The HxGN Live! 2023 conference took place at its new home in Caesar’s Forum this year, nearly seven years after calling The Venetian its base. The conference continued its cadence without missing a beat.

The 2023 edition showcased new product announcements aimed at driving fundamental changes to processes that industrial planners, designers, engineers and operators have depended on so far. Businesses with ambition can now expect jumps in performance and productivity without the hinderance of technology solutions that don’t often interoperate across the value chain, allow timely access to data from operating assets, support the entire range of operator decisions, enable globally dispersed engineering teams collaborate seamlessly on new innovative product ideas, or safeguard OT crown-jewels (and entire production chains) from being disrupted by malicious actors. Efficiency, productivity, quality and safety are antidotes to a planet under siege — helping to minimize waste, pollution, cost and risk.   

Hexagon, the company is going through with its own changing of the guard as well. It has a new CEO with deep engineering roots and a new CMO grounded in industrial software. There is palpable new energy in the management team, and a strong commitment to assert its place in the industry. This bodes a taste of things to come as Hexagon goes to bat addressing key industry pain points and help its customers leverage the vast emerging opportunity from the ongoing wave of industrial digital transformations.

A Smart Digital Reality™

While Hexagon brands itself a Smart Digital Reality company, it is in fact a deeply engineering company at its core with a long tradition of developing hardware and software solutions for industrial problem solving. It serves a diverse client base from manufacturing to services to intelligent cities.

A Smart Digital Reality™ re-imagines the concept of feedback loops, treating the physical and digital worlds as one, where all data is available, live, in context and in one place—providing complete line-of-sight to ever changing situations. It is workflow-driven, bringing speed and agility to any process by serving up the right data in the right place at the right time—to humans or machines. It is real-time and autonomous, ensuring the most up-to date information with artificial intelligence and machine learning capabilities to reduce, or even eliminate, human intervention in decision-making. In summary, smart digital realities integrate real-world sensor inputs with software systems built to visualize, analyze, predict and act—in real-time and autonomously— to create new and better realities that address uncertainty and enable resilient organizations, teams and workflows.

A History of Acquisitions

Having evolved over the years through a steady diet of opportunistic acquisitions, Hexagon manages a wide portfolio of product and solutions targeting an equally diverse set of industry verticals. Indeed acquisitions have played a vital role in strengthening Hexagon’s solutions portfolio and accelerating its growth strategy. Over the past 21 years, the company has completed more than 170 acquisitions to fill portfolio gaps, augment R&D roadmaps, add domain expertise and deliver on strategic priorities.

This evolutionary nature of the company’s strategy has often challenged analysts to truly comprehend the complexity of Hexagon’s governance mechanism as a company, at first glance. Closer examination may provide some clues to understand the company’s management system, how its perceived by its stakeholders, the soft touch philosophy the company applies to its acquisitions, the growth and profitability expectations it sets for them to deliver in the short and medium term, and how Hexagon in general ensures the whole has substantially more market value than the sum of its acquired parts.

The industrial geospatial market is populated with players working from limited sets of core competencies targeting use-cases within their traditional comfort zones either as provider of hardware (scanners & sensors, LEO satellites, imaging drones, etc.); software (BIM, photogrammetry, base-mapping, point clouds, etc.); services (such as mesh-generation, modeling & simulation, integration, custom solutions, etc.;). Sustaining competitiveness here requires executing opportunistic partnerships to supplement portfolio gaps or widen it in response to changing customer expectations.

Hexagon’s Market Context – A Situational Assessment

Digital transformations continue to change the face of industry at a rapid pace globally reflecting the changing nature of the global business environment. The changing expectations of customers. The changing nature of the workforce. The visible effects of climate change visible all around the world. The new demands by regulators to be sustainable and compliant. The demand by investors for timely and transparent reporting.

