Please enter your username or email address. Not only in helping us continue to evolve and improve the value that we're providing to customers and help them really believe in what they're doing. And so within this system of record making that actionable requires us to provide intelligence within that system. Resideo Technologies And so we have a solution. Okay. the fusion of those efforts into the customers larger digital-transformation initiatives. Lost your password? S&P 500 But you can think about the extensive nature by which that could, that quality management layer can be applicable across other verticals. if (perfEntries[0].type === "back_forward") { We may solve a very siloed nature problem. And as I think everyone has seen over the past few years, there's been quite a bit of M&A type of activity. } So we're super excited about that. You know, I come to Connect Enterprise with 20 years of software experience and I feel like the junior person on campus at times if you will. We need to be transparent. So within our HCE structure, we have a direct sales force. And Mike has a presentation, and he'll go over slides and then we'll go into the fireside chat format. if(redirect_url.indexOf('?') This is a great segue into my next question. You can blame, Verizon for that. Yes. And I think Bank of America does have a very unique approach to industrial software and automation. And so then that culminates in, you know, why we win and why it matters. And of course this is all in the back of Honeywell being a leader in the industrial space as Andrew highlighted in his opening. So, we'll start with that. And so and the replenishment, if you will or refresh of that asset base, and that's led to actually over time, even though you have different OEMs running on different standards it's not as siloed, maybe as it once was. And so, as I mentioned in the initial problem set statements - being able to do that in an efficient manner that allows workers to use real time data to make decisions, to handle predictive maintenance issues, things like that. And Mike has a presentation, and he'll go over slides and then we'll go into the fireside chat format. That would further a transformation effort that was already under way in 2018, when Honeywell spun out And that could be standardizing equipment that could be putting camera sensors in place to look at predictive maintenance on a factory line that could be highly monitor security and how looking at entry points and as highlighted by the type of your conference on internet of things that the massive amount of endpoints that are being created every day only makes this challenge more complex. if(redirect_url.indexOf('?') document.cookie = cookie_name + "=" + current_url + ";" + expires + ";path=/"; Honeywell Forge is a purpose-built software solution on a native edge-to-cloud, data-driven architecture designed to accelerate digital transformation of operations. And over the span of the next seven years in that position, we were able to transform that business into the SaaS Office 365 business it is today cutting across everything from productivity to security, to kind of everyday task that you use now in communications like teams. I think you're on mute. redirect_url = redirect_url +'?option=getmosociallogin&wp_nonce=' + default_nonce + '&app_name='; if( 0) { A lot of them have been focused on industry type solutions, and a lot of times those solutions are focused on kind of the very generic scenario and/or partnering with the ecosystem. So you know, as I think, many of you are familiar with the space itself, many of our customers are either in the process or already, well down the road of migrant the infrastructure or, end use applications to the cloud, and thinking about what that overall ecosystem looks like. checkbox.checked) { What I've heard is that sort of more straightforward and given the nature of your sort of hardware dominance, I don't know if we should use the word dominance, but a strength inside buildings is that, it's just data structure, the nature of data streams, the nature of hardware is just easier to map and analyze. None of Honeywells businesses believe that China trade tensions are likely to lead to incrementally increased [direct] sales pressures.. And I don't think any of them are going to be rocket science per se, but they're very hard problems. var redirect_url = base_url + '/?option=getmosociallogin&wp_nonce=' + default_nonce + '&app_name='; We continue to like the companys strong balance sheet and de-risked pension plan at this point in the cycle, Dray wrote. As I mentioned earlier on one of the unique advantages and as I called it kind of a running start that Connected Enterprise got was the fact that Honeywell was so well positioned in the market and leveraging those existing relationships, leveraging the offerings across our business groups that are already there. So how is Honeywell Connected Enterprise is using Forge to create customer value and actually to become their OT system of record. And obviously the airline industry itself is in a very unique phase in its lifecycle. Clearly this being an industrial tech conference, I'm having issues with my technology, but Mike maybe if we can start and I will figure out how to get the picture back on. So it's a good example of us leaning in with our customers to help solve, solve some of that dynamics, where they might be deploying different vendors. If you think about it from their side of things, if I was interviewing an Airline executive hed probably tell you that delivering the best customer experience on time and at the cheapest cost, in a very simplistic way, it's probably at the cornerstone of what they're trying to achieve. So what are you seeing in that segment and how your offerings are helping customers digitally transform or it comes to industrial assets? to Honeywell from Microsoft and some of you may be familiar with him from his days at Microsoft. Yes, it's a great question and the short answer is its massive. You will receive a link to create a new password via email. And so as we move forward, I think the expectations investors should have is that, you'll continue to hear from us about progress that we're making, about you know, where we think we can take a business and about, you know, how we