, and include integration / collaboration tools (e.g. Nexus) and planning / management / analysis tools (e.g. Datanomix and WORKPLAN).

Analysis and Insights

Overall, Hexagon’s Production Software strategy has combined a large number of products, many of which have been acquired in recent years, into four coherent suites, allowing users to make simpler, cost-effective choices to meet their needs.

Improving productivity and quality is a common theme. This improves the completeness of the offer, making it more likely to attract new customers and less likely for existing customers to go elsewhere. There is also a benefit to sustainability as waste is drastically reduced by using better software tools to design production methods – such as using more efficient machining strategies and additive manufacturing that save energy and conserve material.

Hexagon has an ambitious target to increase its market share in Production Software and it is targeting a wide range of industries. It is also widening the functionality from initial quotation, through production to delivery, with intelligent management of the processes involved – as shown below.

Hexagon considers steps 1 and 2 to be ‘CAD for Manufacturing’ (using its DESIGNER product), steps 2 and 3 are ‘CAM for CNC Programming’ (EDGECAM, ESPRIT EDGE), steps 3 and 4 are ‘Process Verification’ (NCSIMUL), steps 5, 6, and 7 are ‘Production Intelligence’ (Datanomix and IMC).

Overall control is provided by Nexus, Hexagon’s new collaboration product.

Parth Joshi on Hexagon’s discrete manufacturing solutions

Parth Joshi , MI’s Chief Product and Technology Officer, gave an overview of Hexagon’s discrete manufacturing solutions and positioned Nexus as: ‘an open platform designed to scale to the needs of manufacturers, and digitalise the product lifecycle from engineering to production and quality management’. It is designed as a cloud-based system to support collaboration between the Design, Make, and Inspect functions – as shown in the diagram below.

Arno Zinke , Senior Vice President Software Engineering for MI, explained the Nexus architecture and its open approach – which is vital to allow collaboration between organizations, and integration with other systems. Arno’s background as former Chief Platform Architect at Autodesk and his involvement in Autodesk’s Forge platform stand him in good stead for this role.

We also spoke with Stephen Graham , Executive Vice President and GM Nexus at MI, who leads the Nexus program. Nexus represents a bold vision to provide a central, open, cloud-based system that Hexagon’s customers, their partners and suppliers can use for collaboration throughout the product lifecycle. It has an impressive team leading the development and strategic deployment, and strong partnerships with 微软 for Azure services and co-development of the FLUID framework, and 英伟达 which with Omniverse adds visualization for photorealistic experiences and hardware-accelerated AI capability.

R-evolution

Erik Josefsson is CEO of R-evolution, a Hexagon company, that also has a venture capital arm which invests in sustainable innovation and green-technology. See press release here: https://lnkd.in/emZXbDX

Erik showed some fascinating examples where R-evolution is leveraging Hexagon’s world-leading surveying and data capture hardware technology to achieve sustainability goals. He explained how seagrass can be used to increase carbon absorption. Seagrass meadows naturally sequester greenhouse gases approximately thirty-five times faster than tropical rainforests and store ten to fifteen times as much carbon.? Along with the use of solar arrays and hydrogen power, this enables R-evolution to improve global sustainability. The Bahamas-based seagrass project combines data from sensor-tagged tiger sharks, satellite technology, marine vessel surveys, scuba divers, and Hexagon’s airborne bathymetric LiDAR, to map most of the Bahamas seagrass meadows – estimated to be 92,000 square kilometres – 40% of the world’s known seagrass habitat. ?

By establishing a separate company to research, develop, and – if necessary – acquire new technology to support sustainability Hexagon has created a vehicle that can move quickly into innovative and experimental areas, that may not initially be profitable. For a period of time, the solar division of R-evolution was the most profitable in the whole of Hexagon – but this was due to the unusually high energy pricing caused by the Ukraine war. Other areas such as seagrass sequestration are more difficult. It is considering an innovative approach to ‘monetizing’ this approach by creating a new asset class on the NYSE that can be traded, thereby allowing companies to offset their carbon.