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Manufacturing Software Deep Dive – Manufacturing Market Themes, Players, & Investors

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Michael Brown

April 02, 2017
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We at Bowery Capital released the 2016 edition of Opportunities In Vertical Software in November, which laid out our point of view on ten specific verticals and the potential for various software solutions to dominate each of these ten verticals in the coming years. For ten weeks, we are releasing content focused around the impact of software on these ten industries. We covered the Healthcare Vertical last week, and have also covered the Education, Legal , Restaurant, Insurance, and Construction verticals in weeks prior. This Manufacturing Software Deep Dive post is intended to provide an analysis of Manufacturing market themes, players, & investors.

Manufacturing Market Themes:

(1) IoT Will Link Machines, Sensors, Computers, and Humans – Adoption of IoT technology will provide big opportunities for founders. A leading number of manufacturers are beginning to adopt “smart manufacturing” with Siemen’s having machines and computers handling 75% of their value chain, GE using 10,000+ sensors to measure air pressure/temperature at their battery plants, and Harley-Davidson having each asset on their plant floor connected and tracked in a performance management system. This continuous adoption from major manufacturers will pave way for mass adoption of IoT as more manufacturing industry leaders see the benefits.

(2) Predictive Analytics – New Software and sensors allow for precise predictions – The manufacturing industry will be increasingly relying on the data their companies produce and perform actions based on those data points. Data captured through all points of the production process can be used for processes such as maintenance scheduling and demand forecasting of products.

(3) Importance of Machine Learning and AI – Manufacturing companies will focus more and more on the importance of machine learning and artificial intelligence software. AI will lessen the load for manufacturers both financially and operationally. For example, CloudNC replaces human operators of Computer Numeric Control manufacturing equipment. This action halves the cost of production for more than $300B of components each year.

(4) Opportunity for new disruptors focused on providing industry specific solutions – While the major players in the manufacturing technology industry focus on providing software solutions for large enterprises, there is a developing market for midsize firms to offer tailored, specific software for different industry verticals. Most large manufacturing software players offer general ERP solutions, while software founders in the space, can benefit from focusing on specific software verticals, such as sensors, manufacturing equipment, etc.

Manufacturing Industry Major Players:

SAP continues to be one of the largest players in the manufacturing software industry. SAP has started to shift more towards cloud services in the recent years, as noted by their several multibillion-dollar acquisitions of cloud-based products. SAP currently provides their software to over 293,000 customers in 190 countries. Sage is another market leader, which services 6.1MM customers worldwide.

Manufacturing Industry Emerging Players:

Software players gaining momentum in the manufacturing industry include FogHorn which provides an edge intelligence platform for industrial and commercial IoT applications, and Presenso, which is maxing industrial production uptime by crowdsourcing machines and constantly analyzing big industrial IoT data to improve operations. Also worth noting is, CloudNC which is able to halve the production cost of users by replacing human operators of CNC manufacturing equipment, through automation.

Most Active Investors Focused On Manufacturing Technology:

Some notable investors in manufacturing software include Lightspeed Venture Partners which invested in Elementum, a supply chain solutions startup. Kleiner Perkins Caufield & Byers, which has invested in mobile fleet management software company Telogis, and IA Ventures which has invested in Sight Machine. Sigma Prime Ventures and ACE Management are two players who have historically invested in the space and continue to be a source of capital for the industry.

Manufacturing Market Themes Link Roundup For Emerging Software Founders:

CB Insights:

CB Insights:

Synchrono Podcast:

Thank you for reading our analysis on Manufacturing Market Themes, Players, & Investors. Make sure to check out the 2016 edition of Opportunities In Vertical Software for the full report and we will be back next week with our next series of industry deep dives.