#33 Decoding Honeywell Forge: Transforming Industrial Data into Digital Outcomes

In this episode, we dive deep into the strategic evolution of Honeywell Forge, exploring how a traditional industrial giant successfully transitioned into a software-driven platform. We trace the emergence of the Honeywell Connected Enterprise (HCE) in 2018, which spearheaded the shift from selling standalone products to generating recurring, data-driven software revenue across industries like aerospace, building technologies, and life sciences.

Listeners will discover the key benefits of the Forge platform, specifically how it solves the massive challenge of fragmented operational technology (OT) and IT data by focusing on verticalized, measurable outcomes. We break down real-world impacts, from helping airlines save up to $140,000 in fuel and $40,000 in maintenance per aircraft annually, to driving a 12.97% reduction in energy usage for healthcare facilities.

The episode also maps out key milestones, showing how Honeywell expanded Forge not just organically, but through an ecosystem of powerful partnerships (including SAP, Microsoft, and Google Cloud) and targeted acquisitions (such as Sine, Sparta Systems, and Performix) to connect operational data with business workflows and AI capabilities.

Finally, we explore the key challenges of this transformation—such as integrating with legacy "brownfield" systems, managing OT cybersecurity risks, and overcoming internal organizational silos. We reveal the critical success factorsthat allowed Honeywell to overcome these hurdles: leveraging decades of deep domain expertise, utilizing a "SaaS plus services" model, and maintaining a strict focus on delivering tangible business results rather than just selling a generic data dashboard.

Key Words: Honeywell Forge, Digital Transformation, Operations Technology (OT), Industrial IoT (IIoT), Enterprise Performance Management, SaaS Transformation, Connected Aerospace, Smart Buildings, Predictive Maintenance, OT Cybersecurity.

Transcript

SPEAKER_00 0:00

Imagine for a second that you are a massive legacy industrial company. Like for decades, your entire identity, your absolute bread and butter, has been making physical things.

SPEAKER_01 0:14

Right, heavy duty, tangible hardware.

SPEAKER_00 0:16

Exactly. You make the avionics for commercial jets or you know, automation systems for sprawling factories, maybe the complex HVAC units in 50-story commercial skyscrapers. You manufacture the physical asset, you box it up, you sell it, and you move on to the next widget.

SPEAKER_01 0:31

And that works great until it doesn't.

SPEAKER_00 0:34

Right. Because suddenly a realization hits you. The real gold, like the actual massive untapped value of the 21st century, isn't in the hardware itself anymore.

SPEAKER_01 0:43

Nope. It's in the data.

SPEAKER_00 0:44

Yeah, it's the data that your hardware generates every single second of every single day.

SPEAKER_01 0:49

And honestly, it's a profound existential realization for a hardware company. You suddenly see that you're sitting on this mountain of operational telemetry, but you are not monetizing it at all.

SPEAKER_00 0:59

You're just letting it evaporate.

SPEAKER_01 1:01

Exactly, just evaporating into the atmosphere because your entire business model was built for the 20th century.

SPEAKER_00 1:06

And that brings us to the mission of today's deep dive. Looking at our stack of sources today, which by the way ranges from ARC advisory group research papers to Honeywell's own MA press releases, plus some really fascinating case studies on companies like Gulf Air. We are going to explore the emergence of Honeywell Ford.

SPEAKER_01 1:26

It's quite a journey.

SPEAKER_00 1:27

It really is. We are unpacking how an absolute titan of the industrial world transformed itself from a traditional product manufacturer into a software-driven platform. They realized they had to move away from just selling physical products to generating recurring software revenue.

SPEAKER_01 1:43

Aaron Powell, which is incredibly hard to do.

SPEAKER_00 1:45

Oh, massively hard. So we will look at the massive benefits of this shift, the mind-bending challenges of rewiring legacy industries, and the very specific success factors that actually made it work.

SPEAKER_01 1:55

Yeah.

SPEAKER_00 1:55

Okay, let's unpack this. Where do we even begin with an organizational pivot this massive?

