In episode 19 of the podcast, 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 Inventsys, 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.
My takeaway 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.
Trond Arne Undheim, host (v): [00:00:00] Augmented reveals to 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 twin thread, and co-founder of Thingworx in this conversation.
[00:00:25] We talked about how Rick has shaped Manufacturing, software history, and the lessons learned. Being an early employee at Wonderware, the famous precursor to Manufacturing automation back in 1993, the company first sold to British engineering giant seabed in 1998, which then merged with BTR to Forum Invensys, which intern merged with French multinational, Schneider electric, and later the CE CTO.
[00:00:50] Rick Bullotta was also the co-founder of light timer 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 is gorgeous role.
[00:01:15] And what he sees lie ahead for the industry. Augmented is a podcast for leaders hosted by futures through an honor in hand, presented by Tulip dot co and Manufacturing app platform and associated with MSG works. The Manufacturing. 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 AM us Eastern time, every Wednesday, Augmented the industry 4.0 podcast.
[00:01:47] Rick, how are you today?
[00:01:48] Rick Bulotta, co-founder, Thingworx: [00:01:48] Good morning.
[00:01:50] Trond Arne Undheim, host (v): [00:01:50] Well, it's a nice morning. I wanted to talk to you about some history. Sure. Yeah. Well, you, you are a bit of a legend in this field. Uh, Rick, uh, right. You've been basically part of almost every development in this, in this field for, for several years. I wanted us to spend a little time today, not just going into kind of.
[00:02:11] Your history and background, uh, you know, as the founder of several startups that have, uh, you know, 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 know, you had a degree from Cornell and then you went on to, to, to fund several companies.
[00:02:35] Can you bring us back to those days when you were studying. And industrial engineering at Cornell. What was the environment then for, for Manufacturing into what was it that brought you into the thought that you would start, uh, engaging in, in sort of entrepreneurial software development in, in Manufacturing of all fields?
[00:02:55] Rick Bulotta, co-founder, Thingworx: [00:02:55] Just to be clear, I barely graduated. So I had asked a time in college, but, uh, so that, that was what I think we thought of engineers as mechanical engineers or chemical engineers, the physical, you know, physical aspects of making things, building things then in products. As opposed to, I think software and technology is kind of a, a nascent concept there at least certainly a Manufacturing.
[00:03:20] Um, but, uh, my, I actually switched degrees from mechanical engineering into operations research, kinda mid-stride there realizing that looking at pieces of broken metal under a microscope, just that wasn't for me. So, um, I graduated, my degree was in operations research and, um, I actually went, uh, my first, uh, position was at a steel, very progressive steel company called Lukin steel, um, doing essentially industrial engineering work.
[00:03:47] Um, however, this was what, 1985, uh, Dawn of the PC on, uh, of, uh, kind 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, kind of all the stuff that I studied, but never thought I'd actually practiced.
[00:04:11] Um, So I spent a lot of time in the local library, checking out software, uh, you know, take the disc home, learn, teach myself to code, um, an opportunity then opened up to go into steel plant operation. So I used to run, uh, a healed, he treating process. And that's one thing that a university degree won't prepare you for, you know, dust having 15 steelworkers working for you.
[00:04:36] 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. Um, but yeah, so that they were, um, I spent a few years in that role and then moved back over to an industrial computing group.
[00:04:57] Um, and we were applying at the time, very advanced technology, uh, mid may computers, user, very innovative user interfaces, high levels of automation to some of these processes back that the very site that I worked, um, and the very operations that I worked at was one of the first places for that. Um, 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.
[00:05:24] A company this crusty old steel company happened to be very, very, um, committed to investing in technology. And again, you know, it was a learning opportunity for me. Um, and then kind of, you know, across the years I moved into systems integration. I did some stuff and digital discrete Manufacturing. Um, I, uh, I had the opportunity again, you know, luck sometimes happens here to work for, uh, arguably the first, um, well-known company in the industrial software space company called Wonderware.
[00:05:58] Uh, first IPO in the space. Um, and I joined very early, which is kind of cool. Yeah. Give us a, I mean, the, 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 kind of how early wonder where it was. W what was the situation, you know, when you created your first product and why in your account.
[00:06:22] Trond Arne Undheim, host (v): [00:06:22] Yeah, has it become so emblematic of that early, early era? And what year are we talking about? Exactly when, when that sort of entered the stage with Wonderware?
[00:06:31] Rick Bulotta, co-founder, Thingworx: [00:06:31] So late 80s, early 90s, Wonderware came on to 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 kind of all the elements that help build a successful business: sales, marketing, technology...
[00:06:49] 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.
[00:07:09] So we're talking the way back machine, when Windows looked sorta 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 Andalusian, 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 have. What Dennis and Phil did was really twofold.
[00:07:40] And this, I think ties into a lot of the innovation we're seeing today is they democratize 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.
[00:07:59] You could build these incredible applications, like 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 built, but they're those process mimics with very dynamic graphics that represent the, you know, the physical world.
