Honeywell Doubles Down On Industrial Software Technologies With New HCE Leadership, SaaS Offerings And Solutions

By Patrick Moorhead - November 22, 2022

Honeywell has been on a roll the past few years under the leadership of Darius Adamczyk. The company has done a solid job establishing itself as an “industrial tech” play. Part of this transformation was driven by the company’s creation of “Forge,” essentially a cloud solution designed to modernize industrial sites like factories, energy plants, warehouses, and buildings leveraging big data, analytics and AI.

Honeywell is kicking off its annual Honeywell Connect event today, and I will be attending. Honeywell Connected Enterprise (HCE), also known as Honeywell Forge, has gone through considerable leadership changes in the past year. As HCE takes on this new leadership, I believe the Honeywell Connect Event is going to be very exciting, with important announcements on HCE's strategic intent.

Seven months ago, Kevin Dehoff became the CEO and President of HCE. Before taking on this new role, he was the President of Productivity Solutions and Services. HCE is Honeywell's software-focused Enterprise Performance Management platform designed to help businesses streamline and improve operations within a company's facilities. In my conversation with Dehoff, he shared six key imperatives for driving future innovation within HCE. Let's dive in.

An old soul with new life

Honeywell has a very long and storied history, and unlike most of its competitors, it is not a digital tech-first company. While you cannot teach old dogs new tricks, a company can very much change its strategy, investments and leadership.

Dehoff shared that HCE looks to develop and scale Forge as fast as possible, increasing the velocity of updates and features. I think this is vitally important as it has become the norm in the enterprise SaaS space. The ability to scale is something has become a buzzword within digital transformation as digital technology allows companies to get more things done within a digital forecast that otherwise would take more time and effort. Dehoff says HCE is 100% committed to this goal and pleased with its progress to scale. I believe scalability could be a common theme at the Honeywell Connect Event.

Kevin Dehoff, President and CEO of Honeywell Connected Enterprise. HONEYWELL

HCE also wants to focus on changing its rate of innovation. Industrial technology has never had a reason to have fast innovation. Only since the increase in the digital transformation of businesses within every industry has the rate of innovation needed to meet the rate of innovation relative to the digitally transforming world. I believe this trait is inherent to digital tech-first companies but did not come naturally for Honeywell. Expect to see new products at the Honeywell Connect event and expect to see a commitment to continuous releases.

Dehoff also talked about how HCE looks to simplify its go-to-market strategy with outcome-based solutions. I took that as ‘opposed to tech for tech’s sake.’ Dehoff says he will be talking a lot about outcome-based solutions at the Honeywell Connect event. I believe this imperative follows Honeywell's desire to scale Forge, and as it scales forge, it can offer more value to its customers. I agree with Dehoff when he says Honeywell is able to deliver on operational performance and payback outcomes uniquely.

What newcomers to the industry need to understand is that there are no BoD mandates to “spin up an IIoT solution” like we saw in the cloud. Industrial executives need to see the vision for decreased costs, increased revenues, as a service business models and meeting their ESG goals. This is why outcome-based is paramount.

As HCE continues to scale and offer outcome-based solutions, it looks to improve the business models of the software as a service (SaaS). Dehoff pointed out that SaaS business models are the future of the digital enterprise. Honeywell has a lot of potential for growth with its SaaS business models, and Dehoff pointed out how he sees this area as a work in progress. While most software is still on-prem, the future is SaaS. SaaS is simpler, doesn’t require IT infrastructure knowledge, and is infinitely scalable.

As HCE continues to improve its SaaS capabilities, it desires to build out an attractive base of software developers and a culture where software developers would desire to come. In our current economy, almost every programming job is in demand. I believe this is a long-term goal and desire for Honeywell but not a focus that is out in the left field. Talent is attracted by great leadership and well-established names. I think developers will be attracted to HCE that want to be at the front lines of solving the world’s biggest challenges in areas of energy and manufacturing.

HCE strengths to lean on

New leadership needs to lean on the company's strengths moving forward into new leadership. With Dehoff's professional background of strategy and management, I believe it is important to understand Honeywell's core competencies that make Honeywell great.

Dehoff expressed that the competency that makes Honeywell special is that it is a control company at its center. Honeywell's control systems help its customers operate and that it understands how operations work, whether that is how the data is structured or what it takes to optimize an operational process. On top of this factoid is the domain expertise of understanding the industry and the respective markets with its world-class install base. Honeywell is one of the only companies with all of these pieces; holistically, it allows Honeywell to focus on outcome-based solutions. These capabilities are unique.

https://youtu.be/J-l5pOytZiI

One outcome-based solution that is very relevant today is measurable sustainability outcomes. Dehoff made it very clear that when it comes to emissions, its actually reduces carbon emissions in a measurable and calculated outcome. While I hear about many companies who talk about sustainability but never actually do it, Honeywell is a company that does it. Not only that, Honeywell means it, and it is not looking for "clout."

One point that I believe Dehoff and I agreed on is that no matter which aisle you reside with respect to sustainability, reducing your emissions and becoming more efficient is simply smart business. Let's be honest—companies are inherently agnostic regarding sustainability goals. ESGs are primarily driven by the desire to maintain the company name. While there are good intentions within ESGs, the "doing" makes a company more efficient and retains company branding.

Announcements

Honeywell announced new operational technology (OT) cybersecurity solutions that assist customers in defending the availability, reliability, and safety of their industrial control systems and operations. Honeywell says it includes a new advanced monitoring and incident response (AMIR) dashboard and an updated Cyber App control.

Honeywell says its AMIR managed service provides threat detection, security monitoring, alerting, and incident response capabilities. Honeywell says it is powered by Security Orchestration, Automation and Response (SOAR) capabilities, OT operational knowledge, and industry best practices to improve cybersecurity. I believe Honeywell is playing to its strengths with its OT knowledge which allows it to focus on a product that requires advanced cybersecurity skills. Honeywell also says the AMIR managed service is vendor neutral with support for Honeywell and non-Honeywell assets on an industry control systems (ICS) network.

The Cyber App Control also works for Honeywell and non-Honeywell control systems. Honeywell says it is designed to provide an additional layer of security by allowing known and trusted applications to run on ICS assets and increases a customer’s ability to react to malware and zero-day attacks on OT environments.

Honeywell Connect 2022HONEYWELL

Wrapping up

I am excited for the Honeywell Connect Event this week, talk more with HCE leadership and learn more about the new capabilities. As HCE continues to lean into SaaS, faster innovation, and more products, I believe it can simplify its go-to-market strategy around providing outcome-based solutions.

Dehoff is a strategist at heart and I believe his understanding of Honeywell and how all its pieces fit together should be a driving force for HCE's future. I am excited to see all of Honeywell's new products and what is next for Honeywell.

Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.