All of this demands innovation and organizational changes at a rate not seen in earlier generations of manufacturing – more sense ability from operating assets, more access and insight to operating & contextual data, better training & decisioning tools for frontline workers and more recently, increased board level interest in issues traditionally left to operations – cybersecurity, sustainability and the impact of new cognitive technologies such as GenAI.

Why Success At Industrial Digital Transformations Matter More Than Ever

Business Leaders Continue To Grapple With Several Key Challenges

• Deliver growth & profitability this financial year and next quarter
• Institutionalize knowledge in a time of generational industrial workforce retirement
• Empower front-line workers with insight and advise for better faster decisions, work more efficiently and increase plant performance and productivity. 
• Attract and hire the best industrial technology talent to build new business value
• Sustain market differentiation; Reverse the rapid commoditization of core capabilities in the face of intensifying competition. 

Companies planning for digital transformations as short-term financial improvement tactics risk missing out on the orders-of-magnitude larger strategic benefits that (if done right) could accrue over time and show up as material improvements on P&Ls and balance sheets. 

A winner-take-all sense pervades the rush. While ArcInsight Partners observes a widening separation between those who get it right, versus those who have not, it cautions against drawing too many conclusions just yet . It’s still early days for industrial digital transformation and quantitative performance correlations remain quite muddy at this point. We explored the area in our note – The Ground Realities of Industrial Digital Transformations.

Nevertheless, there is little doubt all industrial companies expect significant benefits from IDX and are willing to place big bets on appropriate initiatives and technologies that promise to get them there. 

A digital transformation initiative must necessarily move the needle materially on shorter term revenue and profitability metrics, most commonly via enterprise-wide process improvements. It must also open possibilities for strategic returns that may not be quantifiable imminently in routine business performance KPIs.

We strongly believe the latter might ultimately manifest themselves as key value engines over the companies’ longer-term horizon. 

HxGN Live! Sneaks A Peek Into Hexagon’s Future

 ArcInsight Partners wrote about new technology offerings and initiatives observed at prior HxGN Live events. The report from the 2022 showcase is available to review here – “Hexagon Is A Platform + Analytics Story.“

The 2023 event gave us a ringside view to newer technology and platform innovations driving industrial digital transformations at client facilities. More importantly we observed how they are shaping the future of Hexagon itself, as it prepares to address a wider spectrum of clients across verticals and across a range of industry pain points.

Numerous demos, track presentations, discussions and product briefings gave us a flavor of customer pain-points, as well as emerging solutions to address those. We focus on three in this review – the newly launched NEXUS platform, PAS OT Cybersecurity and HexagonEAM. We hope to cover the Intelligent Digital Cities/SIG portfolio and the exciting new GenAI capabilities emerging from Hexagon’s Xalt data & analytics platform, in a separate deeper dive in future.

THE NEXUS PLATFORM

We had a first look at the many dimensions of Hexagon’s newly launched digital reality platform – NEXUS, at Hannover Messe’s ‘Digital Ecosystems’ Hall back in Feb 2023. The platform brings many dimensions to serve the industrial design community

An Open Collaboration Foundation

As a foundational tool, NEXUS aims to turn design and collaboration practices on its head. It allows visualization of a shopfloor prototype complete with machine tools all built from the ground up from their original CAD models and BoMs. It supports dynamic simulation of designed parts and complete units within a virtual factory operation by optimizing work-cell locations, safety distances for robot assemblies, and appropriate ergonomic designs for workers and operators to work in their spaces.

Metaverse Creation Capabilities

Helping make virtual factory vision a reality for manufacturers are partnerships Hexagon announced with Microsoft’s cloud technologies and with Nvidia’s metaverse creation platform Omniverse. 

Nvidia’s ray-tracing technology (originating from collaborations with the video-game development community and supporting Pixar’s celebrated animation films) enables photorealistic renderings delivered in real time. Pixar’s Universal Scene Description (USD) framework underlies Omniverse’s collaboration experience and extends to Hexagon’s HxDR reality capture platform and Nexus manufacturing platform seamlessly. Manufacturers can now connect to Hexagon using most third-party ecosystem tools to leverage real-time collaboration and feedback between engineering and manufacturing.