help Honeywell more broadly from a software standpoint, not only within Connected Enterprise, but how we help our business groups as well using the power of software. location.reload(true); You expect that continued innovation and improvement over time. One year later, that hyperevolution had reached the point where 63% of all Honeywell engineers are. Its hard to imagine how long it might take a traditional startup software company to understand those types of challenges and problems, particularly in todays incredibly fast-paced and high-change world. Industrial companies with better data and machine learning can sell preventive maintenance or performance-optimization solutions. I will try. Rerating means a stock gets a higher, or lower, valuation than in the past because investors recognize the business has changed. Financial Services | Healthcare | Manufacturing | Retail. "The environment in today's retail, e-commerce and supply chain logistics has led to an unprecedented demand for increased fulfillment performance," said Doug Henschen, VP and principal analyst at Constellation Research. They are trying to sell more software to boost profit margins and reduce their reliance on the business cycle, a shift This has been a fantastic. And then obviously the last one, which I spent some time talking about really is life sciences. the creation and ongoing execution of a unified operating model; the creation of extensibility for new solutions and capabilities that customers will inevitably want and need to add over time; and. Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. if (! That frontline worker is at the core of this. Honeywell Forges customers are being told to cut operating expenses, cut the people costs associated with facilities, cut their CapEx, and essentially figure out how to do more with less.. var default_nonce = '2b62cf2162'; The support from management in what we're trying to do is, is unwavering. Would be a teleconference, we didn't have a small glitch. I need to save money. redirect_url = redirect_url +'&option=getmosociallogin&wp_nonce=' + default_nonce + '&app_name='; And it's super interesting space actually, customers at the end of the day kind of no matter what the vertical is and Airlines are no different and we can touch on that specifically, but at the end of the day they really are looking for - to transform, but they're also looking for a trusted partner to help make that happen. We've detected you are on Internet Explorer. And I would say that's the biggest theme that we see within the customer base. And then as you've probably heard us talk a little bit about, we've got a lot of momentum in business. Yes, it's a great question especially in today's environment, I chunk a little bit, but it's kind of funny just because real estate is taken on a whole different dynamic these days, given most folks are still working remotely. So, I don't take for granted, I've been in a super privileged position to kind of see it from the other side of the coin, if you will with a broader tech company and software company that was born in software. No, I tend to agree with you. } One year later, that hyperevolution had reached the point where 63% of all Honeywell engineers are software engineers, far overshadowing its legacy engineering-skills base from the fields of mechanical, electrical and chemical engineers. So, I'll just pause for a second. We have one question I think maybe it's more of a clarification question. from 8 AM - 9 PM ET. I think what's different about us is that A, Alex and I work very closely together globally. Where that partnership with division like HBT or building technology group allows an entryway in for us to really help customers move that to the software level and so to your point - I think that's been very helpful to us. Management wants Honeywell to sell more software, hoping the shift will improve its competitive position in the marketplace and boost profit margins. So if you think about being able to know before it happens, when an elevator might need servicing. In that regard you'll see the bigger players continue to invest like us. And Mike just a clarification one of the investor is asking online and I think I know what the answer is, but would it make just, you talked about public cloud would it make sense for Honeywell to develop its own cloud instead of using Azure, AWS whatever Tier 2 is in the cloud space I think we know the answer but? Here you will find a wealth of information created for people that are on a mission to redefine business models with cloud techinologies, AI, automation, low code / no code applications, data, security & more to compete in the Acceleration Economy! Im happy to take it, I mean obviously this. No thank you. function moOpenIdLogin(app_name,is_custom_app) { We also like the prospects for an eventual further positive rerating.. And so, it's really about bringing that ecosystem together and helping our customers make sense of that data and then be able to make that data actionable. And so, it just brings a different, unique perspective to it. Yes, right now it's been focused on the building side of things and helping stitch together some of the SAP systems that companies have deployed with some of our connected building offerings specifically on energy optimization. That software is a high-margin business. And so one of the things from a go-to-market standpoint that we've been hyper focused on is really being customer centric in our approach. Dray rates Honeywell shares Outperform with a $175 price target. But to start and at the core of it obviously leaning on the expertise from legacy Honeywell and the business groups is critical to our success. And we're excited about where it's going to go and opening up a new vertical for HCE specifically has been great because obviously not only is Sparta serving that with their product but it also opens the door for the ability for us to cross-sell and some things like buildings, technology, and other aspects. So actually we do have an interesting question. And so, if you think about whether that's a manufacturing facility, whether that's an oil and gas rig, pick and poison the nature of kind of each segment within that broader vertical brings with it a whole set of different complexities that really