[00:08:15] I learned a lot during that period about the importance of two things. One is ease of use and just empowering others to build applications. Particularly in the manufacturing domain. Second was ironically the importance of marketing, right? 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.
[00:08:39] And the company grew rapidly to 5 million, 10 million, 15, 20, and on and on, and then IPO. But there wasn't anybody in the industry that didn't know the name. Go to a trade show. This is a company, to 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, so that's kind of the priorities were well balanced there, but just an extraordinary group of people to learn from. You know, I developed lifelong mentors and friends at that company that fast forward to, you know, my last company, I got some of those same people came and joined my team. So it was a complete honor to work with them again.
[00:09:21] Um, uh, so yeah, so back in those days, what was it that, where. Apart from the marketing side.
[00:09:29] And like you said, the menu menus and things, first of all, who, who was the target audience at this point? Was this still process engineers that were doing this or was it still the it department? I'm not sure. And was process engineers and that was the democratization. Right? Taking it out of that. Let's go back to my time in the steel industry.
[00:09:48] We were writing Fortran code PLM, we're writing code we're, uh, very, you know, creating database scale, all the kind of classic development processes. And it was part of a corporate it function. Now this is the shift to, to, 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.
[00:10:15] So historically they may have done the physical automation, the PLCs, the actuators, the sensing distributed control systems. Now that we're able to take on this role, um, to, to other things happen. Just prior to the advent of things like in Ellucian and wonder where that, that user experience was physical gauges and push buttons and things like that.
[00:10:39] And sliders, now it became digital. I mean, this was in a way, this is almost like magic at the time. Right? It's virtual reality. It was, it's like a lot of people the first time, never forget my mother. The first time she played solitaire on a PC. Yeah. And that virtual card dragging it was this utter magic.
[00:10:58] Right? Well, similar experience here, right. People were able to reproduce these and, 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. Were you, uh, were you all aware of how innovative you were?
[00:11:16] I mean, clearly the marketing department thought you were something special, but did you realize at the time how sort of. Timeless and etched into kind of Manufacturing history, wander, where it would become later. Were you aware of how far ahead this was? Or where are the customers telling you that clearly that's a great question.
[00:11:33] I think it was a combination of the above. We had an almost cult-like customer following, um, that was. Pretty unique. And it created a lot of energy that you knew you were doing something interesting, but we had very legitimate competitors who were also doing super cool stuff. Um, I think that another kind of life lesson here was a lot of companies create great products to bring great products to market at scale is a whole nother task, right?
[00:12:01] It's a whole nother challenge. And, um, 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, um, this technology that allowed us to achieve scale, um, pretty quickly.
[00:12:20] But, um, the customers were the primary feedback loop, right. We won all kinds of awards from the trade trade rags and all that kind of stuff. The, I de I definitely think it was the kinds of applications that the customers were building was certainly, you know, that's that, that always gives you energy.
[00:12:36] Right. When you see that,
[00:12:38] Trond Arne Undheim, host (v): [00:12:38] Rick, give me, uh, another sense of, as we're sort of moving to your next company, just J just bring us back to that time with the early years of where, what were some of the things that. Was challenging to, to you, you know, on, on the application side, then that today we would sort of laugh off the newest or just be like a line item.
[00:12:59] What were some of the things that were really complicated that you were so proud of having accomplished?
[00:13:04] Rick Bulotta, co-founder, Thingworx: [00:13:04] Well, let's, let's just take the obvious, which is, you know, sort of the inverse of Moore's law, right? We're if we turn the clock back that many years, we have half as much compute power every year. Um, And to have a very graphical, dynamic user experience.
[00:13:21] Um, 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, uh, which was the product at the time, but also windows itself. Right. It wasn't evolved. It wasn't mature. It certainly wasn't targeted at these kinds of mission, critical applications.
[00:13:42] So, um, those were the kind of things you had to work with. You had to make it robust, reliable, uh, and take advantage of, of very, very limited, you know, compute and visualization capability at the time, um, changed the modalities by wave people. Typically, you know, we were also all used to keyboards at the time.
[00:14:01] Now it's touch it's, it's a mouse, it's a different means of interaction. And then how do you bring that to literacy challenges? Like. Uh, I'm a task worker down on the floor and protective equipment and gloves. And how do I interact with that? Right. So all kinds of creative stuff that just to try and bring a whole new modality of human interaction to a pretty demanding segment.
[00:14:26] Trond Arne Undheim, Host: [00:14:26] So what then happened to you? What happened around you leaving Wonderware and moving on to kind of next challenges? Cause you've also had a foray in sort of larger companies, but then you immediately went back to the startup world. Give me a sense of what was your thinking then?
[00:14:40] Rick Bulotta, co-founder, Thingworx: [00:14:40] Sure. So there was a little detour as there often are in our careers. 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 really involved in.
