A Brief History of Manufacturing Software

About this Episode

In episode 10 of the podcast (@AugmentedPod), the topic is “A Brief History of Manufacturing Software.” Our guest is Rick Bullotta, Partner, TwinThread, and co-founder, ThingWorx.

In this conversation, we talk about how Rick has shaped manufacturing software history and the lessons learned from being an early employee of Wonderware, the famous precursor to manufacturing automation, back in 1993, a company first sold to British engineering giant Siebe in 1998, which merged with BTR to form Invensys, which, in turn, merged with French multinational Schneider Electric, and later the CTO. Rick Bullotta was also the co-founder of Lighthammer Software which was later acquired by SAP, then in 2009 founding ThingWorx, the first complete, end-to-end technology platform designed for the industrial Internet of Things (IIoT) which was acquired by PTC in 2003. We also touch on his current advice to founders in the industrial space, his board role at Tulip, and what he sees lie ahead for the industry.

After listening to this episode, check out Thingworx as well as Rick Bullotta's social profile.

• Thingworx
• Rick Bullotta

Trond's takeaway: Wonderware, Lighthammer, and ThingWorx are prominent parts of manufacturing software history, and there's a chance that the 4th company he now is involved with, Tulip, also will be. I do things with things is Rick Bullotta's motto. The things he does, he does them well, and it is an internet of things, more than anything else. I, for one, am eagerly listening to what he predicts will happen next.

Thanks for listening. If you liked the show, subscribe at Augmentedpodcast.co or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like episode 4: A Renaissance of Manufacturing or episode 5: Plug-and-Play Industrial Tech. Augmented--the industry 4.0 podcast.

Transcript:

Augmented reveals the stories behind a new era of industrial operations where technology will restore the agility of frontline workers. In Episode 10 of the podcast, the topic is a Brief History of Manufacturing Software. Our guest is Rick Bullotta, Partner at TwinThread and Co-Founder of ThingWorx.

In this conversation, we talk about how Rick has shaped manufacturing software history and the lessons learned from being an early employee with Wonderware, the famous precursor to manufacturing automation, back in 1993, a company first sold to British engineering giant Siebe in 1998, which then merged with BTR to form Invensys, which in turn merged with French and multinational Schneider Electric and later the CTO.

Rick Bullotta was also the Co-Founder of Lighthammer Software which was later acquired by SAP. Then in 2009, founding ThingWorx, the first complete end-to-end technology platform designed for the industrial internet of things, which was acquired by PTC in 2003. We also touch on his current advice to founders in the industrial space, his board role at Tulip, and what he sees lie ahead for the industry.

Augmented is a podcast for leaders hosted by futurist, Trond Arne Undheim, presented by Tulip.co, the manufacturing app platform, and associated with MFG Works, the manufacturing upskilling community launched at the World Economic Forum. Each episode dives deep into a contemporary topic of concern across the industry and airs at 9:00 a.m. U.S. Eastern Time every Wednesday. Augmented - the industry 4.0 podcast.

TROND: Rick, how are you today?

RICK: Good morning.

TROND: Well, it's a nice morning. I wanted to talk to you about some history.

RICK: Sure.

TROND: Well, you are a bit of a legend in this field, Rick. You've been basically part of almost every development in this field for several years. I wanted us to spend a little time today, not just going into your history of background as the founder of several startups that have had very significant impact on the industry but also just bring people in a little bit to the environment and how it has changed, and how based on your perspective, you see it evolving.

You had a degree from Cornell, and then you went on to fund several companies. Can you bring us back to those days when you were studying industrial engineering at Cornell? What was the environment then for manufacturing? And what was it that brought you into the thought that you would start engaging sort of entrepreneurial software development in manufacturing of all fields?

RICK: Just to be clear, I barely graduated. [laughter] So I had a fantastic time in college. But that was when I think we thought of engineers as mechanical engineers, or chemical engineers, the physical aspects of making things, building things, vending product as opposed to...I think software and technology was kind of a nascent concept there, at least certainly in manufacturing.

But I actually switched degrees from mechanical engineering to operations research mid-stride there, realizing that looking at pieces of broken metal under a microscope wasn't for me. So I graduated. My degree was in operations research, and actually, my first position was at a very progressive steel company called Lukens Steel, doing essentially industrial engineering work.

However, this was what? 1985, dawn of the PC, dawn of a new gen of computing. And some opportunities opened up there to kind of take on some additional responsibilities that involved applying computing to simulations and optimization models, all the stuff that I studied but never thought I'd actually practice. So I'd spend a lot of time in the local library checking out software, take the disc home, teach myself to code.

An opportunity then opened up to go into steel plant operation. So I used to run a heat-treating process. And that's one thing that a university degree won't prepare you for, having 15 steelworkers working for you. That's where you get a real education. You also quickly realize that the exception is the rule on the manufacturing floor. And we'll talk later about how it gave me a great appreciation of the importance of the role of people in this whole process and not just technology.