SPEAKER_01 2:00

Aaron Ross Powell Well, to truly understand what Honeywell Forge is, I think we first have to look at the massive structural failure that was happening across the industrial world around the late 2010s. The industry as a whole was basically drowning in fragmented data. The ARC research in our sources points to this as an industry-wide plague.

SPEAKER_00 2:18

Aaron Ross Powell A plague of bad data.

SPEAKER_01 2:20

Aaron Ross Powell Exactly. Facilities were suffering from terrible data quality, massive inconsistencies, and just a staggering amount of wasted time trying to find relevant information.

SPEAKER_00 2:29

Aaron Ross Powell Because the semantic models of a factory floor simply couldn't be mapped to the cloud's logic without manual translation, right? I mean a facility might have a million sensors, but they are speaking entirely different languages.

SPEAKER_01 2:43

Aaron Ross Powell That is the core of the issue, yeah. The divide between the IT networks running the enterprise and the OT networks, the operational technology running the physical equipment was just a chasm. Trevor Burrus, Jr.

SPEAKER_00 2:53

Total silos.

SPEAKER_01 2:54

Right. Totally siloed across legacy control systems, modern asset management databases, local alarm systems, and third-party workflows. Like if an assembly line motor is vibrating out of tolerance, that data stays on the local controller.

SPEAKER_00 3:07

Aaron Powell It doesn't talk to anyone else.

SPEAKER_01 3:09

Exactly. It doesn't tell the ERP system to order a replacement part, and it certainly doesn't tell the supply chain software that production is about to grind to a halt.

SPEAKER_00 3:18

Aaron Powell So the plant manager might know a machine is overheating, but the financial officer has no idea how that impacts the quarterly energy bill or supply chain bottlenecks until, well, the damage is already done.

SPEAKER_01 3:30

Aaron Powell Which is why in 2018, Honeywell realized a completely new vehicle was required to solve this. They created a dedicated business unit called Honeywell Connected Enterprise, or HCE. Okay. And HCE wasn't just a new software product wrapped in a bow, it was an organizational mandate to take all their scattered digital efforts, like um their earlier GoDirect software in the aviation sector, and centralize them.

SPEAKER_00 3:56

They needed a unified architecture.

SPEAKER_01 3:57

Right, a unified software architecture to overlay across their entire global installed base of hardware. Trevor Burrus, Jr.

SPEAKER_00 4:03

And that framework eventually becomes the big launch. I mean, in June 2019, they officially rolled out a completely new software category, branding it Enterprise Performance Management for Operations Technology.

SPEAKER_01 4:15

It's a mouthful.

SPEAKER_00 4:16

Yeah, quite the mouthful. Which the market simply comes to know as Honeywell Forge.

SPEAKER_01 4:20

What's fascinating here is that they didn't just build a generic platform from scratch in a Silicon Valley vacuum and then go hunting for a market to sell it to. Right. They did the exact opposite. They built a software layer directly over their existing massive installed base of physical assets. Forge isn't a single monolithic application you install on a server.

SPEAKER_00 4:44

More modular.

SPEAKER_01 4:44

Exactly. It is a platform-like layer with highly domain-specific packages engineered for different verticals.

SPEAKER_00 4:51

It's kind of like a smartphone operating system, right?

SPEAKER_01 4:53

Yeah.

SPEAKER_00 4:54

But instead of running apps, it runs an entire airline or a hospital or a factory taking the physical hardware and giving it this unified brain.

SPEAKER_01 5:01

That's a great analogy.

SPEAKER_00 5:02

But so they have this grand vision.

SPEAKER_01 5:04

Yeah.

SPEAKER_00 5:04

But executing a unified architecture for every major industry on Earth seems impossible for one company to code entirely in-house. Like even a conglomerate the size of Honeywell can't build every single lobe of that brain from scratch if they want to move fast.

SPEAKER_01 5:18

Oh, they absolutely couldn't. Which is why the timeline post-launch is so aggressive. Following the initial rollout of Forge for Airlines and Forge for Buildings in 2019, 2020 became this explosive period of ecosystem building.