A Dedicated Development Environment

The Manufacturing Intelligence division’s Nexus for Developers is a dedicated development environment to build native SaaS applications and connected solutions for engineering and manufacturing that utilize the Nexus digital reality platform and its ecosystem.

The open digital reality platform allows manufacturers to connect Hexagon and third-party engineering, manufacturing and quality assurance products and solutions. It enables real-time collaboration and feedback between engineering and manufacturing.

The available Software Development Kits (SDKs) connect products and solutions to the Hexagon portfolio. Once connected, applications will talk to any other application plugged in to Nexus and share or receive relevant manufacturing data using standard data models. The persistent connectivity improves common workflows and remove manual import/export between SaaS or desktop applications.

A library offers reusable user interface components that accelerate UI development, enabling developers to efficiently build high-quality, feature-rich user experiences

Apps Marketplace:  The platform also makes available to its users many of the apps on the Xalt & Nexus App Marketplace. Among some we found interesting were –

• Materials Connect: A cloud-based library to help manufacturers or material suppliers to manage material data, physical test data and behavior models for use in product Computer Aided Engineering (CAE) workflows.
• Materials Enrich: The app uses the Nexus platform’s machine learning capabilities and cloud-accelerated material behavior simulations to help users find and simulate optimal materials that may have never been made or measured, improving performance and sustainability of their products.
• Design for Additive Manufacturing (DfAM): A solution for teams to jointly develop an optimal metal 3D-printed part and prepare for 3D print using a laser powder bed fusion (PBF) process. Customers can use the Nexus web interface to connect Hexagon’s MSC Apex Generative Design and Simufact Additive process simulation software with AM Studio from CADS Additive and Materials Connect via the cloud, and easily manage user access to projects.

Deployed Use-Cases

• Manufacturing Ops. Integration: Nexus partner Oqton connects DfAM and similar workflows to its Manufacturing Execution System (MES) to enable manufacturing processes for its customers and operators.
• Electronic Design Automation: EDA software company Altium connects its own cloud-based PCB design platform Altium 365 to Nexus, leveraging the thermal simulation capabilities of Hexagon’s computational fluid dynamics (CFD) software for its electronic engineers. This provides efficiency savings for Altium customers.

Value Engineering Support: Hexagon’s Applied Solutions team grapples with a range of implementation issues on behalf of clients ranging from –

            The mundane: such as systems that don’t talk, enterprise platforms that only IT can change, a mix of office tools like Excel; scripts, engineering or operational technology running from locally stored files that can be distributed ad hoc throughout teams;

            To the highly specialized: such as design and optimization of electro-mechanical systems, requiring specific calculations and reports leveraging the expertise and intellectual property of the team. The issue handled are spread across a range of tools and applications and written in a variety of programming languages.

PAS – OT / ICS CYBERSECURITY PLATFORM

As manufacturing environments move towards modernizing industrial systems to boost productivity, raise operational efficiency, the first step taken is usually towards making these infrastructures more interconnected and integrated with IT systems. The next step focuses invariably on enabling employees to monitor their OT and industrial control systems from mobile devices remotely.  This step allows full and often complete unadulterated access to manufacturing ‘crown jewels’ without significant security controls applied, for anybody with a few base credentials.

Attacks on industrial infrastructures have been rising steadily in intensity & frequency –

• Port of Nagoya (Japan’s busiest port) ransomware shutdown:   on July 5, 2023
• Suncor Petro-Canada ransomware attack:    on July 3, 2023,
• Colonial Pipeline (TX to NH supply shutdown):    on May 7, 2021
• Oldsmar FL water utility SCADA intrusion:    on Feb 5, 2021
• Maersk Shipping ransomware shutdown:    on June 17, 2017
• Ukrainian Power grid attack:    on 23 Dec 2015