But yeah, I spent a few years in that role and then moved back over to an industrial computing group. And we were applying at the time very advanced technology, mini computers, very innovative user interfaces, high levels of automation to some of these processes back at the very site that I worked. And the very operations that I worked at was one of the first places for that. So that's kind of where I got into the technology side of things.

But I like to say I was blessed and lucky, right? This crusty, old steel company happened to be very, very committed to investing in technology. And it was a learning opportunity for me. And then, across the years, I moved into systems integration. I did some stuff in discrete manufacturing. I had the opportunity; again, luck sometimes happens here, to work for arguably the first well-known company in the industrial software space company called Wonderware, first IPO in the space. And I joined very early, which is kind of cool.

TROND: The Wonderware story is somewhat famous for people inside of manufacturing, but just in case, there are some listeners here who don't really appreciate how early Wonderware was. What was the situation when you created your first product? And why, in your account, has it become so emblematic of that early-early era? And what year are we talking about exactly when that entered the stage with Wonderware?

RICK: So late '80s, early '90s Wonderware came on the scene. I joined in; I believe it was '93. And my role there was actually in sales. So you'll find that a lot of my life experiences are all the elements that help build a successful business: sales, marketing, technology. So the founding team there...and there'll be a circle of life moment here in a little bit when we talk about how ThingWorx came to be.

The two key co-founders there, Dennis Morin and Phil Huber, recognized the value. And they harnessed the PC revolution and Microsoft Windows. So we're talking Wayback Machine when Windows looked like the Mac user interface. There wasn't a lot of PC application on the plant floor. There were some very interesting companies that I had worked with, competitors to Wonderware but a bit earlier companies like [inaudible 7:28]

But we were just kind of at that inflection point where people were comfortable with the role of the personal computer as this kind of human interface to all the automation systems that we had. What Dennis and Phil did was really twofold. And this, I think, ties into a lot of the innovation we're seeing today is they democratized the ability to build applications. They made it easy and fun.

So the whole experience wasn't coding; it was very visual. It leveraged kind of a drag and drop experience. You didn't need to understand software to apply it. You could build these incredible applications literally in minutes or hours, connect them to the physical world. I don't know if you've ever seen some of the classic applications they've built. But they're those process mimics, very dynamic graphics that represent the physical world.

And I learned a lot during that period about the importance of two things: one is ease of use and empowering others to build applications, particularly in the manufacturer domain. Second was, ironically, the importance of marketing. If there's one thing, that company did extraordinarily well in addition to having a great product was getting the message out there, maintaining a larger-than-life image. And the company grew rapidly to 5 million, 10 million, 15, 20, and on and on, and then IPOed.

But there wasn't anybody in history that didn't know the name. Go to a trade show...this is a company that kind of put some perspective. I think the first year I was there; we did about 20 million in revenues. We spent about a million-five on a party. That's kind of the priorities were well balanced there. But what an extraordinary group of people to learn from; I developed lifelong mentors and friends at that company that fast forward to my last company, some of those same people came and joined my team. So it was a complete honor to work with them again, so yeah.

TROND: So back in those days, what was it that Wonderware apart from the marketing side, and like you said, the menus and things...first of all, who was the target audience at this point? Was this still process engineers that were doing this, or was it still the IT department managing?

RICK: Typically process engineers, and that was the democratization, taking it out of that...let's go back to my time in the steel industry. We were writing Fortran code, PL/M code. We were writing code. We were creating database schema, all the kinds of classic development processes. And it was part of a corporate IT function. Now, this shifted to empowering two main groups, process engineers inside these manufacturing companies and, secondly, a new breed of systems integrators that were very, very focused on this automation domain.

So historically, they may have done the physical automation, the PLCs, the actuators, sensing distributed control systems. Now they were able to take on this role. Two other things happened. Just prior to the advent of things like [inaudible 10:42] and Wonderware, that user experience was physical gauges, and push buttons, and things like that, and sliders. Now, it became digital.

In a way, this was almost like magic at the time. It's virtual reality. It's like a lot of people the first time...I'll never forget my mother the first time she played solitaire on a PC and that virtual card dragging. It was just utter magic. Well, similar experience here, right? People were able to reproduce these and rapidly reconfigure. But to your point, I would say, yeah, it was those in-house process engineers and the systems integrators that helped implement these systems.

TROND: Were you all aware of how innovative you were? I mean, clearly, the marketing department thought you were something special. But did you realize at the time how timeless and etched into manufacturing history Wonderware would become later? Were you aware of how far ahead this was? Or were the customers telling you that clearly?