SPEAKER_00 5:32

Yeah, they moved incredibly fast.

SPEAKER_01 5:33

Right. They recognized their own operational gaps and went on a massive partnering and buying spree. Take the partnerships first. They aligned with SAP. Honeywell understands the granular physics of building operations, but SAP dominates real estate and financial data. By integrating the two, a portfolio manager can instantly see the financial and carbon impact of their global energy use on one dashboard. Then they partnered with Microsoft to utilize Azure, connecting autonomous building controls directly with field service workflows.

SPEAKER_00 6:06

Okay, wait, let me play devil's advocate for a second. Honeywell is an industrial powerhouse with billions in revenue. Why are they sharing the pie with SAP and Microsoft or spending a fortune buying up smaller software companies? Why not just hire a thousand software engineers, build those capabilities natively, and own the entire profit margin?

SPEAKER_01 6:24

It comes down to the difference between observation and action.

SPEAKER_00 6:28

Okay.

SPEAKER_01 6:28

A platform that only collects data and displays it on a beautiful dashboard stops at diagnosis. It is just a very expensive way of telling you, hey, your machine is broken.

SPEAKER_00 6:40

Right, which isn't actually fixing the problem.

SPEAKER_01 6:42

Exactly. By acquiring highly specialized companies, Honeywell bought the ability to take immediate action. When they acquired Sign Group, for instance, they didn't just get code. They got an established engine for mobile visitor and workplace processes. Suddenly, Forge isn't just monitoring the HVAC data, it's actively managing the security and flow of the human beings walking through the lobby.

SPEAKER_00 7:06

Buying the action, not just the observation. That completely changes the value proposition. You're moving from a passive alert system to an active workflow engine.

SPEAKER_01 7:15

Exactly. Look at their acquisition of Sparta systems. Sparta was already a massive player in life sciences quality management with their trackwise software. Yeah. By bringing that into the ecosystem, Forge could trigger compliance workflows, manage remote audits, and initiate corrective and preventative actions right at a factory worker's mobile device. It basically dragged the software out of the ivory tower of the IT department and embedded it into the gritty reality of the shop floor.

SPEAKER_00 7:45

And we see that integration philosophy evolving right up to the present day. The sources highlight recent milestones with what they're calling HCE 3.0, pushing this software strategy even deeper into their individual business segments.

SPEAKER_01 7:58

Yeah, integrating it fully.

SPEAKER_00 8:00

Plus, that massive partnership with Google Cloud in 2024 to bring generative AI and agentic AI directly into the forge ecosystem.

SPEAKER_01 8:07

Well, once you have the telemetry and you own the workflows, introducing AI agents to autonomously optimize those workflows is the inevitable next step. Right. But we have to ground this in reality. All of this technology, the generative AI, the strategic MA, the cloud partnerships, is completely meaningless to an industrial buyer unless you can prove the return on investment.

SPEAKER_00 8:26

Oh, 100%. Industrial customers do not care about a fancy data lake. They want measurable business improvements. And Honeywell approaches this using a verticalized result logic. Right. They don't try to sell a generic one-size-fits-all platform. They sell highly specific outcomes tailored to the pain points of different industries.

SPEAKER_01 8:47

Let's break down how that logic applies across those verticals. In the aerospace sector, the pitch for Forge is incredibly focused. Fuel plus maintenance.

SPEAKER_00 8:57

Keep it simple.

SPEAKER_01 8:58

Yeah, and the ROI they document is staggering. For the Forge for Airlines platform, the potential savings are cited at up to $140,000 in fuel and up to $40,000 in maintenance savings per airplane every single year.

SPEAKER_00 9:11

Per plane.

SPEAKER_01 9:11

Per plane.

SPEAKER_00 9:12

That is wild. I mean, if a commercial carrier has a fleet of 100 aircraft, that is $18 million a year in pure capital just recovered from operational waste.