[00:14:57] So that was another learning experience for me. Then I saw this opportunity at a level above the Wonderwares of the world or the OSIsofts of the world. Of all of these kinds of operational systems that we had. They were islands, right? No one had that holistic view. A supervisor , an operator , quality -
[00:15:17] No one was sharing information. And, so the kind of light bulb went off. This is actually about when the web technologies were starting to get a little traction, the browser, right. The Netscape effect , ubiquitous TCP/ IP connectivity, ethernet, and the plants. So, that's when the light bulb went off.
[00:15:36] 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 name.
[00:15:58] It was called the plan information portal. That was another cool word at the time. Right. Portals. So that was the objective there. This kind of unified visibility. I started the company with some colleagues that I knew from Wonderware and, you know, we built I think something pretty groundbreaking there.
[00:16:15] And the situation then was there was this need for almost like an information service , it was almost like an early portal for the industry in a sense. Yeah. And I think what we found that the unique thing about the industrial space, I like to say that everything's legacy, the moment it gets put in, right.
[00:16:34] Everything had proprietary APIs and interfaces and protocols. Yeah, my approach has always been solve hard problems because you're gonna have fewer competitors and the value's there. Right. So we tried to solve a pretty hard problem. All these, like, you know, all these different, crazy systems that were scattered around.
[00:16:56] Yeah, so that's really what the objective was, is initially unified visibility. But then when we realized, if people can see that information, why can't other systems? So it became, it rapidly progressed from just being empowering people with information to empower another line 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. Well, because, because the point was there that you started discovering the importance of standards, right. And, you know, there were standards at that time, but they were very basic web standards. And you, you started realizing that.
[00:17:37] And even in the side of the industry or field, you you'll have to start depending on that. Is, is that also what got you kind of involved in a, in kind of the intersection of interoperability and also open sourcing, uh, certain, uh, types of, of software. We were actively involved in a lot of open source projects.
[00:17:55] I think that I was also early in the open source world. So, if you, if something was broken, no one was gonna fix it for you, you fix it. Right. Uh, so, you know, if you want to leverage and get value out of open source, you better be prepared to give back. So as a company, we, we definitely gave back to a lot of interesting projects that became part of the, the light hammer stack.
[00:18:19] Um, the other thing that I think is important to understand is know. Pattern this pattern repeats itself in my career is, is building tools, not applications. Right? My goal was always empower people to build interesting stuff there. They've got the ideas, they've got the, you know, the, the, uh, um, innovate, the innovations living inside them.
[00:18:43] 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 kind of a Wonderware stuff, We were implementing the light hammer thing works. And nowadays with solutions like Tulip, it really was all about that. Take down friction and power.
[00:19:03] Uh, non-technical people to be innovators and do it fast. Then, then you, you got on that SAP's radar. Tell me a little bit about that. Not necessarily, you know, your experience there per se, but just kind of the, the difference for you in having a straddle. Know, a startup guy gets on the radar of a large company.
[00:19:22] And now you're working in a large company. What's the situation there? What, what is their understanding of the shop floor and, and how, how does that all work? Because it gets more complicated when you're in that kind of a, of a software environment. I think SAP was a very good place to be for a number of reasons.
[00:19:38] Um, SAP was dominant in the manufacturing vertical, right? In terms of customer Manufacturing customers. The vast majority of them ran SAP for their back office systems SAP had solutions kind of light solutions for the Manufacturing domain. But, um, a desire to go deeper. Um, secondly, they were launching a, um, uh, really kind of a partner ecosystem at the time, wanting to prove that in fact partners are integral part to, to, you know, to their offerings.
[00:20:13] Um, so we were able to kind of get that visibility. But also we started stealing some revenue. So when you start kind of customers, you start taking customer spend, instead of upgrading that, that module in my ERP system, I'm going to spend a couple hundred thousand dollars in my plant floor. That gets you on the radar too.
[00:20:32] Hmm. Um, interesting side note. 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, um, you know, blue collar. I hate the term blue collar task work, or, you know, frontline workers, so to speak, but that's got a new meaning nowadays.
[00:20:55] Um, as, as opposed to back office, secondly, we had something that not only had a life, a user license for each, um, Manufacturing, uh, worker, but also a per, uh, Manufacturing site costs. So think about comparing, selling something to the CFO's office. That'll run in a data center. The scale and size of the deals were pretty substantial and there was real value being created.
[00:21:19] So I think in the first year our sales grew like, no. 800%, 900% from a pretty good base, having that ready base of Manufacturing customers to sell into a global company with a global sales and support presence. It's pretty easy to get traction there, but then you, you had a stint back at Wonderware, right before you went on to, to found a new company.
[00:21:43] W w what was that like? So you came back then and now kind of almost running the show, I guess. I wonder where for a little bit. Not, not really, because I think the company, this was an interesting dynamic, the company we had grown substantially by that point. So from, I don't know, 60 people when I first, my first experience to probably 800 at that point, um, I was a remote remote CTO, which was had, this was long before remote work was the thing.