RICK: That's a great question. I think it was a combination of both. We had an almost cult-like customer following that was pretty unique, and it created a lot of energy. They knew we were doing something interesting. But we had very legitimate competitors who were also doing super cool stuff. I think another life lesson here was a lot of companies create great products. To bring great products to market at scale is a whole nother task. It's a whole nother challenge.

And I think what we had going for us was an absolutely extraordinary distribution channel, global distribution channels, and very energetic, bright people, independent businesses that could sell, support, implement this technology. That allowed us to achieve scale pretty quickly. But the customers were the primary feedback loop. We won all kinds of awards from the trade rags, all that kind of stuff. I definitely think it was the kinds of applications that the customers were building. That always gives you energy when you see that.

TROND: Rick, give me another sense of as we're sort of moving to your next company, just bring us back to that time with the early years of Wonderware. What were some of the things that were challenging to you on the application side then that today we would laugh off and it would just be like a line item? What were some of the things that were really complicated that you were so proud of having accomplished?

RICK: Well, let's just take the obvious, which is sort of the inverse of Moore's law. If we turn the clock back that many years, we have half as much compute power every year. And to have a very graphical dynamic user experience, it had to be reliable. I would not underestimate the incredible work that that development team did to take not only a new product in what we built with InTouch, which was the product at the time but also Windows itself. It wasn't evolved. It wasn't mature. It certainly wasn't targeted at these kinds of mission-critical applications.

So those were the kinds of things you had to work with. You had to make it robust, reliable, and take advantage of very, very limited compute and visualization capability at the time. It changed the modalities by way...people typically, you know, we were all used to keyboards at the time. Now it's touch; it's a mouse. It's a different means of interaction. And then how do you bring that? Some interesting challenges. Like, I'm a task worker down on the floor in protective equipment and gloves, and how do I interact with that? So all kinds of creative stuff to try and bring a whole new modality of human interaction to a pretty demanding segment.

TROND: So what then happened to you? What happened around you leaving Wonderware and moving on to the next challenges? Because you've also had a foray in larger companies, but then you immediately went back to the startup world. Give me a sense of what was your thinking then?

RICK: Sure. So there was a little detour as there are often in our careers. [laughs] I left and experimented. I actually came back to Wonderware a second time prior to my first startup in a product management role. I got to see M&A. So we got involved in a couple of key acquisitions that I was intimately involved in. So that was another learning experience for me. Then I saw this opportunity at a level above the Wonderwares of the world, of the OSIsofts of the world, of all these kinds of operational systems that we had. They were islands.

No one had that holistic view, a supervisor, an operator. No one was sharing information. And so the light bulb went off. This is actually about when the web technologies were starting to get a little traction, the browser, the Netscape effect, ubiquitous TCP/IP connectivity, Ethernet, and the plants. So that's when the light bulb went off. Let's see if we could do something not dissimilar from the way a Wonderware product will connect all your centers and controllers. Why not provide a unified way to see all the systems that you have? So basically, that's what became Lighthammer, and that was in 1998, we started that company.

But the intent was, again, to provide that unified view of first...it was called the Plant Information Portal. That was another cool word at the time, right? Portals. And so that was the objective, it's kind of unified visibility. I started the company with some colleagues that I knew from Wonderware. And we built, I think, something pretty groundbreaking there.

TROND: And the situation then was there was this need for almost like an information service to kind of...it was almost like an early portal for the industry in a sense.

RICK: I think what we found...the unique thing about the industrial space I like to say that everything's a legacy the moment it gets put in. Everything has proprietary APIs, interfaces, and protocols. My approach has always been solve hard problems because you're going to have fewer competitors, and the value is there. So we tried to solve a pretty hard problem, all these like debubblizing all these different crazy systems that were scattered around.

Yeah, so that's really what the objective was initially, unified visibility. But then we realized if people can see that information, why can't other systems? So it rapidly progressed from just being empowering people with information to empowering other lines of business systems. So your supply chain systems, warehouse systems, ERP systems can now be informed with real information in a timely manner. And that was what got us on SAP's radar.

TROND: Well, because the point was there that you started discovering the importance of standards. And there were standards at that time, but they were very basic web standards. And you started realizing that even in the side of the industrial field, you had to start depending on that. Is that also what got you involved in the intersection of interoperability and also open sourcing certain types of software?

RICK: Yeah. In fact, we were actively involved in a lot of open-source projects. I think that was also early in the open-source world. So if something was broken, no one was going to fix it for you; you fix it, right?

TROND: [chuckles]

RICK: So yeah, if you want to leverage and get value out of open source, you better be prepared to give back. So as a company, we definitely gave back to a lot of interesting projects that became part of the Lighthammer stack.