SPEAKER_01 9:21

And the mechanism behind that recovery is what really matters. In 2022, Gulf Air deployed their flight efficiency solutions fleet-wide on roughly 36 airplanes. It isn't just about telling the pilot to fly slower, it involves analyzing historical flight paths, weather patterns, and auxiliary power unit usage on the tarmac to find these incredibly granular efficiencies.

SPEAKER_00 9:44

If that makes sense.

SPEAKER_01 9:45

And Finair took it a step further. They utilized API integrations to automatically export that fuel efficiency data straight into Microsoft Power BI across 47 aircraft, which completely eliminated the manual data extraction process that used to literally take days.

SPEAKER_00 10:02

So airlines are using this to optimize fuel logic in the sky.

SPEAKER_01 10:05

Yeah.

SPEAKER_00 10:06

But how does that outcome-based logic translate when you're dealing with something bolted to the ground like a 50-story commercial building or a hospital?

SPEAKER_01 10:14

Aaron Powell For buildings, the pitch shifts entirely to energy plus air quality. A fascinating example from the sources is the pilot program at the Hamdan bin Muhammad Smart University in Dubai.

SPEAKER_00 10:23

Right, I remember reading that.

SPEAKER_01 10:24

They achieved a 10% initial energy gain, but the technical mechanism is what is impressive here. They achieved this while layering their software directly on top of a competitor's legacy infrastructure.

SPEAKER_00 10:35

Wait, they didn't even rip out the old building management system. They just ingested its data layer.

SPEAKER_01 10:39

Precisely. We will touch on why that architecture is so crucial in a moment. But another building vertical example is Blue Water Health, a hospital in Ontario. By utilizing Forge's sustainability and energy optimization algorithms, they reduced their total energy consumption by nearly 13%, slash natural gas usage by almost 12%, and avoided roughly 500 tons of CO2 emissions over a 12-month period.

SPEAKER_00 11:06

Sources show this extends deep into heavy industry and life sciences too. Like at the El Teniente mine in Chile, which is a massively complex operation, they deployed AI and machine learning to achieve a 0.9% higher recovery rate and a 3.5% higher process mineral base.

SPEAKER_01 11:21

It's impressive scale.

SPEAKER_00 11:22

It is. Meanwhile, in life sciences, the SGS group leveraged the Sparta TrackWise platform to eliminate over 25,000 paper forms. They managed to roll this digitized standard operating procedure out to 11 different sites across seven countries in just a matter of months.

SPEAKER_01 11:36

And achieving that speed of rollout in the highly regulated industry like life sciences, where every single change requires intense validation, it proves that the software architecture is doing the heavy lifting.

SPEAKER_00 11:50

Here's where it gets really interesting. Honeywell isn't really selling software in the traditional sense.

SPEAKER_01 11:56

What do you mean?

SPEAKER_00 11:57

They are selling a smaller utility bill. They are selling fewer delayed flights and less paper on the shop floor. It's almost like hiring a personal trainer. But instead of paying a flat monthly fee just to access the gym equipment, you only pay them for the exact number of pounds you lose.

SPEAKER_01 12:13

That's a great way to put it.

SPEAKER_00 12:14

You are buying the outcome, and the software is just the invisible mechanism delivering it.

SPEAKER_01 12:18

Outcome-based selling is brilliant business for sure, but we have to step back and look at the friction. Achieving these massive savings sounds like magic when we just list the numbers, but the reality of connecting modern cloud architecture to heavy aging machinery is an absolute logistical nightmare. They face several severe roadblocks.

SPEAKER_00 12:37

Oh, the technical friction alone must be staggering. You can't just pause operations and rip out a 50-year-old factory or a working hospital just to install some shiny new edge servers. It's not a green field where you start fresh. You have to work with the messy analog reality of what is already bolted to the floor. Yeah. Connecting legacy hardware to modern AI feels a bit like, I don't know, trying to teach a 1980s typewriter how to send an email.

SPEAKER_01 13:06

That analogy is surprisingly accurate. The brown field integration requires installing edge gateways that essentially act as universal translators. You were dealing with decades-old communication protocols, varying levels of sensor maturity, and a chaotic mix of different vendor equipment. Sounds awful. It is. You have to take a pneumatic pressure reading from a valve built in the 1970s, translate it into a JSON payload, and send it to the cloud. And the moment you start connecting those ancient, previously isolated systems to the internet, you run headfirst into the most terrifying roadblock of all, OT cybersecurity risks.