[00:22:11] Uh, so that was, it was extremely challenging. Um, and I th I just think it was the, those dynamics kind of made it, um, Uh, probably not as effective as I could be that said, you know, a lot of what we were, um, Some work that I had done in SAP research is what kind of led to the ideas behind Thingworks. And I actually think to be blunt, I think wonder where at the time could have realized those pretty, pretty well.
[00:22:38] They could have collectively, we could have brought that product to market probably faster. What became Thingworks. 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. How did that happen?
[00:22:55] Because at this point you're not new to startups and you have had a taste of the corporate world, you know, in fact, in sort of 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. Part of it is you feel like you cheated on the test, right?
[00:23:13] You kind of you've, you've got the scars, you've got the you've you've had the lessons learned. Um, I think we had a pretty well bounded 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, uh, you know, uh, Hey, we're gonna do some R and D.
[00:23:34] Secondly, uh, my, you know, my business partners at light hammer where my business partners at Thingworks common investors, um, and, uh, and some, some new folks that I work with at Wonderware joined the team. It was sort of, I'm not gonna say we couldn't fail. There's a lot of things we could have done wrong, but we had an incredible team of people.
[00:23:55] With a lot of experience building companies like this selling software like this, um, I had a pretty good feeling that, you know, we were on the right track there and what exactly was Thingworks in the Indy early days, because you know, you read things like machine to machine, and those are terms that only much later, I didn't, you know, today we call things, call it internet of things, but you guys were very, very early, honestly, in, in, in that domain to produce products.
[00:24:23] In that space when most people were just starting, you know, machine and machine didn't mean anything, two people back then. 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, just the, the value nexus is just massive.
[00:24:49] Right? Any one of those kinds of taken in isolation, any or the connections between them? Yeah. There's 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, you know, getting updates down to an MRI machine or whatever.
[00:25:07] But we tried to go beyond that. We also realized early on what we, the classic issue. It's good to know what you don't know. And, um, remote access over unreliable links and all that stuff was something, you know, we've been, we've lived. My team had primarily lived in what we would jokingly call the internet of things.
[00:25:27] Right. Everything's on the local network. Um, you know, different considerations, right? So we acquired a company and a couple of 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 kind of, that was this, the second wave of rocket fuel to get things gone.
[00:25:47] Um, that's interesting. You said that because I think the temptation for many would be, you know, you're so far ahead and you start building things and you're, you're building things in the future. But that, I mean, surely, you know, the reality is the shop floor and other things, and you're dealing with poor internet connections, you know, forget skills.
[00:26:04] I mean, you're actually dealing with, with a network that, that doesn't scale to your idea. Exactly right. And you know, it it's, it was a very interesting balance between I oversimplify it kind of that industrial IOT is kind of smart, connected operations and things like that. So factories, power, power plants, and then connected fleets of stuff, trucks, MRI machines, uh, light towers and cities.
[00:26:32] Radically different requirements. No, one's 99%, 98% on prem one's 99.9% cloud ones. Uh, intermittent, unreliable, expensive connectivity ones, you know, uh, reliable. Isolate both to have we built a platform to serve both of those tasks. In retrospect, we probably make compromises along the way to accommodate that.
[00:26:57] But still today, I think, um, you know, PTCs revenue with Thingworks is, is fairly well split between those two domains. Um, But that, that was an interesting challenge on its own because the requirements were dramatically different. But again, you, you got acquired. So is this a pattern in your companies or is it more a pattern in the field that, you know, at a certain point.
[00:27:20] Because, I mean, I I'm making this up here, but maybe is there something about the industry itself that lends itself where very easily to, you know, just in order to get that scale, you sort of have to be acquired. I mean, it's very desirable or is it more a choice that you each time made to say, you know, we've built it to a certain scale.
[00:27:39] I think in our, our segment, um, you know, there are, there are the rare few that will, that an IPO track makes sense and it's achievable. Uh, I think for the most part companies in our domain are they're talking to in acquisitions to, you know, to technology companies, cloud companies, enterprise app companies, industrial automation companies.
[00:28:01] So they have the luxury of, you know, we can be the innovation engine. It doesn't have to come off. Maybe if you think about a big co. Wants to build something organically, every dollar they submit. First of all, they're typically, you know, 10 to 20 times and I, I it's just reality, less efficient in developing software for variety of reasons.
[00:28:21] And that money comes off the bottom line. So it's, it's, it's actually an interesting dynamic that it's almost more attractive for them as well. But the thing works, story is super interesting in the sense that, um, I told us someone the other day. So Jim Heppelmann supervision, Arie right there. He, he had this, this concept of the digital twin and IOT with connected with products, um, way back.
[00:28:46] And he actually took some of his best and brightest people. His CTO number of other people moved them out of their office, put them in the, uh, innovation, Cambridge innovation center and said, Go create something well, along the way, we got introduced to that team. Um, and they came to the conclusion that, Hey, it's going to be faster, cheaper.
