Computer imaging (aka Machine Vision) is having a moment, and Allied Vision CEO Robert Franz explains why. In this episode of Manufacturing Matters, he joins Winn Hardin to talk about Allied Vision’s brand unification, the shift from components to customer-first solutions, and why AI, edge intelligence, SWIR imaging, and open smart cameras are opening up huge new opportunities across automation, agriculture, healthcare, robotics, and beyond. It’s a fast-moving conversation about where vision technology is headed next and why the future looks bright.

Winn Hardin: [00:00:02] Good morning, everyone, and welcome to a new episode of “Manufacturing Matters,” where we talk about the technology and trends that are reshaping the manufacturing industry. My name is Winn Hardin. I’ll be your host today. I’m also managing director of TECH B2B Marketing. And I’m lucky enough to be, today, here with Robert Franz, CEO of Allied Vision. Robert, how are you doing today?

Robert Franz: [00:00:32] I’m great. Thank you, thank you, Winn. How are you doing?

Winn Hardin: [00:00:34] I’m doing really good. And I’m glad we were able to find some time to get together on this. I know we first had some discussions in January, I believe, at the A3 Business Forum, so there’s a lot of exciting things going on around Allied Vision and we’re going to dig into those today. But before we kick off, Robert, would you mind giving us a quick overview about Allied Vision for the folks in the audience who don’t know your company?

Robert Franz: [00:00:54] Yeah, Allied Vision is one of the leading companies in machine vision worldwide. And it’s actually a conglomerate of multiple organizations —— we’ll probably get into that a bit more and in more detail —— and it belongs to what is called TKH Group, which is a holding structure that’s based in Europe. And that company has been buying companies in the machine vision space. So it’s kind of a buy-and-build approach, but we don’t have the intent to sell these companies at some point. So that’s how we are building up a leading, or maybe the leading, company in the vision space.

Winn Hardin: [00:01:27] It’s been super exciting to see our industry in the automation technology market mature, you know? So that now I think we’re starting to see vertical stack integration. We’re seeing a lot of interesting merger and acquisition activity. To that point … Now, I believe I saw an announcement earlier this year that TKH brands is now under Allied Vision. Is that correct?

Robert Franz: [00:01:46] Yeah. So to be really precise, it’s several brands that are consolidated under the Vision brand. It’s not all of what is called TKH Vision, because there’s also a company called LMI that does 3D technology. And in my group we only do two dimensional technologies. So that’s kind of a difference. But the companies that we are combining under Allied Vision —— and we announced it, as you say, January 15th —— are the old Allied Vision, let’s say, which is the largest company out of the group, then SVS-Vistek, NET, Euresys. I think I captured them all. Yeah. So we bring those companies together, and the main driving motive for that is really making it easier for our customers. To have everything coming from one brand, from one organization moving forward. That is a key theme for us. And I believe that is also to the point that you were mentioning —— kind of a consolidation in that industry, where we are really putting the customer first in an industry that I think is very technology-driven still. Which makes a lot of sense. But you also need to solve your customers problems. And not only do technology for the sake of technology.

Winn Hardin: [00:03:03] Right on. And now … You’re mentioning Allied Vision two-dimensional area-ray-type camera technology; LMI, which I know from the Gocatar days, and one of the best-in-class 3D scanning and 3D imaging applications; and Euresys for custom camera development, I believe? And also frame grabbers. Is that correct?

Robert Franz: [00:03:23] Yeah. Frame grabbers is why we have acquired Euresys in 2023. And Euresys is maybe THE leading company in frame grabbers, for sure in the top three. And that’s a nice complement to our portfolio. Yeah, this is a key aspect. So if the customer comes to us, we can offer not only the camera but also lighting, lenses, frame grabbers … You name it. We’re serving many different segments and many different industries. So, for where we want to go, this has been a very nice addition.

Winn Hardin: [00:03:54] Okay. And let’s not forget Vistek, of course. What does this mean to the customers? It sounds like now you have the freedom to do a full consultative when it comes to the imaging, you know, subsystem of any particular automation solution. Does that kind of free you up? Can you talk a little bit about what the customers can expect under this new unification?