The other thing that I think is important to understand is, and this pattern repeats itself in my career, is building tools, not applications. My goal was always to empower people to build interesting stuff. They've got the ideas. They've got the innovations living inside them. But if it's hard, if there's friction at every point in the process, cost, time, whatever, they're not going to undertake it, so whether it was Wonderware stuff we were implementing, Lighthammer, ThingWorx. And nowadays, with solutions like Tulip, it really was all about that takedown friction, empower non-technical people to be innovators and do it fast.

TROND: So, Rick, then you got on SAP's radar. Tell me a little bit about not necessarily your experience there per se but just the difference for you in having straddled a startup that gets on the radar of a large company, and now you're working in a large company. What's the situation there? What is their understanding of the shop floor, and how does that all work? Because it gets more complicated when you're that kind of a software environment.

RICK: Well, I think SAP was a very good place to be for a number of reasons. SAP was dominant in the manufacturing vertical in terms of cost manufacturing. Customers, the vast majority of them ran SAP for their back-office systems. SAP had kind of light solutions for the manufacturing domain but a desire to go deeper. Secondly, they were launching a partner ecosystem at the time. We wanted to prove that, in fact, partners are an integral part to their offerings. So we were able to kind of get that visibility, but also, we started stealing some revenue.

So when you start taking customer spend instead of upgrading that module in my ERP system, I'm going to spend a couple hundred thousand dollars on my plant floor. That gets you on the radar too. Interesting sidenote, so after SAP, the salespeople told us something fascinating. If you think about in a typical manufacturing company, there's arguably four to seven times more blue-collar...I hate the term blue-collar, task worker, you know, frontline workers, so to speak. But that's got a new meaning nowadays as opposed to back office.

Secondly, we had something that not only had a user license for each manufacturing worker but also manufacturing site costs. So think about comparing selling something to the CFO’s office that will run in a data center. The scale and size of the deals were pretty substantial, and there was real value being created. So I think in the first year, our sales grew like 800%, 900% from a pretty good base, having that ready base of manufacturing customers to sell into a global company with global sales and support presence. It's pretty easy to get traction there.

TROND: But then you had a stint back at Wonderware before you went on to found a new company. What was that like? So you came back and now kind of almost running the show at Wonderware for a little bit.

RICK: No, not really because I think the company...this was an interesting dynamic. The company had grown substantially by that point, so from 60 people in my first experience to probably 800 at that point. I was a remote CTO. This was long before remote work was a thing. It was extremely challenging. And I just think those dynamics kind of made it probably not as effective as I could be. That said, some work that I had done in SAP research is what kind of led to the ideas behind ThingWorx.

And I actually think, to be blunt, I think Wonderware at the time could have realized those pretty well. Collectively, we could have brought that product to market probably faster of what became ThingWorx. But it just for a variety of reasons, it wasn't the right time, fit, location, all those kinds of things. So dove back into it again, got the band back together, so to speak.

TROND: How did that happen? Because at this point, you're not new to startups, and you have had a taste of the corporate world, in fact, in two leading positions, I guess. What is it that then motivates you to go back into that grind, and then you found a groundbreaking company? [laughs]

RICK: Part of it is you feel like you cheated on the test. You've got the scars. You've had the lessons learned. I think we had a pretty well-rounded idea on what the new product was going to be, how we were going to take it to market. So I think we actually went in with a pretty solid plan rather than just A; we're going to do some R&D.

Secondly, my business partners at Lighthammer were my business partners at ThingWorx, common investors. And some new folks that I worked with at Wonderware joined the team. It was sort of...I'm not going to say we couldn't fail. There were a lot of things we could have done wrong. But we had an incredible team of people with a lot of experience building companies like this, selling software like this. I had a pretty good feeling that we were on the right track there.

TROND: And what exactly was ThingWorx in the early days? Because you read things like machine to machine, and those are terms that only much later...today we call internet of things. But you guys were very, very early, honestly, in that domain to produce products in that space when most people were just starting. Machine to machine didn't mean anything to people back then.

RICK: And I think where we did well was going a little bit beyond that. And you'll see, once again, it's a pattern that repeats itself, the importance of people, the machines, and the other systems and processes that people have in their companies. Synthesizing all those together is actually where the value nexus is just massive. Any one of those taken in isolation or the connections between them, yeah, there's value to be done.

But so we went in kind of with a broad...rather than just machine to machine. And there were some companies doing cool stuff just for getting updates down to an MRI machine or whatever. But we tried to go beyond that. We also realized early on the classic issue; it's good to know what you don't know. And remote access over unreliable links and all that stuff was something...My team had primarily lived in what we would jokingly call the internets of things. Everything's on the local network. You have different considerations.

So we acquired a company, a super team, a small company that had a lot of expertise in the kind of internet of things and that remote connectivity, remote management, and that was this the second wave of rocket fuel to get things going.