[00:29:09] Uh, we can get to market capture mind, share quicker through acquisition. If you think about it, that's a very immature is not the right word. Um, I don't even know what the word I'm looking for here, but it's, uh, You're you've just been given an opportunity to, to intrepreneur right. You've got a clean sheet of paper, all the fun stuff after, you know, grinding out your day job for, for years and you make that decision to, well, you know, we're not going to do that.
[00:29:36] We're going to go buy a company cause I have huge respect for that. And it turned out to be a very good decision for everyone involved. Um, But, uh, so that's actually how that happened. We were, uh, an intrepreneur during effort at a addict, you know, at a relatively large company, decided to go and become acquisitive instead.
[00:29:57] And, uh, that's worked out quite well.
[00:30:00] Trond Arne Undheim, host (v): [00:30:00] So we haven't talked so much about, uh, the surrounding companies, uh, you know, throughout these years, but, you know, were there other companies doing innovative things? You know, I, I'm not so familiar with the history of all of the, kind of less successful or less visible Manufacturing it companies throughout the late.
[00:30:20] Rick Bulotta, co-founder, Thingworx: [00:30:20] Uh, you know, the early nineties, what were, 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 where they're smaller acquisitions that, that go into this history? Yeah, actually a lot that we're doing it. Right. Um, you know, it was a big enough pie that, uh, the gorilla, you know, in the, in the segment might only have a 27% market share.
[00:30:42] So it was, it was still fairly fragmented. It's partially because of geography, um, 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 wonder where and light hammer was the data side of it.
[00:30:59] Right? So that's the historian companies. Greatest example of that is, you know, recently the acquisition of OSI soft by amoeba for $5 billion, biggest little company you never heard of. Right. I mean, just a fantastic success story. They stuck to what they did very well and built, uh, you know, essentially a dominant market position.
[00:31:22] They had competitors with good products as well. But, um, I mean, they're, they're one of those success stories in that space. That's only visible to most people now. Um, we had, you know, we had competitors in almost every, every company I've ever worked at that had great solutions, but this is again where I think the, the, uh, X-Factor stuff comes into play.
[00:31:44] How you, uh, you're, you're a go to market machine. Um, the passion that your team had and people have it's contagious, right? If people really believe and they interact with customers and partners, it's, it's just magic. The second thing was, um, again, that, you know, the, where you're really doing useful stuff for customers, um, Some companies were software companies.
[00:32:10] Some companies were really just integration companies with a masquerading as software companies. Uh, but w there Trond, you know, this, there's no shortage of bright people on this planet and it's, uh,
[00:32:23] Trond Arne Undheim, host (v): [00:32:23] well, sure. There's no shortage of bright people, but I guess this is kind of the third segment that I wanted us to get into.
[00:32:28] You. You kind of have a third career now, which is this portfolio life, I guess. I mean, you could characterize it yourself, but I don't know how to explain it otherwise, where you're seeing. First of all a, a number of companies and a maturity, I guess, in the space, that's a little different, but you are in a different stage in your career.
[00:32:46] And I want to eventually get to Tulip and discuss kind of why, why you got involved with that. But, but first maybe you can address sort of this portfolio things that you're doing right now, obviously mentoring a lot more and getting involved on the board side. How do you see the last sort of even just the last five years?
[00:33:03] What what's happening right now? What, where are we right now with Manufacturing software? So generically, I would say it's, I'm doing Manufacturing and adjacent stuff, kind of IOT industrial. Um, I'm so excited that it's cool again, right? Cause it was for two decades, right? Well, you were never concerned about that.
[00:33:24] Surely it was right.
[00:33:26]Rick Bulotta, co-founder, Thingworx: [00:33:26] But you know, well, what's the old man in the land of the blind, the one-eyed man is King. So if you were cool within your segment, right, you didn't have to be that great. And you could. Um, underselling what, what we achieved at the different companies, but, um, I think, uh, it really has visibility now there's investment money flowing into it.
[00:33:45] I think the increasing importance of, uh, we kind of hit that little productivity inflection point where it started to flatten out, you know, people are investing in technology, uh, the challenges around people, you know, there's just not a lot of know-how. Uh, or there's much less know-how about everything from manufacturing operations to the different tasks that get performed to the technologies.
[00:34:10] So how do we offset that? So technology starting to fill an increasingly important role of focused VCs and focused investors and focused, uh, uh, 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 built from just get better and better and better, right.
[00:34:33] Someone that wants to add, you know, AI capabilities to their solution today. It's, it's just, it's never been easier. Right? I want to add vision. Oh, you know, now what you do with it is very, can be very differentiating. But my point is that the building blocks we have today are just better than ever. Um, I think the challenge what's changed maybe in a negative, I think the way you get to customers.
[00:34:58] Uh, to get to market has, has changed and it become more challenging. A simple example. If you think about, you know, 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 SAS and subscription world.
[00:35:20] In essence, we're all in the financing business. We're financing, our cost of sales, our R and D. So the capital requirements for companies in our segment are bigger than they ever have been. Um, and we see that with some of the, some of the res raises, but that's just a reality it's that, that dynamic perhaps you've been gets, gets, uh, ignored sometimes, but it is a big change.
