While GE Digital’s struggles with IoT services generated headlines, one company quietly executed on digital transformation. That company? Honeywell. In recent years, the legendary industrial manufacturer has evolved into an industrial software and services company. Last year the company launched Honeywell Forge, an Enterprise Performance Management software, that provides insights to operators of buildings, airlines, industrial facilities, and other infrastructure. As Chief Commercial Officer for Honeywell Connected Enterprise, Usman Shuja has broad responsibilities to accelerate growth for Honeywell Forge and transform Honeywell into an industrial software company.
Hi Usman. While most of us are pretty familiar with Honeywell, can you give us some background on Honeywell Forge? Sure. It’s an amazing time to be in IoT right now. Honeywell Forge is being built on the premise that the entire physical world is going to be connected. It will be constantly communicating with itself and its surroundings, and it will be continuously learning and iterating. What’s more, someday, fairly soon, we’ll be able to manage portfolios — planes, buildings, plants, and people — remotely. That’s the big vision. That’s why we are building Honeywell Forge — to enable our customers to achieve this vision.
I’ve heard your CEO Darius Adamczyk talk about how Honeywell is a “software-industrial” company now. In the past, that would probably seem like a contradiction in terms. But after listening to you, it makes a lot of sense. That is the vision and we have made significant strides towards that vision. We are targeting 20% growth of our software sales for the foreseeable future. But you can’t have that vision without execution, right? And Honeywell Forge is what makes that vision a reality. It’s the key enabling technology behind all of our IoT and digital transformation offerings. It’s the backbone for that transformation to embed software in all industrial assets, processes and people for Honeywell and its customers. Honeywell Forge is the software that enables us to build data applications for the industrial, aerospace, and real estate industries.
Honeywell is a huge, legendary industrial manufacturer. Were there any organizational or systems challenges in building Honeywell Forge, which is closer akin to a SaaS startup? There are challenges but getting a green light for actions for transformation has never been a problem. Recurring revenue and transformation into an industrial software company is a strategic imperative hence there is a lot of support from the leadership. As a matter of fact, the creation of Honeywell Forge provides a glimpse into the momentum and conviction with which Honeywell moves to make this ‘startup’ work. After presenting our vision, the board spent just one day reviewing the proposal and said yes. We formed and operationalized a new team focused on building software in under two months. Since then, we have made a conscious effort to cultivate an entrepreneurial DNA with 50% of Honeywell Forge leadership having software and startup experience including myself and Que Dallara.
We work with a lot of industrial manufacturers who are launching IoT platforms, and Honeywell seems to have done a really good job of avoiding the mistakes of others. In other words, you guys seem to be doing it right. For example, you seem to have found a good balance between having autonomy and being able to leverage the resources of your parent company. Yes. On that note, we’re allowed to sell outside the Honeywell portfolio, which might surprise some people. If you have connected products or a vision for digital transformation, we want to work with you. In the case of smart buildings, for example, we work really well with customers that have a Siemens or JCI install base.
So technically you guys sell to your competitors. Was that a difficult decision for Honeywell to make? There was a little cultural pushback at first and it was not a popular decision. But it was a pretty straightforward decision from an analytic point of view. Why limit our ability to serve our customers? One of our guiding principles was that we had to be independent and neutral.
I’ve seen other IoT launches focus on platform first, applications later. The assumption is that the customer will buy the platform, then make applications on their own. You guys don’t do that. You make scalable applications. Why? We wanted to lead with the customer’s wants and needs, not our product. You see people making that mistake all the time, right? It’s the difference between a service mindset and a product mindset. We are working with operational folks with real immediate concerns, so that’s what you should be focusing on. We helped a university in Dubai cut their energy consumption by 10%. We helped a steel manufacturer reduce stoppages by 90%. We helped a gas station chain in Chile standardize their repair operations. The list goes on. And this is where collaboration with the parent company is imperative. We’re constantly talking with customers and other business units to find the best problems to solve and encode our domain knowledge into software applications.
On that note, what does your sales team look like? I see a lot of Industrial IoT companies come out with a great new product, but with no distribution channel it just languishes. I agree completely. We’ve got about 350 people focused on just selling Honeywell Forge right now. We’re trained and incentivized so that there’s no conflict with the rest of Honeywell. It helps that software sales are just very different from what most of the rest of the company does. In certain cases, we follow “big Honeywell,” in certain cases we lead. So we have an overlay model as well as hunters who go on their own. At the end of the day our mandate is to build a recurring revenue stream for Honeywell. And in order to do that, you need partnerships. So that’s another very important aspect of our go-to-market.
Three hundred and fifty reps, wow! That’s more than most standalone SaaS companies. What else do you think you guys are doing right? Well, we’re staying very humble and managing customer expectations. We’ve seen a lot of companies get way ahead of themselves with their messaging. When you talk to operations people, for example, they’ll say AI is great, but only if it helps me increase my efficiency. We’ve also been very conscious about our identity within Honeywell. When some industrial companies built their digital arms, they acted kind of like the Bay Area cool kids.
I remember that commercial that GE ran, with the cool programmer guy with the glasses. Right. And in terms of culture, that creates an us versus them mentality. We’re all about making Honeywell stronger, not trying to discount this company’s amazing history of industrial innovation instead build upon it. That’s the only way we’ll succeed.
Great. Lastly, you must have a really unique perspective on the COVID crisis. Honeywell has built this vast portfolio of physical assets that are constantly monitoring their own surroundings. What have you learned over the last six months? Sure. The whole crisis has flipped some basic paradigms about work and safety in really interesting ways. For instance, you normally associate field operators with on-site work that is potentially dangerous and limited remote productivity while knowledge workers with high remote productivity and no safety concerns. But now that whole dynamic has flipped. Today we have plant managers who are basically running their factories remotely, sometimes just with their phones, and knowledge workers returning to potentially hazardous work environments. That’s why we have all these smart building analytic platforms that are giving employers information about foot traffic, air quality, energy usage and providing a safer experience for the occupants. Customers and users can monitor all the activity so that it’s done responsibly and safely. In short, COVID has really accelerated the agenda of “remote operations” and “safer occupant experience.”
That’s amazing. If the first wave of connectivity was essentially just a digital phenomenon, the second wave is all about the physical world around us. The advent of IoT and autonomous control is going to be as consequential (if not more so) than the advent of the web. And you’ll be able to subscribe to it all!
Amen, brother. Thanks so much for your time, Usman. Thank you.
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