Cyberattacks on chemical and O&G facilities can pose very real risks to health & safety of people and the

environment. Not to mention massive resultant punitive fines from regulatory authorities, lawsuits, and long-term reputational damage. The criticality of ensuring production runs smoothly and continuously is a big priority for most industrial players. Like plant health, safety and environment (HSE) programs, cybersecurity should be considered alongside as a required key risk management program with full sponsorship of executive management, asset owners, and the board of directors. It is anticipated the US Securities & Exchange Commission will soon finalize new regulations (presently in proposal form) related to cybersecurity risk management which require C-suite managers and boards to report on strategic plans to manage cyber risk. The rules will also require every publicly traded company to file disclosures with descriptions of their security strategy, governance, and risk management. Companies must explain to shareholders how they assess cyber risk, describe their security policies, rapidly report material cyber incidents and demonstrate a significant level of board oversight on cybersecurity issues.

Hexagon’s PAS OT Cybersecurity leadership briefed ArcInsight Partners on how their automated methods strengthen overall OT asset management capabilities. We also observed how an important client du Pont chemicals uses the PAS Integrity platform to automatically reveal and contextualize all assets, connectivity paths, and processes spanning all sites comprising their vast OT environment.

Traditional IT endpoint cybersecurity tools address only 20% of OT/ICS-centric cyber assets, leaving proprietary, heterogeneous industrial control systems hidden and vulnerable.

With every new asset deployed in support of growth, innovation, and efficiency efforts, the enterprise attack surface expands. The number of vulnerabilities is also rising rapidly year over year while the time it takes for attackers to exploit them is dropping.

The PAS team helps align with client’s corporate goals and assists them in identifying opportunities to transform their OT cybersecurity process.

Most interestingly, we also had an opportunity to theorize how PAS could potentially generate valuable AI-driven two-way synergies with other Hexagon portfolio products. One possibility may be through research collaborations on emerging use-cases, with other product groups such as the Xalt Platform team.

Hexagon ENTERPRISE ASSET MANAGEMENT (formerly InforEAM)

A vital capability to complete an asset lifecycle offering, we consider EAM an important addition to Hexagon’s portfolio, one that opens new synergies across verticals with its horizontal industry agnostic features & capabilities.

Enterprise Asset Management software helps organizations to plan, optimize, execute, and track the necessary activities, priorities, skills, materials, tools, and information associated with an asset.

Failure to manage and maintain enterprise assets can lead to unplanned downtime, suboptimal asset performance, and supply shortages.

ALI’s Strategy & Enablement team walked us through their product roadmap and strategy for the latest release of Hexagon EAM, and new use-cases it could enable for customers. The new team is putting in place new strategic plans and sector priorities, a roadmap for enabling Smart Digital Reality, and value engineering support.

Clearly there is serious intent to realize the immense potential this newly acquired business brings to the Hexagon portfolio. We look forward to seeing significant pipeline and revenue expansion for Hexagon’s EAM business within the next 2-3 years.   

ArcInsight Partners is grateful for the time spent with many Hexagon business leaders, solutions team members, CEOs of newly acquired companies, longtime Hexagon customers, and partner companies. The analyst & media relations coordinators worked hard to coordinate 1:1 meetings, played hosts, and generally ensured a smooth and pleasurable experience at HxGN Live! 2023.

Formal briefings by product leads and broader portfolio discussions helped fill in many of our industry research gaps. Informal conversations with Hexagon customers and newly on-boarded acquisitions provided deep insight into product usage experiences, surface areas of deficiencies, and even a few ideas for improvement. We have proposed formalized programs at Hexagon to continue these interactions on an ongoing and periodic basis.

We attended select track presentations by large corporate users at the various Summits (rooms packed to capacity). The information shared went a long way in improving our understanding of Hexagon’s portfolio and of the customer’s own experiences as a user. Over the years, THE ZONE has become one of our favorite spots to spend all available time between meetings, briefings and presentations. The product deep-dives, having detailed questions answered by specialists and watching demos are great opportunities not only for rich learning, but also to make some great friends.