Robert Franz: [00:04:13] Yeah. So what we are certainly trying to do is to move upwards also from products to solutions. We will not stop doing products and components. This is always an important aspect because I do want to build a business where the customer can make the decision on which level of the value chain they want to buy. Do they want to buy just the frame grabber? Okay, that’s fine, but we can also do more for you, Mr. Customer, and then we can go through the other things. We have chosen certain segments of focus for us to move further into the solution space, but we are conscious that in some cases we would start to compete with our own customers. That’s nothing that we want to do. So we are a bit deliberate in terms of where exactly do we do this? But, eventually … This is what customers want. They want solutions and not pieces of a puzzle that they need to figure out themselves.

Winn Hardin: [00:05:03] Yeah. Another characteristic of a maturing technology industry. It’s so nice —— machine vision is really going mainstream. And I’d say that as a gentleman who’s been in the industry for 30 years. So, when you get older, you appreciate the little things, you know? It’s nice to see your kid grow up, essentially. So I do want to ask one last question related to … We talked about solution sets. Are these primarily in the traditional industrial automation, machine vision, computer vision imaging areas? Or do we also do embedded systems?

Robert Franz: [00:05:34] Embedded actually, not so much at this point. No, where we are more diversifying is, around 50% of the business —— depends a bit on which operating company you look at —— but if I look at the consolidated group, then around 50% of the business is really factory automation, where the industry comes from essentially. The other half of the business is other segments. You also have medtech in there. You have transportation applications in there. I mentioned medical already, but also biotech has some very advanced stuff. And also to mention the defense sector, which has been very strong for us for the last two years for reasons that nobody likes and appreciates. But, it’s necessity. And this is something where we have probably developed a leading position by now.

Winn Hardin: [00:06:21] That’s great. Yeah. The defense and aerospace has certainly been … Well, I don’t know that any of us three years ago anticipated it having the uptick that it has, but it’s certainly  got plenty of legs, unfortunately, due to global events going on right now.

Robert Franz: [00:06:36] Yeah, yeah.

Winn Hardin: [00:06:37] So let’s switch to something more positive. When you look at the machine vision industry, what are you excited about in the automation space? And I’m thinking, you know, about shortwave infrared, about the application of artificial intelligence, deep learning, or time of flight. What is it that you’re excited about, Robert?

Robert Franz: [00:06:52] Well, so I think there are many things that I’m excited about. First and foremost, what I always describe as the “shuttle strategy,” and some people know this, it basically comes from the California gold rush many years ago. Where, essentially, the people that sold shuttles to the gold diggers made more money than the gold diggers themselves. And this is what you see with Nvidia these days as well. And so this is what I’m first of all excited about: I think we as the vision industry are a key enabler for artificial intelligence in many, many, many applications. And this is also when I look at our order intake, and compare that with an average industrial type company. We are performing really well and very strongly at this point. And I think that’s the key aspect that’s driving that. So, point number one for me is really, I think we have a very strong future ahead of us. So, we have to play it well, but I think there’s a lot of potential still. Unlike in other areas where AI is more like a disruptor that may destroy your business model. I think for vision, it’s the opposite.

Winn Hardin: [00:07:59] You know, I couldn’t agree more. We were doing a panel, again in January at the A3 Business Forum. We were looking at AI and we were talking about —— and that’s actually on the robotics panel, which was a big part of discussion too —— about how right now everyone’s focused on large language models. But when this gets paired with the very large image models and with the oral models, I mean, there’s going to be a completely new way of interacting with machines. And sight is going to be a key component on that. I don’t know if you if you have any thoughts on that, Robert.

Robert Franz: [00:08:28] Yeah. I mean, my general thought on this is, I have the impression that the development of AI will go even faster than we anticipated, like, a year ago or so. Yeah. And the discussion is always, “okay, how fast will it go? What will be the impact?” But just over the weekend, I saw the Perplexity Computer application. Maybe by chance you are familiar with that, but this is really game-changing stuff that’s happening every couple of weeks. So I think it’s really impressive what’s going to happen there.

Winn Hardin: [00:09:01] I agree. And you’re tackling the market from the end-user perspective. You know, it’s not from the data centers, you’re not making money purely on the GPU deployments and the data center development, which there are concerns about how long each of those iterations are going to last. Is that investment sustainable? But what we do know is the demand for AI is not going to go down. It’s only going to go up. And so, when you’re selling markets —— again, shovels to the gold miners…

Robert Franz: [00:09:22] Exactly.