TROND: That's interesting you say that because I think that temptation for many would be you're so far ahead, and you start building things, and you're building things in the future. But I mean, surely, the reality is the shop floor and other things, and you're dealing with poor internet connections. Forget skills. I mean, you're actually dealing with a network that doesn't scale to your idea.

RICK: Exactly right. And it was a very interesting balance between...I oversimplify kind of that industrial IoT is smart, connected operations and things like that, so factories, power plants, and then connected fleets of stuff, trucks, MRI machines, light towers, and cities, radically different requirements. One's 98% on-prem, one's 99.9% cloud, one's intermittent, unreliable, expensive connectivity, one's reliable, isolated.

So we built a platform to serve both of those tests. In retrospect, we probably made compromises along the way to accommodate that. But still, today, I think PTC’s revenue with ThingWorx is fairly well split between those two domains. But that was an interesting challenge on its own because the requirements were dramatically different.

TROND: But again, you got acquired. So is this a pattern in your companies? Or is it more a pattern in the field that, at a certain point...because, I mean, I'm making this up here. But is there something about the industry itself that lends itself very easily to just in order to get that scale, you have to be acquired, and it's very desirable? Or is it more a choice that you each time made to say we've built it to a certain scale?

RICK: I think in our segment, there are the rare few that an IPO track makes sense, and it's achievable. I think, for the most part, companies in our domain are...they're talking acquisitions to technology companies, cloud companies, enterprise app companies, industrial automation companies. So they have the luxury of we can be the innovation engine. It doesn't have to come off...

If you think about a BigCo that wants to build something organically, every dollar they submit...first of all, they're typically 10 to 20 times, and it's just reality, less efficient in developing software for a variety of reasons. And that money comes off the bottom line. So it's actually an interesting dynamic that it's almost more attractive for them as well.

But the ThingWorx story is super interesting in the sense that I told someone the other day...so Jim Heppelmann super visionary right there. He had this concept of the digital twin and IoT connected with products way back. And he actually took some of his best and brightest people, his CTO, a number of other people, moved them out of their office, put them in the Cambridge Innovation Center, and said, "Go create something."

Well, along the way, we got introduced to that team. And they came to the conclusion that, hey, it's going to be faster, cheaper. We can get to market capture mindshare quicker through acquisition. And if you think about it, that's a very...immature is not the right word. I don't even know what the word I'm looking for here, but it's you've just been given an opportunity to intrapreneur. You've got a clean sheet of paper, all the fun stuff after grinding out your day job for years.

And you make that decision to well; we're not going to do that. We're going to go buy a company. I have huge respect for that. And it turned out to be a very good decision for everyone involved. So that's actually how that happened. We were an intrapreneurial effort at a relatively large company, decided to go and become acquisitive instead. And that's worked out quite well.

TROND: So we haven't talked so much about the surrounding companies throughout these years. But were there other companies doing innovative things? I'm not so familiar with the history of all of the kind of less successful or less visible manufacturing IT companies throughout the early '90s. What was wrong with some of those, and why don't we talk about them? I mean, are they also still part of the picture? Were there smaller acquisitions that go into this history?

RICK: Yeah, there's actually a lot that we were doing right. It was a big enough pie that the gorilla, you know, in the segment might only have a 20-something percent market share. So it was still fairly fragmented. It's partially because of geography, partially because of different segments, and partially just because it was such a big opportunity. The companion market to a lot of what I was doing, for example, at Wonderware and Lighthammer, was the data side of it. So that's the historian companies.

Greatest example of that recently is the acquisition of OSIsoft by AVEVA for $5 billion, biggest little company you never heard of. I mean, just a fantastic success story. They stuck to what they did very well and built essentially a dominant market position. They had competitors with good products as well. But I think they're one of those success stories in that space that's only visible to most people now. We had competitors in almost every company I've ever worked at that had great solutions.

But this is, again, where I think the X factor stuff comes into play. Your go-to-market machine, the passion that your team and people have that's contagious. If people really believe and they interact with customers and partners, it's just magic. The second thing was, again, where you're really doing useful stuff for customers. Some companies were software companies. Some companies were really just integration companies masquerading as software companies. But, Trond, you know this. There's no shortage of bright people on this planet, and it's --

TROND: Well, sure, there's no shortage of bright people. But I guess this is the third segment that I wanted us to get into. You kind of have a third career now, which is this portfolio life, I guess. [laughs] You can characterize it yourself, but I don't know how to explain it otherwise where you're seeing, first of all, a number of companies and the maturity, I guess, in the space, that's a little different. But you are in a different stage in your career. And I want to eventually get to Tulip and discuss why you got involved with that. But first, maybe you can address some of these portfolio things that you're doing right now.

RICK: Sure.

TROND: Obviously, mentoring a lot more and getting involved on the board side. How do you see even just the last five years? What's happening right now? Where are we right now with manufacturing software?