are focused around processing and managing other facility as much as it is about the assets and things like maintenance. And it's a little bit of what the right has, but kind of a typical, if you think about a large retail customer, that's got a, a warehouse in the end goal is, is similar. It's the old saying of kind of garbage in, garbage out. Software built into hardware, such as a washing machine, isnt going to transform any companys margins. And so, I would say we're not where we were eight years ago. And for those of you who want to ask questions, you can do it by Vericast. And so as we look forward, one of the things that we spent a lot of time with customers on is helping them think about what that long-term picture can look like. We're in cyber - we're in arrow. And so, if we come in with a point solution and say deploy this, but we don't help them stitch it together with other systems that they're running. And take away. But I would say from an adoption standpoint industrial is further behind. Near term, Honeywell remains still somewhat cautious toward the global macro short-cycle economy, particularly in the wake of the recent step-up in trade friction with China, Gordon Haskett analyst John Inch said in a recent research report. Got you. To achieve changes of that scale, Honeywell has had to undergo its own radical transformation. We have a very focused strategy as you've probably heard Darius and Greg talk about. And as I mentioned, without their cooperation, there is no way that we can lead to, that the accretive overall gross margin that we provide to the company or segment margin. intended to work together, let alone intelligently and harmoniously, Trice said. var myWindow = window.open(redirect_url + app_name, "", "width=700,height=620"); Ive spent countless hours with senior executives of our customers around the world, and not once did I hear somebody say, Ive got an IoT problem., Not once did I hear somebody say, Ive got to be running on somebodys cloud. Instead, it always comes back to these core bottom-line realities: I need to do more with less. So we're super excited. So you have everything from kind of the startup ecosystem all the way to the more mature players. And thats a real glimpse into the future, Trice said. Moving to the initial phases of public cloud, starting to get some of their base infrastructure like CRM or HR applications or information worker applications, too moving more towards the operational technology side and connecting the dots on that last mile whether that's on Azure or AWS or global cloud really helping customers bridge that gap if you will. And so, we're really focused on helping stitch together that fractured nature of where the offerings are. Got you. window.location.href = redirect_url + app_name; And if you can't make sense of the data, what you get out on the backside with a very nice UI and analytics won't necessarily mean a whole lot if that data is not able to feed that. Que Dallara who most of you know, our President and CEO has done an amazing job in conjunction with Darius and Greg on building a very experienced leadership team. You know, they have the largest market cap. So within this case and within the warehouse, provides the ability to predict when maintenance challenges are going to come in, whether it's a piece of equipment, whether it's a - you know, system that's overviewing the manufacturing facility or the warehouse, and then obviously optimizing it on the end worker. And 3 months ago, on the strength of its new vision to become a powerhouse in Industrial IoT, data, digital, and the cloud, Honeywell was readmitted to the Dow Jones Industrial Average. Is there an opportunity to sort of rank order the rest or how should we think about that? And so, we're really trying to attack all aspects of what that building experience looks like both for employees as well as employer's ability to manage that. Pilot users experienced reductions in unplanned downtime and overtime costs by predicting failures. If you are having this conversation, seven or eight years ago, we'd be having a very different dialogue, but over time the customers have started to upgrade their ecosystem. And finally, you know, on the front line you know, the workers are at the core of this. Got you, thank you for your answer. This field is for validation purposes and should be left unchanged. Honeywell is launching enhancements to other software across the aerospace, smart buildings and industrial sectors. It's super complex and especially in ecosystem where almost no building two buildings in the same that's everything from an HVAC systems, your security system to the environmental management of a specific building. We have many of the key companies in our coverage presenting, and of course the largest, most important company we cover right now is Honeywell. I know this was a big debate, maybe five, 10 years ago but? } You see competitive landscape evolving given, you know, companies like Microsoft or AWS, I think taking a more active interest in industrial vertical. And so I would say momentum is really moving on the business right now. engineers, far overshadowing its legacy engineering-skills base from the fields of mechanical, electrical and chemical engineers. We had an acquisition earlier this year that most of you were aware of Sine which is at the center of our occupant experience and think about the return to work environment that we're currently in. So it's not only as I previously mentioned, helping our customers think through what that long-term solution is. And our day will continue in about 10 minutes. Write to Al Root at allen.root@dowjones.com. Yes, it's a great segue actually from the previous question. And B, I would say both Alex and I look at both hardware and software companies, which I think is very unique on the street. We're hearing a lot from the channel that you're being very active and how are you offering in solving it right now? When I started an Office - back in 2010 an Office was a Goliath, but it was all on premise. } Again, you know, as I mentioned earlier, across all the industries, right, maximizing throughput, how can we be more efficient in the same space that we're working in, get more productivity out of our workers and maximize our throughput