JimPinto.com - Connections for Growth & Success™
No. 96 : August 26, 2002

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

  • AspenTech for sale
  • Honeywell buys Invensys sensors
  • Viable Utopian ideas - shaping a better world
  • The 'blogging' phenomenon
  • Essential workplace vocabulary - 2002
  • eFeedback:
    • Comments on 25% drop in US household net worth
    • Technology counters population boom resource depletion
    • More on Foxboro's 'March madness'

AspenTech for sale

Aspen Technology is a Cambridge, MA. based supplier of software and service solutions used by companies in the process industries to design, operate and manage their manufacturing processes.

Following its June 2002 acquisition of Hyprotech (2001 revenue $50m) for about $100m, Aspen has fallen on hard times and is itself for sale. With about 1,900 employees and 2001 sales of about $310m, publicly held AspenTech has generated significant operating losses and cash flow problems. AZPN market-cap has dropped from over $1b to about $140m. Most major investors are clearly under-water and are looking to get out for whatever they can get. Auditor Arthur Andersen was fired in June 02. Founder and CEO Larry Evans will be retiring within the next couple of months.

During the recent cash-crunch, Aspen employees have been forced to take unpaid days off, as well as a substantial pay cut, with some monthly bonus payments being held up. To improve morale, Aspen management has just announced a stock option plan with an exercise price of $2.98 (the stock closed on 23 Aug. 02 at $3.97), with the number of shares proportional to recent pay cuts. The option plan doesn't seem to help the inevitable turmoil. Sad, for a once high-flying business leader.

Investment bank JP Morgan has already distributed the Aspen prospectus to key potential acquirers. The most likely buyers are Siemens or GE, though other process majors like Honeywell and ABB are possible, as well as software leaders like SAP, I2 and Peoplesoft.

Pat Kennedy, President of $ 60m OSISOFT [pat@osisoft.com] a successful AspenTech competitor provided these insights:

    "Actually I am surprised that the market has see fit to tank the stock because of all the acquisitions. The problem is that they do not do a good job of assimilating new companies and end up with badly integrated offerings. They don't make enough money to be a software company: look at MSFT, SAP, OSI - it takes about $300K/employee to upgrade your offerings at the current speed of software evolution.

    "AspenTech's biggest problem is that they didn't believe their own strategy. They don't need three advanced control companies (DMC, Setpoint, Trieber) and they don't know anything about APC. They didn't need to get into the Optimization market (PIMS, Chesapeake) - they don't know that market and couldn't manage it.

    "I think that AspenTech could be reshaped - but it will take guts and drive to get rid of the people, software and companies that do not fit. They are susceptible to a small, lithe company that creates a new flow-sheet-modeling package and goes against them.

    "In my opinion, the only possible buyers (GE, Siemens, ABB) are all hardware companies and will screw this up big time. It's hard for me to see a good outcome for AspenTech."

Click Aspen Technology reports $60 million fiscal Q4 loss

Click Discussions on the AZPN Yahoo message board

Honeywell buys Invensys sensors

Last week there was an interesting play between two of the companies we have discussed regularly. Honeywell Automation and Control Solutions (ACS) has signed an agreement to acquire Invensys Sensor Systems for about $400m in cash.

The size of the acquired company is about $350m with good profit margins, which brought a fair price. This seems to confirm the Invensys strategy: sell profitable businesses to generate much needed cash, and generate future value by turning around what remains. A tough row to hoe!

In the meantime, on Thursday (August 15 02), Kevin Gilligan of Honeywell ACS had a "town hall" meeting in Phoenix for the Industry Solutions group. Gilligan insisted that IS is making good progress, and was not for sale. He thanked outgoing President Terry Sutter, and announced that he was now looking for a replacement (he did not specifically say it was an internal search).

Honeywell insiders noted that Gilligan's speech was similar to comments made just before the deal for GE to acquire Honeywell was announced. Top industry sources suggested that Terry Sutter was indeed the 'fall guy' for past IS accounting issues such as overstating revenue from bookings that had not yet been shipped. Meanwhile, it has not yet been formally announced that Sutter will be joining Cytec Industries as COO.

