And on to Anaheim!
Mark Watson, Research VP, Government & Manufacturing
From a revenue perspective, it’s been Rockwell Automation’s best year ever with record sales of over $9 billion in fiscal 2023 (16% year-on-year growth is an impressive achievement). There have also been a number of strategic acquisitions over the year that have further broadened the company’s portfolio of products and solutions. The capabilities of the consulting arm (Kalypso) are also helping the firm reposition from hardware to solution provider. With the ongoing integration of Plex and Fiix, Rockwell Automation is bolstering its cloud-native offering and accelerating the development and integration of AI solutions through product releases like Guardian AI and the introduction of Copilots in partnership with Microsoft. Omdia believes Rockwell is following a well thought out and executed strategy for the digitalization evolution.
As the Rockwell Automation Fair journeys from Boston in 2023, to Anaheim in 2024, one thing is for sure, a year is a long time and a lot can and will change.
Six considerations for 2024 For Rockwell this will include how the company embraces the opportunities and weathers the challenges:
North America currently seems to be somewhat more resilient than other regions facing major slowdowns or recessionary risk. Most manufacturing companies are winding down inventory, which is limiting new orders at the end of 2023 and will likely last at least through 1H24. A more robust home market may help Rockwell Automation relative to other global competitors, but nonetheless may lead to more cautious investment in CapEx heavy projects.
Sustainability-related legislation in the U.S. and Europe (amongst other regions) due to come into force in 2025, will drive a greater focus on solutions such as energy management systems and other efficiency measures.
Supply chain uncertainty is far from over. Covid led to Rockwell Automation navigating component and material shortages alongside all other leading automation providers, and average lead times are still trending above historical norms. Resiliency is now the word used to describe localization of supply, multi-source supplier options and the use of technology to help better balance supply and demand. Flexibility and adaptability have been built into procurement processes for both Rockwell but also for their customers which should help the ecosystem to navigate the next black swan event.
Where companies will be with AI is anyone’s guess. The innovators are testing and introducing pilots, but the large majority have not gone beyond sandboxes. Whilst some applications can be compelling, the industry needs to establish the basics, such as data management, which will be a major focus in 2024.
As reviewed earlier in the summary, Rockwell has made major strategic acquisitions, especially over the last 4 years. How it integrates these businesses together with its existing capabilities and solutions in order to offer customers a “digital thread” across their portfolio is a major area of focus. Whilst the story of a holistic and connected manufacturing system across an entire organization is compelling, Rockwell will need to continue to join the dots. Internally, in terms of integration of different systems and capabilities, but also its own cultural transformation from a hardware product to an increasingly SaaS based player, with retraining of its sales force etc.
What’s next in terms of partnerships? With new technologies democratizing innovation more than ever before, how will Rockwell stay at the cusp around topics such as AI and cybersecurity, as well as the ever-evolving climate tech space. With capital likely to be more constrained, acquisitions may be more limited, but the establishment and evolution of partnerships, both with leading as well start-ups will be necessary for Rockwell to continue to lead industry innovation.
We look forward to Automation Fair 2024 in Anaheim, November 18 – 21, to see how Rockwell Automation has navigated the tumultuous and exciting year we have ahead!
See you in Anaheim!
