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NI’s master plan: Bridge engineers with enterprise and give them spotlight

  • June 16, 2020

If NI, the company formerly known as National Instruments, has its way engineers will grab the spotlight and accolades just like software developers have in the enterprise.

NI has launched a rebranding effort, spent $365 million acquiring analytics software company OptimalPlus and rearchitected its business to drive revenue growth.

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NI

The upshot is that NI, known to engineers for its testing and measurement tools but not broader enterprises, is offering a stack that will meld hardware and software innovation with analytics. The NI stack is already used by companies such as Analog Devices to roll out 5G components as well as automated driving systems and aerospace systems.

“We’ve developed and created a growth strategy to transform the company over the last couple of years,” said NI CEO Eric Starkloff. “The simplest way to think of it is going from just serving engineers to serving engineers and enterprises.”

Starkloff noted that NI’s customer base, which includes rocket company Ad Astra, Medtronic, Microsoft, Intel, and Blue Origin to name a few, is faced with the engineering challenges of doing more with less and faster. Another challenge is engineering, and research and development have been hollowed out in many industries. To Starkloff, engineers are unsung heroes that need to get their due.

“When people describe this market and this set of users, more often than not, they use stereotypes that aren’t correct. They think of this skeptical, unemotional engineering stereotype, and that’s not actually the case,” said Starkloff. “Working in this community, these are creative people and they are looking to create creative solutions to technical challenges and societal challenges that have technical solutions.”

The back story

One thing that stood out on NI’s first-quarter earnings conference call was Starkloff’s talk about being true to the company’s 100-year plan. When you consider that most companies think in terms of annual and quarterly plans, 100 years sounds like a long time for a company a bit more than 40 years old.

NI thinks of its 10-year and 100-year planning in terms of what it wants to preserve in terms of culture, value to society, and long-term objectives. One key idea is that NI will continue to spend on RD. In the first quarter, NI spent 23.1% of revenue on RD, 20.1% in 2019, and 19.2% in 2018, according to regulatory filings. Annual revenue for NI has ranged between $1.29 billion and $1.36 billion over the last three years. Wall Street analysts are projecting 2020 revenue of $1.27 billion due to the COVID-19 pandemic and economic impact on NI’s customers. 

Carla Sublett, chief marketing officer of NI, joined the company in February 2019 to modernize the brand. “The company started out as a Home Depot for test and measurement engineers. Some referred to us as Lego blocks for engineers,” explained Sublett. “Over time we started stitching together the systems the rest of the world uses to design products.”

She said NI’s rebrand reflects NI’s evolution from components of systems to full systems. NI’s software is also front and center and covers high performance driver software to use on any hardware with any development language. 

NI over time also evolved to be more of a software company and the acquisition of OptimalPlus brings it more into the enterprise analytics arena. Excluding OptimalPlus, NI has more than 100,000 active software users and an ecosystem that includes more than 1,000 companies. NI’s best-known software is LabView, which has been around for more than 30 years.

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OptimalPlus provides analytics software for the semiconductor, automotive, and electronics industries. The plan is to combine NI’s automotive and electronics production test offerings with OptimalPlus’ enterprise analytics to boost the total addressable market and target engineers as well as operations and supply chain executives.

“OptimalPlus has a set of capabilities and expertise and services that enable this sort of enterprise-level selling into those parts of some of the same accounts that we have a position with test systems and labs and production,” said Starkloff. 

With OptimalPlus, NI is also likely to become more strategic with enterprises pursuing manufacturing Internet of things deployments and broader digital transformation. Starkloff said that NI is likely to work more with systems integrators that will increasingly see engineering integrated with digital transformation. 

Engineering, computer science, software, data science converging

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NI’s move to celebrate and inspire a generation of engineers is good business and also reflects the reality of convergence. Roles in business and technology are converging at a rapid clip.

“In a sense, engineers are developers, but in the hardware sense. NI wants to bridge the gap between the two in a more integrated approach where hardware meets software and data,” said Patrick Moorhead, principal of Moor Insights Strategy.

Sublett noted that the engineering field is being modernized and integrated with technologies such as cloud computing and machine learning. “As we modernize the brand and company, we’re aiming to modernize the whole category,” she said. “For things like cloud and machine learning engineering has been late to the game.”

Starkloff said engineering is becoming more software-defined and integrated but differs from other disciplines because there is a “systems mentality” and understanding of real-world hardware.

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“Many of them have a computer science background. More often they have an engineering background that has a heavy dose of computer science, but they have to understand all the way from real-world IO, the input and output of real signals through hardware design, through software design, and often into mechanical,” said Starkloff.

The evolution of engineering across disciplines is changing the way NI recruits talent. Starkloff said that NI’s pivot to software and analytics brings it closer to customers and end applications. “We’ve been recruiting a lot with people that actually have expertise in autonomous vehicles, in electrification, in 5G and semiconductor. That’s a change in our recruiting so that we have more of that in-market expertise,” he said. “The other one is just more and more modern software development capability.”

The rebrand

For Sublett, a big part of the rebrand for NI revolves around storytelling and taking a more consumer approach to engineering.

“We are taking a less marketing B2B approach to this and a more consumer approach,” she said. “We’re going to tell the stories personally and professionally so engineers can explain what they do and help relatives understand what they are doing.”

Sure, there will be engagement metrics and traditional marketing and ad tech KPIs, but Sublett said part of the NI rebranding mission is to celebrate engineers. “Engineers should have rock star status,” she said. “And we need to elevate the roles of engineers and what problems they are solving.”

In the end, the primary KPI for NI’s rebranding will be revenue growth. “We don’t anticipate significant growth from this in the first six months, but expect to see it in 2021,” she said. 

Article source: https://www.zdnet.com/article/nis-master-plan-bridge-engineers-with-enterprise-and-give-them-spotlight/#ftag=RSSbaffb68

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