in a given environment. In October of 2018, Adamczyk launched Honeywell Connected Enterprise as the digital engine to greatly accelerate the evolution into not just a company that writes some software but rather one that views the world and behaves like a software company. With a market value, including debt, north of $128 billion, it is one of the largest industrial enterprises in the world. We always hear about the complexity of the market. The practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks. And then stitching the roadmap together from a software standpoint and Honeywell has been executing at this for several years now. var redirect_url = http + http_host + request_uri; No, no, but just talking about Sparta I don't know how much my question you've got, but it's focused on life sciences, $1.3 billion acquisition closed in February. Honeywell Forge Connected Warehouse provides organizations with two modules that provide real-time visibility across their warehouse site operations and advanced analytics to reduce unplanned downtime, address recurring challenges and automate legacy processes. Launch of Honeywell Forge Connected Warehouse, "Our new Honeywell Forge Connected Warehouse offering brings a scalable and cloud-based solution to help distribution centers accelerate their productivity, predictability and transformation strategies," said Kevin Dehoff, president and CEO of Honeywell Connected Enterprise. So think frontline workers and what those use cases look like. And then even our - one of our core products Tridium Niagara we just passed 1 million instances of that deployed, which is a pretty monumental milestone on a worldwide basis. It just so happens this first one is focused on the building side. Type above and press Enter to search. It was just - I thought it was a good question? So I don't know that I would expect a change in trajectory more broadly in the industry. Fair to say that the nature of assets and data in a building lend themselves particularly well to sort of early, you know to sort of deploying your expertise. And we are very lucky to have here, Mike Spencer, who is Vice President and CFO of Honeywell Connected Enterprise. Thank you. So let me, let me kind of walk you through an example of what that looks like. And then maybe you can chat or talk about the impact of Forge on SaaS for Honeywell and just generally, how do you go about monetizing that value? Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. The only way these industrial customers can meet their goals and objectives is if they can virtualize their operations and their control systems. And so you have two sides of that coin. It's a wonderful to sort of you know, this remote technology is just doing wonders. So again, we're super proud of where we're at and we're super excited about, where we're going and the work we have in front of us. Thanks Andrew. And so - if you saw on that, one of the first slide I showed today you saw that we have a pretty large contingency of AI focused engineers. That future will be digital, it will run autonomously, and youll be able run it remotely so you can control it from anywhere. Whether youre talking about manufacturing plants, warehouses, maintenance facilities, or other types of non-residential buildings, the people in charge of them are faced with vast numbers of assets, operating models, and processes that were never intended to work together, let alone intelligently and harmoniously, Trice said. I just want to give a brief overview on a little bit of background on Honeywell Connected Enterprise and where we've been, and where we are today. The Connected Enterprise software Dallara spoke about is the kind found everywhere, embedded in all sorts of hardware. function HandlePopupResult(result) { But we've made a lot of progress and it's one of the core focal points for us. And with that, Mike welcome to our event. This obviously leads to outcomes for Honeywell which we're super proud of. And so this is really about taking it to the next level, and using software to really help Honeywell, I would say exceed the expectation of being a technology and software industrial you know, very early on in my tenure here I had a lot of conversations with Darius and Greg and Que and I've been very impressed with the level of commitment that the company has really to making Connected Enterprise go. You know, Honeywell Connected Enterprise really has grown over the last three years. And as I mentioned in the previous, we've seen good momentum on that so recurring revenue growth has been very strong for Connected Enterprise. This article brought to you by Honeywell. This copy is for your personal, non-commercial use only. You know, at the core of it, the industrial space is very complex across many different verticals and many different problem sets. So you can do this using Vericast, just type it in and I'll see it, a couple of folks have done it during the presentation with [indiscernible]. While at Oracle, Trice was involved in the buildout of Oracles cloud CRM and CX strategy, which Honeywell said was a big factor in its decision to bring him aboard to lead the Honeywell cloud initiative. So, I don't know that I would see necessarily a replacement in that mix. var current_url = window.location.href; }. If you have an ad-blocker enabled you may be blocked from proceeding. And that, and SAP is a good example of that. Thank you for being the opening keynote speaker. And then, you know, there at the bottom, you know, over 8,000 customers with 95% retention, I mean, it's been a very healthy business over the least - the first three years of life. And so when we go into a customer contractual relationship it's not meant to be vendor in nature. } So look, Honeywell Connected Enterprise revenue and order swap 20% in the second quarter so clearly having success. Honeywell obviously brings a ton of domain expertise to the mix. Oh, here he is. The Site Operations module features a dashboard that indicates how sites are performing against plan and helps managers identify repetitive bottlenecks and proactively address issues that may impact performance. And as with any SaaS application providing ongoing value is critical. And if trade tensions subside, investors can get back to worrying about something else.