Click You might like to read the more detailed notes on Gilligan's town-hall meeting on the JimPinto.com weblog

Click Honeywell Acquires Sensor Systems Business from Invensys

Viable Upopian ideas - shaping a better world

The hard realities of a new century are bringing unprecedented changes. Low-tech terrorists, individuals who sacrifice their lives to make a point, are exposing the vulnerabilities of America’s technological prowess. At the heart of the economic system, we seem to be powerless against individual selfishness and greed. There is new recognition that many of our problems have little to do with terrorism, and more to do with our societies blind spots.

I continue to get insightful and thought-provoking feedback on this subject. I am working to develop more practical ideas that can emerge and crystallize as "soft solutions for hard problems".

Viable Utopian Ideas: Shaping a Better World is an upcoming book, edited by Dr. Arthur Shostak, Professor of Sociology at Drexel University, Philadelphia, PA. It includes 47 essays from eminent writers, futurists, technologists and philosophers (including yours truly). This book will be published soon - I'll let you know when it's available.

In the meantime, you are invited to visit the Utopian Ideas website - which is a forum for refining and improving these ideas, sharing new ones, and calling attention to material of likely interest. The website includes summaries of the book's material, plus an Introduction and Epilogue by Art Shostak.

You might also like to join the online forum for discussing viable utopian ideas, and contribute to developing the Second Edition of the book. The website includes a link that will allow you to sign-up.

Click Viable Utopian Ideas website

The World Future Society has published a version of my ideas on "Soft Solutions" on their website, with an opportunity to generate discussion and provide direct feedback. I invite your participation and involvement.

Click WFS website: Finding a softer approach for a new century

The 'blogging' phenomenon

I added weblogs to the JimPinto.com website just a couple of months ago, and already the traffic has quadrupled. People seem to want to come back regularly to read, give new news, comment, or include their own updates. There are a lot of messages (and details) that don't make it to the selected few we feature in the regular eNews. In any case, most of them are published almost immediately in the weblogs.

Newsweek (26 Aug. 02) has an excellent story on the 'blogging' phenomenon. Beyond the high-profile commentary blogs, there are a far larger number of personal journals that are proliferating as the blogging boom makes people into instant publishers, newshounds and public diarists. The Internet is finally delivering on its heady promises of personal empowerment.

While blog indexes list about 10,000 blogs, there are more than half a million of them - and the number is growing. Those 490,000-plus other blogs make up the vast dark matter of the blogosphere. They portend a future where blogging develops like previous breakthroughs such as desktop publishing, presentation software and instant messaging, and becomes a part of our everyday lives. Steven Levy of Newsweek calls it a social phenomenon, noting that the blogosphere self-organizes into clusters of like-minded individuals. Too, blogging has a compelling future in corporate settings.

You can blog your comments on the topics discussed in the regular JimPinto.com eNews - or for that matter ANY topic that relates to my articles, poems, news, discussions on the JimPinto.com website. Or, bring up a NEW topic, or question.

Typically, your name and email address will be published in the weblog. If you would rather have your name withheld, simply don't include it. In any case, confidentiality will be respected.

Your blog will usually be published the same day on the weblog for that topic. You can read the relatively immediate feedback and commentary from many others, on the same, or similar, or new topics.

Happy blogging! Stay tuned!