RICK: So generically, I would say I'm doing manufacturing and adjacent stuff, kind of IoT industrial. I am so excited that it's cool again, right? Because it was for two decades. It was like --

TROND: Well, you were never concerned about that, surely. [laughs]

RICK: But, you know, what's the old...in the land of the blind, the one-eyed man is king. So if you were cool within your segment, you didn't have to be that great. And you could have done underselling what we achieved at the different companies. But I think it really has visibility now. There's investment money flowing into it. I think the increasing importance of...we kind of hit that little productivity inflection point where it started to flatten out. People are investing in technology.

The challenges around people there's just not a lot of know-how, or there's much less know-how about everything from manufacturing operations to the different tasks that get performed to the technologies. So, how do we offset that? So technology is starting to fill an increasingly important role of focused VCs, and focused investors, and focused incubators around this kind of stuff. I think that's probably the biggest change.

And then, like any technology segment, the building blocks, the Lego blocks that we build from, just get better and better and better. Someone that wants to add AI capabilities to their solution today, it's never been easier. I want to add Vision. Now, what you do with it can be very differentiating. But my point is that the building blocks we have today are just better than ever.

I think the challenge...what's changed maybe in a negative, I think the way you get to customers, get to market has changed and become more challenging. An example, if you think about a venture-funded or otherwise funded startup, turn the clock back 10 or 15 years. We primarily sold perpetual licenses plus maintenance. So you get a big chunk of revenue upfront.

Today in the SaaS and subscription world, in essence, we're all in the financing business. We're financing our cost of sales, our R&D., So the capital requirements for companies in our segment are bigger than they ever have been. And we see that with some of the raises, but that's just a reality. That dynamic perhaps even gets ignored sometimes, but it is a big change. Yeah, and then, you know, just to --

TROND: And what got you to Tulip?

RICK: So I think it was actually indirectly through Wonderware, if I recall. So Natan and team and Rony and team were looking around at comparables. What are some companies that have been successful growing a business in this space? And he kind of had the hit list of Wonderware folks that he wanted to talk to. And somewhere, somehow, I don't recall the exact moment, but we connected up, and I got it. When he explained what they were doing. The light bulb went off, and I said, "I'd love to be part of this." So I'm both an investor and advisor in the company. And also, I love smart people, like innovative people.

TROND: [laughs]

RICK: And there's no shortage of those in Natan’s team. So first visit there, seeing what they were doing, meeting the team, it was like, all right, there's something going on here.

TROND: So tell me what it is that you saw because I was also...I was at MIT at the time when Natan created the company. And I remember vividly going into the lab or whatever you want to describe his early workspace. Because that's what it was, right? It felt like a lab.

RICK: Sure.

TROND: But the stuff that was coming out was incredible. What do you think? Was it the product vision, or was it just a capability of the people that you saw early on? And now that you're looking at Tulip and its environment, what is being accomplished right now, would you say with this new app reality?

RICK: I think it was the aggregate of all the above. Because great example, if you recall the first demo scenario with the mixed reality projecting instructions onto the work –-

TROND: That was crazy. That demo was for me, the demo of all demos in the -- [laughs]

RICK: Absolutely.

TROND: It was crazy.

RICK: And I said, wow, you're taking a very fresh look at a problem here. And obviously, with their collective backgrounds, really interesting mix of skill sets, they're going to do cool stuff. And I think Natan and team would be the first to admit they were coming in with not a lot of domain knowledge. They had been involved in companies that made stuff, but there was a learning curve for sure. And that's what a lot of...not just myself, but they had a lot of advisors, customer feedback, brought in some folks into the team, and then just learned on the job training, engaging with customers, engaging in pilots.

So I think it took a year or two to kind of get grounded in what are some of the realities of the shop floor, not that they didn't have a good idea. But once that kind of confluence of smart people, customers starting to do cool stuff with it, and the end the product itself evolving, then that's kind of when the rocket took off.

TROND: Well, this is interesting what you're saying here because as I'm interviewing a lot of people who have innovated in this space, time and again, what comes back is this is not just your average software innovation garage. A lab is not a garage. Literally, you can be as smart as you are. You can have a big team of smart people. But unless you get coupled up with that manufacturing shop floor experience, you don't stand a chance, or you just can't build. You can't get past the demo.

Tell me more about that one because you have had it ingrained. We talked about this a few minutes ago. You started out that way. But there are so many more innovators these days that they can't; well, maybe they can start out, but they haven't started out on the shop floor, so many of them.

RICK: I wish they would...everybody who wants to get in this space needs to do...the equivalent of in law enforcement would be a ride-along. You go and spend a couple of nights working the streets. You realize how things really work. It's not like TV. It's not like you read in your textbooks. So there's no substitute for it, even if it's like super-concentrated real-world experience actually going out and spending some time with customers, real-world experience.