[00:35:41] Um, yeah. And then, you know, just, uh, to the Tulip. So I think it was actually indirectly through Wonderware if I recall. So, uh, the Tom and team and Ronnie and team were looking around at comparables, what are some companies that have been successful, kind of growing a business in this space. Um, and, uh, you know, he kind of had the hit list of Wonderware folks that he wanted to talk to.
[00:36:08] And some were somehow I don't recall the exact moment, but we connected up. And, uh, I got it. I got it. When he explained what they were doing, the light bulb went off. I said, I'd love to be part of this. So I'm both an investor and advisor in the company. Um, and also water, just that I gel, I love smart people, like innovative people and there's no shortage of those in Natan's team.
[00:36:34] So, uh, kind of first visit there, see what they were doing, meeting the team. It was like, All right. There's something going on here.
[00:36:41] Trond Arne Undheim, host (v): [00:36:41] So tell me, so tell me what it is that you saw, because I was also, you know, I was at MIT at the time when Natan created the company and I remember vividly going into the lab or, you know, whatever you want to describe his early workspace, because that's, that's what it was.
[00:36:56] Right. It felt like a lab, but, but the stuff that was coming out. W w was, it was incredible. What do you think? Was it the product vision, or was it just the capability of the people, uh, that you, that you saw early on and kind of now that you're sort of looking at what Tulip and it's. You know, honestly, environment, right?
[00:37:18] What, what is being a accomplished right now? Would you say with this new app reality?
[00:37:24] Rick Bulotta, co-founder, Thingworx: [00:37:24] I think it was the aggregate of all of the above. That really cause great example. Right? The first, if you recall the kind of first demo scenario with the mixed reality projecting instructions onto the work, I was crazy that that demo was for me the demo of all demos, you know, in the absolutely.
[00:37:41] And I said taking a very fresh look at, uh, at, uh, At a problem here at an ad, obviously with their collected backgrounds, really interesting mix of skillsets, they're going to do cool stuff. Um, and I think the John and team would be the first submit they were coming in with not a lot of domain knowledge, right.
[00:38:01] They had been involved in companies that made stuff, but. A lot of the, you know, there was a, there was a learning curve for sure. And that's what, you know, a lot of the, not just myself, but they had a lot of advisors, customer feedback, um, brought in some folks into the team and then just learning kind of on the job training, right.
[00:38:18] 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, of the shop floor? Not that they didn't have a good idea at the beginning, but. Once that kind of confluence of smart people, customers starting to do cool stuff with it.
[00:38:38] Um, and, and, and the product itself evolving. And then that's kind of one of the rocket. No, the rocket took off. Well, this is interesting what you're saying here, because. I, as I'm interviewing a lot of people who have innovated in this space the time and again, right. What comes back is this is not just your average software innovation garage, right?
[00:38:59] Y you know, a lab is not a garage, right? 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.
[00:39:17] Why? Because you have had it ingrained. Like we talked about this a few minutes ago, you started out that way, but, but there's 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. I wish they would. All, you know, everybody wants to get in this space needs to do.
[00:39:36] If, if like the equivalent of in, uh, law enforcement would be a ride along, right. You go, you go spend and spend a couple of nights work in the streets. You realize how things really work. Right. It's not like TV, it's not like reading, reading your textbooks. Um, so there's no substitute for, even if it's like super concentrated real-world experience, actually going out and spending some time with customers.
[00:40:01] Uh, you know, real-world experience, but I also think it's the third leg of the stool, which is important, right? It's the technology expertise and creating products is Manufacturing, domain knowledge, and then figuring out how to get it in front of customers and sell it that we can never underestimate the importance of that.
[00:40:19] So that's another thing that I think Tulip was took a lot of, uh, very iterative and AB testing approaches. To go to market models, right. And they continue to innovate experiment. Um, it's a challenging space to do low touch, but they've, 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.
[00:40:42] Wow. That's pretty awesome. Um, 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, um, a couple of key hires, for example, I think one great example is the hires they made in pharmaceutical industry.
[00:41:02] Right? So life sciences now is become a. Really, really powerful vertical for Tulip as a result of bringing in some Dianne expertise, plus the evolution of the product from kind of a plant foreman tooling and some hardware, two applications. So the app app marketplace that they launched, um, now when I'm a buyer.
[00:41:23] You can approach, not only that developer buyer, that integrator buyer, but now you can approach a business buyer and say, I've got, you know, all these apps you can assemble together or just use kind of as is that was also a maturity thing, right? So it took the domain knowledge interaction with customers, and then you can progress a really build more into the software itself unless that the customer has to configure that maturation is, has been pretty exciting to see.