Click JimPinto.com weblog index

Click Newsweek - Living in the blogosphere

Essential additions to the workplace vocabulary

Ted Mohns sent me this amusing list. I tried to track it down on the web, but couldn't find the original author (if it's you, or you know who, please e). Seems like it could be Scott Adams' Dilbert.
  • BLAMESTORMING: Sitting around in a group, discussing why a deadline was missed or a project failed, and who was responsible.
  • SEAGULL MANAGER: A manager who flies in, makes a lot of noise, craps on everything and then leaves.
  • ASSMOSIS: The process by which some people seem to absorb success and advancement by kissing up to the boss rather than working hard.
  • SALMON DAY: The experience of spending an entire day swimming upstream only to get screwed and die in the end.
  • CUBE FARM: An office filled with cubicles.
  • PRAIRIE DOGGING: When someone yells or drops something loudly in a cube farm, and people’s heads pop up over the walls to see what’s going on.
  • MOUSE POTATO: The on-line answer to the couch potato.
  • SITCOM: Single Income, Two Children, Oppressive Mortgage. What yuppies turn into when they have children and one of them stops working to stay home with the kids.
  • STRESS PUPPY: A person who seems to thrive on being stressed out and whiny.
  • SWIPEOUT: An ATM or credit card that has been rendered useless because the magnetic strip is worn away from extensive use.
  • XEROX SUBSIDY: Euphemism for swiping free photocopies from one’s workplace.
  • IRRITAINMENT: Entertainment and media spectacles that are annoying but you find yourself unable to stop watching them. The O.J. trial was a prime example. Bill Clinton's Grand Jury testimony was another.
  • ADMINISPHERE: The rarefied organizational layers beginning just above the rank and file. Decisions that fall from the adminisphere are often profoundly inappropriate or irrelevant to the problems they were designed to solve.
  • 404: Someone who’s clueless. From the World Wide Web error message "404 Not Found", meaning that the requested document could not be located.
  • GENERICA: Features of the American landscape that are exactly the same no matter where one is, such as fast food joints, strip malls, subdivisions.
  • OHNOSECOND: That minuscule fraction of time in which you realize that you've just made a BIG mistake.
  • WOOFYS: Well Off Older Folks

Click Workplace vocabulary essential additions - on the web


In response to my comment that the average household net-worth in the US has dropped by nearly 25%, an industry analyst wrote:
    "I noticed this same statistic being publicized last week due to comments by Greenspan, as a loss of several $ trillion in US household wealth that had stood at some $42 trillion during the bubble's peak. I agree that this is a stunning statistic.

    "I find the statistic even more troubling because of the degree to which technology, financial institutions, and financial markets have facilitated the individual's ability both to invest and to liquidate investments rapidly. The measures of the money supply employed by economists have traditionally been defined as aggregates of the most liquid classes of financial assets. When individuals can freely and quickly move their assets between so many types of instruments, does this to a great degree monetize such forms of financial wealth? If so, then to that same degree a 25% drop in household wealth represents a contraction in the money supply."

On the subject of the effects of the population boom being countered by technology, John Kish [jkish@triconex.com] wrote:
    "On the subject of the bleak predictions from the National Academy of Science, I kind of see things both ways. Left unchecked, the population boom will surely affect the quality of life for most of us humans down the road.

    "Your point about technology slowing down the demise of civilization by the population boom, makes me think of a similar scenario described by the once popular and trendy author Erich von Daniken. In his series of books (including Chariots of the Gods and In Search of Ancient Astronauts) he gave no credit to the ingenuity and fortitude of the civilizations that lived in and around the mysterious marvels when they were created (Easter Island statues, Egyptian pyramids, etc.)

    "There is nothing more powerful than the human spirit!"

Another Foxboro employee brings up a different viewpoint on their tradition of 'March madness':
    "I have to comment on the recently reported weird things going on at Siebe/Invensys that seem to be blamed on former CEO Allen Yurko.

    "My observation is that most of the funny business that goes on at Foxboro is home brewed and is not a result of any edicts from above. I'm not a Yurko admirer - but he was not totally unreasonable. He gave Foxboro reasonable funding to develop products and modernize manufacturing. Foxboro management squandered it. Instead of new products and efficient manufacturing they produced grandiose nonsense like Six Sigma and other marketing/propaganda campaigns. They were trying to pretend they were big shots like Jack Welch, instead of martinets in a second rate company in a backwater industry.

    "My criticism of Yurko (and now Haythornthwaite) is that they he couldn't see through the BS and bluster and realize that the Foxboro local warlords were taking him for a ride. These guys (or their carefully groomed direct descendants) are the same ones that ran Foxboro into the ground before Siebe came along."

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