SPEAKER_00 13:39

See, this is the part that genuinely terrifies me. If I am a municipal administrator, how on earth do you convince me to connect critical life-saving infrastructure to the cloud? The sources mention a water and wastewater utility in the Canary Islands managing 331 facilities with this software. How do you digitize a water supply without being completely paralyzed by the fear of a bad actor hacking in and shutting off the valves?

SPEAKER_01 14:04

Well, if we connect this to the bigger picture, you start to see why Honeywell's strategic ecosystem choices earlier on were so vital. Right. They understood that cybersecurity couldn't be an afterthought. It couldn't be a bolt-on package you sell later. It had to be cybersecurity by design. It was a non-negotiable prerequisite for scaling. Aaron Powell, Jr.

SPEAKER_00 14:23

Which is why they partnered with Nozomi Network.

SPEAKER_01 14:25

Exactly. This is exactly why they partnered deeply with Nozomi and built out a dedicated Forge cybersecurity platform. They had to offer vendor-neutral, end-to-end cyber visibility with deep packet inspection for industrial protocols. If you cannot guarantee the absolute safety of the critical infrastructure, the platform is dead on arrival.

SPEAKER_00 14:44

So they secure the perimeter and monitor the network traffic, but they still have to convince the client to let Forge talk to that 50-year-old equipment from a rival vendor.

SPEAKER_01 14:53

Aaron Powell They address the brownfield hesitation by ensuring Forge was vendor agnostic and API friendly. Remember the Hamdan bin Muhammad University example?

SPEAKER_00 15:01

Yeah, where they layered over the competitor system.

SPEAKER_01 15:04

Right. Forge was layered over a competitor's legacy system. Honeywell didn't walk into the room and demand the client buy millions of dollars of new Honeywell hardware to use the software. They utilized an open architecture that plays nice with others, which significantly lowered the barrier to entry.

SPEAKER_00 15:20

Aaron Powell But lowering the technical barrier doesn't automatically solve the human barrier. The sources detail massive organizational and change management challenges.

SPEAKER_01 15:29

Oh, absolutely.

SPEAKER_00 15:30

Honeywell had to shift its own deeply ingrained internal culture from we sell a physical box once to we sell software subscriptions continuously. And then on the client side, they had to fight the eternal industrial urge to custom tailor every single line of code.

SPEAKER_01 15:47

Because customization is the absolute enemy of scalable software. If you custom code a bespoke solution for every single factory, you aren't a software platform anymore. You are just a massive IT consulting firm. Honeywell had to vigorously push highly standardized, pre-configured, best practice templates to prevent the platform from devolving into an unscalable, unmaintainable mess.

SPEAKER_00 16:10

And right in the middle of this massive transformation, the COVID-19 pandemic completely upends the global industrial world.

SPEAKER_01 16:17

Talk about bad timing.

SPEAKER_00 16:19

Right. Suddenly, nobody's looking at standard efficiency metrics. Every facility manager on earth is panicking about remote audits, return-to-work protocols, and indoor air quality standards. Add to that the complexities of expanding a cloud platform globally while navigating strict data residency laws like GDPR in Europe, where clients demand the data never leaves their local servers.

SPEAKER_01 16:42

The pandemic was a crucible, definitely, but it actually stress tested and improved the value of the platform's modularity. Because they had already acquired SINE, they could rapidly deploy contactless visitor management and digital return-to-work protocols. Because they had integrated Sparta's track-wise, pharmaceutical companies could conduct virtual remote audits when physical travel was universally banned. The value proposition of Ford shifted overnight from purely operational efficiency to operational resilience.

SPEAKER_00 17:12

It's a masterclass in adaptability. But looking at the whole picture, how did they ultimately crack the code? Like, how did Honeywell survive the brownfield integration messes, the cyber threats, the massive cultural shifts, and a global pandemic to make the software strategy an actual success?