[00:41:48] Trond Arne Undheim, host (v): [00:41:48] Rick with, we've been through a history here. That's very, very exciting to me. And I think to, to, to listeners, what's, what's next for the digital factory for the manufacturing execution systems, all these acronyms that I try to shy away from them a little bit, because we had so many. Many other interesting things to talk about today, but, but if you're looking to the next decade, the Holy grail you mentioned, or, or this like final integration project that would, I guess, marry software, hardware, shop floor, and considering all the challenges that the just the past a year has brought us, and let's not even bring into it.
[00:42:24] All of the other challenges of this. Decade. And I know this century, you know, if you're going to go into the big words, right? Where are we headed?
[00:42:34] Well, maybe focus on where I hope we had, uh, which is a look perhaps a little bit different. Um, I, I started the discussion that with one of the things that I learned in my first job, working in the plant flow is the importance of people.
[00:42:49] Uh, 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, right? Like it or not. I think that we haven't yet reproduced the human hand. Uh, we haven't yet reproduced the human brain. There's some really unique things about humans.
[00:43:09] 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, um, and you know, there is, there's always a risk of dehumanization in something like that, right. Where people become interchangeable and like they Don their, their Ironman assembly suit and they, you know, but, um, But I'm, I'm maybe take a more optimistic view that it's really we're, we're gonna continue to increase productivity and output, but there's so many roles like that that could benefit from the synthesis of all these cool technologies that we have.
[00:43:50] 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. Um, I'm hoping, and I'm confident that the, the bar to implement these things become increasingly lower.
[00:44:09] AR is a great example today. It's hard. It's building content is time consuming and difficult. So maybe that's the next one that needs to mix, you know, bring the content creation to mix reality down next, gen robotics, Coco bots, and some really interesting stuff happening there. The democratization of machine, vision, and audio and meta sensing that's happening.
[00:44:31] Um, so, but it's interesting, you're saying there still are building blocks and there still are collaboration challenges,. And maybe those collaboration challenges are going to have to last longer than, than a decade to, and may, may maybe we need more building blocks, but what comes after that? Once it critical, massive building blocks.
[00:44:48] Uh, get, get assembled and you have watched this, you know, decade by decade that there's a certain coalescence, so building blocks and then a new platform is formed. Okay. But, 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?
[00:45:14] 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 kind of their own new creation, whatever iteration of the Manufacturing industry that would become.
[00:45:33] Rick Bulotta, co-founder, Thingworx: [00:45:33] And, and I don't know if it's going to be necessarily the suppliers that become the mega innovators in a perfect what, what may well happen, uh, is that. It, the manufacturers themselves start to become, because the tools have become so powerful that they become the Mega. If you look, if you actually take a deep dive into a lot of really innovative manufacturing companies, Um, 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.
[00:46:06] Now, sometimes suppliers can provide some of that equipment. Um, so maybe this is just an amplifier for that. And the second thing is I, you know, I know it's coming, is this massive disintermediation of Manufacturing, right? So we already have companies where the brand owner. Contracts the design of the product.
[00:46:25] It contracts people to make the product, the contracts, people to service the product and sell the product. So they're literally just the brand name on top of it. Now you, you matrix that right? Where you have companies with very, very flexible manufacturing capacity, other than it's additive or traditional, you know, who knows?
[00:46:44] Right. But I think w w uh, manufacturing, supply chain. 10 20 years now, it's going to look radically different. Not fewer companies will be making stuff on their own, but the companies that are making stuff will be really applying some innovative technology to, to be flexible. Versatile. That's never going to happen for kind of grunt commodity stuff where the costs, you know, Cost of produce matters.
[00:47:09] You do purpose-built but, um, increasingly look at the proliferation rate on new product introductions and all electronic products and you know, so many different things in our lives clothing. Right? There's so many things that could, we could innovate faster. If the Manufacturing systems themselves could adapt faster, maybe that's an outcome
[00:47:29] Trond Arne Undheim, host (v): [00:47:29] that well, I mean, whichever of these scenarios, pan pan out, it seems to me that at least segments of this industry, if, if it remains, you know, if you can talk about it as one industry anymore is going to be super exciting.
[00:47:42] So that brings me, I guess, to just start my closing question. If you were to advise a young person today who is maybe they're thinking about college or they're, they're, they're thinking about, you know, should I, should I follow my passion, which happens to be kind of actually, you know, going and making and doing, uh, building things or should I get a theoretical education or is that a false choice and where should they go today?
[00:48:08] You know, there's like this dichotomy between the, you know, getting a four year education versus just going and getting some skills. So that. Like we have been talking about, so you have some inkling of what you actually need to be, uh, to understand in order to produce the innovation.
[00:48:24] Rick Bulotta, co-founder, Thingworx: [00:48:24] I think all of the above.
[00:48:25] And let me elaborate on that a little bit. My, um, uh, when I was, when I was in university, I created my own co-ops two summers. So I worked, you know, I sought them out. My son's at Drexel university now, and a co-op program is an integral part of, of his education there. Um, for a lot of books, getting exposed kids, particularly exposed to.
[00:48:45] Um, 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. Right? Um, it helps you get that real world experience and, you know, just interacting with people.