But I also think it's the third leg of the stool, which is important. It's the technology expertise and creating products. It's manufacturing domain knowledge and then figuring out how to get it in front of customers and sell it. We can never underestimate the importance of that. So that's another thing that I think Tulip took a lot of very iterative and A/B style testing approaches to go-to-market models and continue to innovate and experiment.

It's a challenging space to do low-touch, but they've found a niche with that, particularly as a means to plant seeds of customers that can take a first taste of the technology like, wow, that's pretty awesome. The holy grail, I think, for a lot of companies in our space to try to figure out how to do that. No one's really completely cracked the code yet. So it's a kind of combination model. But the domain expertise, a couple of key hires, for example, a great example is the hires they made in the pharmaceutical industry.

So life sciences now has become a really, really powerful vertical for Tulip as a result of bringing in civilian expertise plus the evolution of the product from a platform and tooling and some hardware to application, so the app marketplace that they launched. Now when I'm a buyer, you can approach not only that developer buyer, that integrator buyer, but now you can approach a business buyer and say, "I've got all these apps you can assemble together or just use as is." That was also a maturity thing. So it took the domain knowledge, interaction with customers, and then you can progressively build more into the software itself and less that the customer has to configure. That maturation has been pretty exciting to see.

TROND: Rick, we've been through a history here that's very, very exciting to me and, I think to listeners. What's next for the digital factory, for the manufacturing, execution systems, all these acronyms? I tried to shy away from them a little bit because we had so many, many other interesting things to talk about today.

But if you're looking to the next decade, the holy grail you mentioned, or this final integration project that would marry software, hardware, shop floor, and considering all the challenges that just the past year has brought us, and let's not even bring into it all of the other challenges of this decade and of this century, if you're going to go into the big words. Where are we headed?

RICK: I'll maybe focus on where I hope we head, which looks perhaps a little bit different. I started the discussion with one of the things that I learned in my first job working in the plant flow is the importance of people, the knowledge that they have, the experience that they have. People in a lot of our processes are still the sensor, the algorithm, and the actuator.

Like it or not, we haven't yet reproduced the human hand. We haven't yet reproduced the human brain. There are some really unique things about humans. And in that context, I hope that the next decade or so is about collaborative technology and how we use robotics, and AI, and information, and mixed reality to help people be better at what they do. And there's always a risk of dehumanization in something like that where people become interchangeable and they don their Iron Man assembly suit.

But I'll maybe take a more optimistic view that it's really...we're going to continue to increase productivity output. But there are so many roles like that that could benefit from the synthesis of all these cool technologies that we have. I maintain that there's no such thing as an AI market. There's no such thing as an IoT market; that they're all just building blocks, right? It's what we assemble to solve some actual problem that is interesting.

I'm hoping, and I'm confident, that the bar to implement these things becomes increasingly lower. AR is a great example today. It's hard. Building content is time-consuming and difficult. So maybe that's the next one that needs to bring the content creation to mixed reality, next-gen robotics, codebots, and some really interesting stuff happening there. The democratization of machine vision, and audio, and meta sensing that's happening.

TROND: But it's interesting you're saying they're still our building blocks, and they're still our collaboration challenges. And maybe those collaboration challenges are going to have to last longer than a decade, and maybe we need more building blocks. But what comes after that once a critical mass of building blocks get assembled? And you have watched this decade by decade that there's a certain coalescence of building blocks, and then a new platform is formed.

But still, in this industry, as you have said, so far, most of the time, these new platforms merge into the more traditional platform players, or they merge into more established. Is that a pattern that you see also in this decade? Or will we see the first mega conglomerates come out of completely new manufacturing combination platforms that are integrating all of these technologies and doing something truly new and can sustain their own new creation, whatever iteration of the manufacturing industry that would become?

RICK: And I don't know if it's going to be necessarily the suppliers that become the mega innovators. What may well happen is that the manufacturers themselves start to become because the tools have become so powerful that they become the mega. If you actually take a deep dive into a lot of really innovative manufacturing companies, it's the machines that they built to make the product. It's the processes they use to make the product. That's where some of the real breakthroughs happen. That doesn't come from outside. Now, sometimes suppliers can provide some of that equipment. So maybe this is just an amplifier for that.

And the second thing is I know is coming is this massive disintermediation of manufacturing. So we already have companies where the brand owner contracts the design of the product. It contracts people to make the products. It contracts people to service the product and sell the product. So they're literally just the brand name on top of it. Now you matrix that, right? Where you have companies with very, very flexible manufacturing capacity that's additive or traditional. Who knows, right?