Winn Hardin: [00:09:23] You know, instead of the gold mine itself. That has a long, I think, path.

Robert Franz: [00:09:28] Yeah, exactly. And vision is active in all these areas, if you think about it. Yeah? So we even have applications within data centers to monitor certain, sometimes quite secretive stuff actually, but it’s really interesting. You can be on different levels of that chain and benefit from all of them. And this is why, coming back to the first point, we also said, “okay, we should really consolidate our offerings under one brand to make it easier for our customers to understand what’s the full portfolio, what can we do for you?” And I think that we made a big step forward.

Winn Hardin: [00:10:00] So it’s interesting. You just mentioned a new application in data centers. Now, I’m not sure if that’s about asset management or if that’s workforce management or whatever the case is there. But can you tell us, give us a couple examples of the way machine vision is adding more capability, more flexibility to automation solutions than traditional. I mean, in the past, it was inspecting products. It was then maybe adding some eyeballs to a robot for guidance and better, efficient operations and picking accuracy, repeatability. But what are some of the new ways that machine vision is helping to make these —— the new automation systems?

Robert Franz: [00:10:38] So we see a lot —— I’m just thinking within that other 50% of the business, what’s not factory automation? ——  we see a lot in agriculture, for example. So, you know, you may have seen that it becomes very precise the way that you apply fertilizer and things like that. That is an exciting area for sure. And, I think, generally speaking, as everybody knows, in those areas where manual labor is hard to get these days, to automate there makes a lot of sense. Agriculture is one of the big areas in traffic management. We see many new applications coming. Interestingly it depends always a bit which customer and country are you dealing with? So the more Western countries, they tend to be a bit more hesitant in terms of monitoring traffic and are people wearing their seatbelt and that type of stuff. But there’s a lot of demand coming for sure in that area. Healthcare is always really exciting when you look into very deep cell analytics and things like that. We have some customers that do that. And, what is also interesting in that area is that you would think that the camera business, let’s say that traditionally has evolved around higher resolutions, higher speeds, different interfaces, blah, blah, blah?

Robert Franz: [00:11:52] That is still a very integral part of what we’re doing. So, besides all the solution stuff and looking at software and how do we bring all of that together, we’ll continuously develop new cameras with higher resolutions, with smaller housing, smaller footprint, a smaller energy consumption. That is still a key differentiator that enables some of the applications. And I think that that’s important to be understood. One good example for us is actually the SWIR shortwave infrared technology, where we are, I believe, number one globally. And, that is enabling applications that you wouldn’t believe. For example, in the wafer production, you can get through different layers of the wafer with that technology. And then you have also defense applications for SWIR that are very advanced that I cannot really talk about. We take good care that we are on the right side of the fence in these applications, of course. But, yeah, so technology is also moving ahead still. You know, this is not stopping on the level of, “it’s all about AI.”

Winn Hardin: [00:13:00] Right. And I love how you were dealing with—— Well, the first through-point of those application areas you were speaking about outside of the laboratory were all outside of plants. They were outside controlled environments, you know, which makes me think about the improved quantum efficiency of the cameras, which are allowing them to work in, you know, much wider illumination ranges, which is enabling all of that. And of course, may be a key component to robotics, mobile robotics going forward and things of that nature. And then you mentioned that it’s not just AI that’s driving it, right? And we talked about form factors and everything else, but is AI helping to move your cameras beyond the plant floor into some of those ag/tech areas, which is a market I’ve been very, very excited about for a number of years.

Robert Franz: [00:13:43] Yeah. I mean, one very concrete example is that last week we launched a smart camera that is actually moving AI to the edge. So you have the intelligence in the camera. And that’s a very nice addition to our portfolio. We developed that, by the way, together with our sister company LMI, so this is also making the best of the strengths of TKH Group. I think the key point around AI is, really, you have to bring it down to the specific application. I think to discuss it on the level of large language models for the user, that’s usually pointless unless how you use AI is kind of, “okay, I asked ChatGPT a question, then I get a smart answer.” If we are talking about industrial type of applications, you really have to go to the application level and understand, “okay, what’s the value of AI here really? What am I doing with this?” And I think that’s the key point, where we are further building up knowledge and to really serve our customers well in that specific application and not just the buzzword of “AI,” but what does it mean? How does it help you? And what I’ve learned early in my career is, at the end, in B2B, it’s all about, “can I measure it in dollars?” Or euros or whatever currency you prefer. So I have been able to spell out the return on investment. How does that lower the operating cost? That’s a key aspect for me always.

