Why We Partnered: Armstrong International + Everactive
By now, it’s old news that we’ve all had to settle into a new way of working, connecting with one another, and just ‘being’. There’s significant challenge in that, of course, and there’s also opportunity – to dive into new hobbies, re-learn something we’ve long forgotten (who still remembers calculus?), or to reevaluate how we spend our time.
I feel fortunate that, for me, it’s largely meant fewer interruptions, including significantly less (read: zero) work travel and no commuting. I’ve strived to invest at least some of that time back into my own growth – especially books, including by finishing some that have been ‘in progress’ for a long time (Amber Spyglass), working through others that may hold lessons about our current situation (The Splendid and the Vile), and using others to ‘get outside’ while we focus on a more ‘indoors’ sort of adventure (The Old Ways, Underworld).
At the same time, it’s been challenging to not dive further into work – both as a means of escape and because we have a lot of really exciting things going on at Everactive. One of these, and reason for sharing some of my thinking with you today, is our partnership with Armstrong International.
Combining the best of industrial know-how with deep technology expertise
We got to know Armstrong in early 2019, as we were finishing building and bringing our first product to market. What we now affectionately and simply call ‘STM’ is a combination of hardware and software, sold as a service, that enables you to continuously monitor all your steam traps, without batteries. Note: if the use of steam and steam traps in manufacturing is unfamiliar, I suggest reading a primer from our team’s Todd Klanderud.
If Armstrong is not a household name for you: they are a fifth-generation family-owned company, one of the largest steam equipment manufacturers in the world, and extremely well respected in the market – they have been serving it for over 100 years. They make and sell steam traps – along with many other pieces of equipment – we enable continuous, fleet-wide, batteryless monitoring of steam traps – simple, right?
As we’ve gotten to know the team over the last year plus, we’ve become more and more excited about the partnership opportunity to combine our cutting-edge technology with their deep industry expertise. It’s this intersection – technology × industry – that we believe creates the conditions necessary to deliver a step change in value in the industrial market. Much has been written about why the IoT has not grown as fast as previously predicted. We won’t play industry analyst here, but we believe this partnership serves as a great blueprint, at least one positive indication of how we can create more value for industrial customers. Now, let’s take a quick step back.
We are on the cusp of a significant tipping point
Over the last decade, the market opportunity broadly termed the Internet of Things (IoT) has gone through multiple cycles of hope and despair. We’re particularly bullish on applications within the industrial portion of this “meta-market” (that’s why we’re wholly focused on them) for several reasons:
- The value of the data is well-understood: consider the following thought experiment – ask a consumer how much they’ll pay to receive health alerts from their smartwatch; you’ll likely get a blank stare. Now, ask a reliability manager how much they’ll pay to receive health alerts on specific pieces of equipment; s/he will often have a ‘to-the-dollar’ answer for you, as well as stories of how the last few failures impacted their team, both in cost and lost productivity.
- New technology enables a much better approach: a large portion of industrial monitoring is still done manually. That has meant fewer data points – and insights – than customers want, because the “cost per insight” has been too high. Customers have instrumented what they could justify based on existing technology, which included wires, poor user experiences, and/or batteries! There’s simply a better way, which opens up new opportunities – to monitor previously unmonitored equipment.
- The opportunity is… well, astoundingly large: each type of equipment in a manufacturing facility comes with its own market opportunity. Looking at nine of the equipment types we can address with our second-generation platform, they represent $70B of ARR. That recurring revenue will be well-earned because it will drive hundreds of billions, to trillions (yes, with a ‘t’), of dollars of savings and productivity gains.
Turning back to steam: today, approximately 95% of steam traps are monitored manually, typically once per year. Shifting from annual to continuous monitoring on an “average” steam trap saves approximately $1,200 each year. Taken altogether, those savings add up to an approximately $3B ARR market for steam trap monitoring. Un- and under-monitored traps, your days are numbered, Everactive & Armstrong are coming for you.
Partnering helps accelerate & amplify this trend
The industrial world is a huge, complicated, combination of markets, often with their own unique challenges. That’s why we’re building partnerships: we see them as the best way to amplify the value we bring to industrial customers – and beyond – by combining our technology expertise with the best that forward-leaning Equipment Manufacturers, System Integrators, Service Providers, and Analytic Specialists bring to the table.
Like any meaningful relationship, our partnership with Armstrong has taken time and commitment. One of the characteristics that’s helped us along the way: the harmony between the cultures of the two companies. On the Everactive side, we talk about our core values often: pioneering ideas; rigorous & honest thinking; live well, work well; and, one team. Mutual trust and respect are at the root of everything we do, and that’s something we have in common with Armstrong.
We’ll be sharing more about how we developed – and are executing – our partnership strategy in the future. In the meantime, if you live and work at the intersection of technology × industry and believe there’s an opportunity for us to work together, please reach out. As they say, we’re “open for business.”