Fusing the Physical World with the Digital

Written by: Knowledge Leaders Team | Knowledge Leaders Founded in 1992 to build sensor and measurement tools for factories, farms and mines, Sweden’s Hexagon AB is at work today fusing the physical world with the digital. By integrating hard data collection with software, mobile and cloud-based technologies, this Knowledge Leader uses the tools of the digital revolution to power a new generation of smart factories, farms, mines, energy plants, construction sites, urban infrastructure and cities of the future.Stockholm-based Hexagon’s unique focus on connecting data feeds, people, machines and processing power makes it the No. 3 most innovative company in Sweden, measured by R&D as a percent of sales, according to our intangible-adjusted data. The company has a public commitment to invest 10-12% of net sales in R&D, and in 2018 reported a 12% investment. Today, Hexagon’s sensors capture or process half the earth’s geospatial imagery, using it to create 3D models for surveying, construction, public safety and agriculture. Hexagon’s geospatial customers are spread throughout mostly EMEA at 43% of sales and the Americas at 38% of sales, with 19% in Asia. Hexagon’s industrial sensors gather laser and scanner data for design and manufacturing, mostly in Asia at 39% of sales, with EMEA at 32% and the Americas at 19%. Each year, Hexagon solutions touch 75% of cars, 90% of aircraft and 85% of smartphones built.A result of all this data collection, according to Hexagon, is the promise of the Internet of Things has turned the age of connectivity into “the age of complexity.” In its most recent annual report, the firm calls on industrial companies to put to work “the enormous amounts of data they create.” This is where Hexagon comes in: taming the complexity. Hexagon’s solutions take vast amounts of data from connected devices to enable “smart” autonomous systems. Last year, the firm made headlines with new projects to monitor and rehabilitate a dam in India, build an immersive 3D experience of a Frank Lloyd Wright home in Arizona and deliver a situational awareness and tracking project for Canada’s Bombardier. In the future, Hexagon aims to enable entire industrial ecosystems that can learn and adapt to new conditions in real time, autonomously.To support this digital transformation, last year Hexagon introduced Xalt, a software bundle that guides customers through major technology upgrades. Because Xalt integrates across industries, devices and software portfolios, it is open source and works with a wide variety of software. Seattle-based Exotic Metals, an aerospace supplier that has received Boeing’s Supplier of the Year Award on six different occasions reports that Xalt improved its efficiency and productivity by putting data literally in the hands of those who need it. Supervisors on the shop floor use cloud-based data on mobile devices to work directly with machinists, digitizing workflows and reducing scrap rates. Another aerospace firm, the French company Zodiac Aerospace, used Xalt to digitally unwind a complicated hierarchy of communications between 200 purchasing agents and its network of suppliers, reducing expensive delays.With more than 3,700 active patents, Hexagon has 3,800 employees committed to R&D alone. In addition, its Hexagon Innovation Hub sits at the center of the firm’s mandate to share breakthroughs and connect R&D experts to optimize resources and costs across divisions. The geospatial division’s largest segment is land surveying at 42% of sales, followed by infrastructure and construction at 26%, natural resources at 10%, public safety at 9% and aerospace and defense at 8%. The industrial division’s largest segment is electronics & manufacturing at 32%, followed by power & energy at 24%, automotive at 22% and aerospace & defense at 14%. But the most interesting statistic of all reveals the firm’s commitment to digitizing global industry: software services accounts for over 55% of Hexagon’s revenue.Headquartered in Stockholm, the firm employs more than 20,000 employees in 50 countries.As of 9/30/19, Hexagon, Boeing, Bombardier and Zodiac Aerospace were not held in the Knowledge Leaders Strategy. Intangible-adjusted data as of 11/18/19. Sign up for reports from Knowledge Leaders Capital.Related: Financial Advisors and Digital Transformation: Lessons from a Florist