SPEAKER_01 17:27

It basically comes down to a few critical success factors, the first of which is leveraging their unique DNA, domain depth first. Honeywell already engineered the auxiliary power units in the airplanes, they designed the avionics, they built the complex building thermostats, they didn't arrive at these facilities as tech tourists from Silicon Valley pitching an abstract concept. They came as insiders who deeply understood the physics, the thermodynamics, and the harsh operational realities of the equipment.

SPEAKER_00 17:56

They know exactly how a factory works because they physically built the factory's nervous system 30 years ago.

SPEAKER_01 18:01

Exactly.

SPEAKER_00 18:02

That level of engineering credibility is something a pure software startup simply cannot fake.

SPEAKER_01 18:08

And the second major success factor is their implementation model of SOS Plus services.

SPEAKER_00 18:13

Okay.

SPEAKER_01 18:14

They didn't just hand a hospital administrator a login credential and leave them to figure out the dashboard. Industrial sectors are heavily regulated and frequently lack deep in-house software engineering talent.

SPEAKER_00 18:25

Yeah, you can't just leave them to figure it out.

SPEAKER_01 18:27

So Honeywell bundled the software with pre-assessments, program delivery, benefits realization tracking, and continuous support. They guide the customer through the friction to ensure the software actually changes the physical operation.

SPEAKER_00 18:40

Which ties perfectly into their third success factor, controlled openness. They offered those vendor agnostic APIs so clients didn't feel trapped in a proprietary Honeywell walled garden. Right. But they paired that openness with highly standardized performance plus packages. They gave you just enough freedom to integrate your old analog machines, but not enough freedom to break the software's inherent scalability.

SPEAKER_01 19:05

It is a very delicate balancing act, and maintaining that balance requires a willingness to let the customer's specific industry needs dictate the product rather than forcing the product on the customer.

SPEAKER_00 19:16

Which actually explains a fascinating detail in the sources regarding their branding strategy.

SPEAKER_01 19:20

Oh, the life sciences rebranding.

SPEAKER_00 19:22

Yeah. In the Life Sciences vertical, you rarely hear the master brand name Honeywell Forge anymore. As they moved into 2024 and 2025, they started leading with names like Trackwise Life Sciences Platform and Manufacturing Excellence Platform. They essentially subordinated the Forge name to speak the specific, trusted language of the pharma and biotech regulators.

SPEAKER_01 19:43

That is the ultimate manifestation of their HCE 3.0 strategy. They realized that forcing a monolithic Forge brand on everyone was counterproductive. They are integrating the software strategy so deeply into the individual business segments that it ceases to feel like a generic platform. Right. It just becomes the natural, invisible operating system for that specific industry. The platform is merely the architecture underneath.

SPEAKER_00 20:08

So what does this all mean? When you step back and evaluate this entire journey, it means that Honeywell Forge provides a vital blueprint for traditional industries. The most successful industrial software platforms do not start with abstract code or a bunch of engineers brainstorming in a vacuum. Definitely not. They start with deep, dirty, decades-long domain knowledge. They amplify that knowledge with incredibly strategic acquisitions to fill workflow gaps, and they are driven by an absolute obsession with delivering measurable outcome-based results.

SPEAKER_01 20:38

It is a blueprint for survival in the digital age. But as Honeywell pushes this platform deeper into generative AI and agentic AI with Google Cloud, we are rapidly approaching a fascinating and perhaps slightly unnerving threshold. We are entering an era where a software layer will soon possess significantly more granular knowledge about running a hospital, optimizing a factory line, or maintaining a fleet of airplanes than the human operators do. Wow. It raises a profound question: what happens to the human workforce when the facility essentially learns how to manage itself?

SPEAKER_00 21:14

Now that is a thought to keep you up at night, or at least permanently change how you look at the thermostat on your wall. Thank you for joining us on this deep dive into the industrial software revolution. Keep questioning the world around you, keep looking for the hidden data behind the hardware, and we will see you next time.