But I think a manufacturing supply chain 10-20 years from now is going to look radically different. Fewer companies will be making stuff on their own. But the companies that are making stuff will be really applying some innovative technology to be flexible, versatile. That's never going to happen for grunt commodity stuff where the cost to produce matter; you do purpose-built. But increasingly, look at the proliferation rate on new product introductions and electronic products and so many different things in our lives, clothing, right? There are so many things that we could innovate faster if the manufacturing systems themselves could adapt faster. Maybe that's an outcome.

TROND: Well, I mean, whichever of these scenarios pan out, it seems to me that at least segments of this industry, if it remains, you know if you can talk about it as one industry anymore, is going to be super exciting. So that brings me, I guess, to just my closing question. If you were to advise a young person today who is maybe thinking about college, or they're thinking about should I follow my passion, which happens to be actually going and making and building things? Or should I get a theoretical education, or is that a false choice? Where should they go today?

There's this dichotomy between getting a four-year education versus just going and getting some skills like we have been talking about, so you have some inkling of where you actually need to be to understand in order to produce the innovations.

RICK: I think all the above, and let me elaborate on that a little bit. When I was in university, I created my own co-ops in the summer. So I worked...I sought them out. My son's at Drexel University now, and a co-op program is an integral part of his education there. For a lot of folks, getting kids particularly exposed to co-ops and those kinds of internships give you two things. It might tell you what you don't want to do just as much as you want to do, which is I think a lot of people in their career would wish they knew that earlier.

It helps you get that real-world experience and just interacting with people. So I think that aspect of in your university education doing a diverse and interesting set of co-ops would be very valuable. Having a liberal arts aspect to any technical education or focus skills education is still valid. You have to know how to read, write, speak, those kinds of things.

Design is ever increasingly important. The polymath is going to be a great skill to have. Secondly, learning has never been easier. You've got so many online resources as well. If you need a technical skill, I mean, I could probably learn neurosurgery on YouTube if I really needed to if there was no other option, you know, 60% chance that patient would live.

TROND: [laughs]

RICK: But we have so many different resources. I'm a believer in lifelong learning. So it's not a static thing. Certainly, a highly specialized skill if you're going to be geneticists doing CRISPR whatever, you need to spend 8-10 years of true rigorous study to master a lot of that kind of stuff. Maybe not; maybe that's even getting easier.

TROND: Ricky, you just brought me back to eighth grade and my one-week internship at the National Geological Lab, where I was sorting through minerals. And it's incredible how one week is etched into my mind. I don't think about it every time, and I haven't thought about it for years. But while you were just describing with seeking out these internships, you brought it all back to me. And I can almost remember how the Monday was different from the Tuesday rotation when I went through that institute. There is just no comparison to that kind of real-life experience.

RICK: And the other advice that I give any person is versatile set of skills. Do a sales role sometime in your life. You might hate it, you might despise it, but you're going to learn what the salespeople in your company go through. You might love it, and it becomes a career. Communications, what your marketing folks have. Having a diverse set of skills and getting exposure...maybe it happened accidentally for me. Those were the opportunities that presented themselves, but I think having that diverse skill set and toolbox is extremely valuable, particularly if you want to start a company.

TROND: Rick, I thank you so much. We have gone way over what I had promised and even my promise to our listeners to be very succinct. But this has been, for me, at least a fascinating roller coaster through your career and throughout manufacturing, both history and future. I thank you very, very much.

RICK: My pleasure.

TROND: You have just listened to Episode 10 of The Augmented Podcast with host Trond Arne Undheim. And the topic was A Brief History of Manufacturing Software. Our guest was Rick Bullotta, Partner at TwinThread and Co-Founder of ThingWorx. In this conversation, we talk about how Rick has shaped manufacturing software history and the lessons learned from being an early employee at Wonderware, the famous precursor to manufacturing automation, back in 1993, a company first sold to British engineering giant Siebe in 1998, which merged with BTR to form Invensys, which in turn merged with French multinational Schneider Electric and later the CTO.

Rick Bullotta was also the Co-Founder of Lighthammer Software, which was later acquired by SAP. Then in 2009, founding ThingWorx, the first complete end-to-end technology platform designed for the industrial internet of things, which was acquired by PTC in 2003. We also touch on his current advice to founders in the industrial space, his board role at Tulip, and what he sees lie ahead for the industry.

My take is that Wonderware, Lighthammer, and ThingWorx are prominent parts of manufacturing software history, and there's a chance that the 4th company he now is involved with, Tulip, also will be. I do things with things is Rick Bullotta's motto. The things he does, he does them well, and it is an internet of things, more than anything else. I, for one, am eagerly listening to what he predicts will happen next.

Thanks for listening. If you liked the show, subscribe at Augmentedpodcast.co or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like Episode 4: A Renaissance of Manufacturing or Episode 5: Plug-and-Play Industrial Tech. Augmented- the industry 4.0 podcast.