[00:49:03] But, so I think that aspect of it and your university education doing, um, a diverse and interesting set of co-ops. Would be very valuable, a liberal arts. I think, you know, having a, a liberal arts aspect to any tech, technical, uh, education or focus skills, education is still valid. You have to know how to read, write, speak, uh, uh, you know, those kinds of things, design is ever increasingly important.
[00:49:28] You know, the, these, the polymath is going to be a, you know, a great skill to have. Um, secondly, uh, you, you. Learning has never been easier, right? You 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, you know, if there was no other option, you know, 60% chance that patient would live, but that's, we have so many different resources.
[00:49:57] I'm a believer in lifelong learning. So it's not a static thing. Um, certainly have a highly specialized skill. If you're going to be a geneticists doing CRISPR, whatever. Yeah. You need to spend eight, 10 years of, of, uh, true rigorous study to be, to master a lot of that kind of stuff. I'm maybe not, maybe that's even getting easier.
[00:50:19] Trond Arne Undheim, host (v): [00:50:19] Rick ... 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, and you know, it's incredible how one week. Because you have an edit into my mind. I don't think about it every time. And I haven't thought about it for years, but what you were just describing with like seeking out these internships, it brought it all back to me.
[00:50:43] And I can almost remember though how the Monday was different from the Tuesday rotation. What I went through out that Institute, there is just no. Comparison to that kind of real life experience.
[00:50:55] Rick Bulotta, co-founder, Thingworx: [00:50:55] The other advice that I give any, any, uh, any person is a versatile set of skills, right? Do a sales role sometime in your life.
[00:51:04] You might hate it. You might despise it, but you're going to learn what the salespeople in your company go through. Right? You might love it. And it becomes a career, um, you know, communications, what are your marketing folks have having a diverse set of skills, uh, and, and getting exposure to that. Maybe it happened accidentally for me, just those were the opportunities that presented themselves.
[00:51:26] But I think that's having that diverse skill set and toolbox is extremely valuable. Particularly if you want to start a company,
[00:51:34] Trond Arne Undheim, host (v): [00:51:34] Rick, I thank you so much. We have gone way over what I had promised and even my promise to them, to our listeners to be very succinct. But this has been for me, at least a fascinating roller coaster through your career and throughout.
[00:51:47] Uh, Manufacturing, both history and future. I thank you very, very much. My pleasure. You have just listened to episode 10 of the Augmented podcast with hosts thrown on it. Undheim the topic was a brief history of Manufacturing software. Our guest was Rick blada partner at twin thread and co-founder of MFG.works in this conversation.
[00:52:08] We talked about how Rick has shaped Manufacturing software. The lessons learned from being an early employee at Wonderware, the famous precursor to Manufacturing automation back in 1993, the company first sold. Engineering giant. CBET in 1998, which merged with ETR to Forum Invensys, which in turn merged with flat French, multinational, Schneider electric, and leader, the CTO, Rick blotter was also the co under a light hammer software, which was later acquired by SAP.
[00:52:39] Then in 2009, founding thing worse, the first complete end-to-end technology platform designed for the industrial internet of things, which was acquired by PTC in 2003. We also touched on his current advice to founders in industrial space is board role at Chile. And what he sees lay ahead for the industry.
[00:53:01] My takeaway is that wonder Wonderware light hammer Thingworks, I've prominent parts of Manufacturing, software history, and there's a chance that the fourth company he now is involved with Tulip also will be. I do things with things is Rick motto the things he does. He does them well. And it is an internet of things.
[00:53:21] More than that. Anything else I, for one and eagerly listening to what he predicts will happen next. Thanks for listening. If you liked the show, subscribe at Augmented podcast.co or in your preferred podcast player and rate us with five stars. If you liked this episode, you might also like episode four, the Renaissance of Manufacturing or episode five, plug and play industrial tech, Augmented industry 4.0 podcast.
Rick is an active mentor, advisor and investor in areas as diverse as IoT, robotics, AI, digital and additive manufacturing, and a recognized expert on the Internet of Things and advanced manufacturing, with a unique perspective from his previous roles in plant operations, sales, product marketing, systems integration and technology.
Rick was the CTO and co-founder of the world’s first platform for creating connected IoT applications, ThingWorx, which was acquired by PTC in 2013. Rick was previously CTO at Invensys Wonderware, a leading global provider of manufacturing operations software solutions, and was a vice president with SAP Research in the areas of future manufacturing and the “internet of things”. Rick was also the CTO and co-founder of Lighthammer Software Development, where he was responsible for conceptualization and development of innovative web-based and service-enabled software products targeted at the manufacturing industry.
At Lighthammer, Bullotta identified and created a new market segment for “manufacturing intelligence and integration” software. He has contributed to a number of industry standards efforts and open source software projects. Rick has been involved in the industrial sector in diverse roles, including factory operations and management, systems integration, sales and marketing, product management, and industrial engineering. He holds a degree in operations research and industrial engineering from Cornell University.