Winn Hardin: [00:15:06] Yeah. There’s no question, there’s no point in investing in the technology if it’s not going to give you an ROI and improve overall efficiency, add capacity, whatever is key to that particular customer segment. You just mentioned the new camera that you co-developed with LMI. Is that the open smart camera that I’ve heard about?

Robert Franz: [00:15:23] Yeah. So in the Allied Vision cosmos, it’s called the Alecs. And, yeah, this is exactly that camera.

Winn Hardin: [00:15:32] So define what makes it open.

Robert Franz: [00:15:36] You can use your own software. So whereas in the past you had some of our competitors, they basically give you a black box and there’s a camera and there’s software in it. Our camera, you can train the camera in the way you want. We also have software offerings. So if you want to buy our software —— and this is where you mentioned Gocator, this type of software comes in very nicely, of course, as well. And so it just gives much more flexibility for the user to use the product and come up with the solution that makes more sense to them. And we are not force-fitting them into something just so that our business model works.

Winn Hardin: [00:16:13] Absolutely. We’ve all sought for machine vision to move to a more modular design, a more open-source design. There’re so many good quality programs out there. And you’ve got a workforce who’s been trained in a certain area. It’s hard to make inroads, especially as a hardware supplier, if you’re not working in that particular environment, you know, whether it’s a Sherlock or a Cognex product or something else that has large market position. But before we move away from that smart camera, I’d like to—— I’m just kind of really excited about this. So we’re able to deploy AI deep-learning models to the edge. And I loved your point earlier that people think of AI in terms of LLMs. They don’t really understand that AI, when it comes to machine vision, is this new advanced pattern-matching capability that has fungibility, you know, has the ability to infer in gray areas and still be extremely accurate. So I think, in the general marketplace, there’s not a real clear understanding about how AI is being applied to imaging solutions. So back to your open-source camera, do you have a certain set of GPUs, do you differentiate different models, or is there anything else you want to tell us about I/O that helps to make it, again, a tool for many, many different types of applications?

Robert Franz: [00:17:32] So you have a lot of flexibility in terms of applications. Combinations with specific GPUs? I wouldn’t really say that. But you have many different applications, certainly more in the factory automation environment. But you can think of many other applications as well. And then robotics, of course, as you mentioned earlier, is certainly a big field of use moving forward. We are working with several large-name customers and it’s kind of interesting how they start to use it for purposes that we haven’t even thought about.

Winn Hardin: [00:18:06] Right now I only hear about those applications sitting at the bar at a conference, because everybody’s under NDA. Not that Robert will share or be at the bar! I just want to clarify that for everyone out there. But anyway, so we’re getting close to the end here. ’26 has already kicked off to be an interesting year globally, but what makes you most excited over the next year or two?

Robert Franz: [00:18:34] I think what I mentioned earlier, I think the key thing that I see, if I look at the industry, I think the prospects are very bright if we play it right. And this is something that’s really encouraging. And what I’m most excited about is, of course, where we have made that step of consolidation under one brand. And that’s a big step for us also organizationally. And I have to say, I’m really proud about what my team has been able to do in a relatively short period of time to bring this together. That makes a lot of sense. Other than that, I mean, we mentioned AI a lot. I think that will still be the driving force in many of the developments. Some of them will be difficult to predict from now until 12, 24 months or something. But, I think it’s important to not see that as a threat, but as an opportunity. And, yeah, I think that’s a key aspect for me, for sure. And then what I’m also excited about is, as I also mentioned earlier—— so our business is going really well. And this is always the basis for everything else. We are continuously improving our growth, improving our profitability, which then allows us to further invest into exciting stuff. So yeah, no, I’m very positive.

Winn Hardin: [00:19:44] I’m feeling good about that. That makes me … Q1 and, you know, going into Q2 here in the not-too-distant future, I think a lot of people are seeing a lot more activity than we’ve seen in the last couple of years. So I think it is exciting if we can all just keep it together and focus down on on doing good things.

Robert Franz: [00:20:00] Yeah. What is interesting is that we saw a lot of activity also in the last 2 or 3 years on the level of designs, and they come now to fruition. So this is also something that makes me very positive. And I think we gained some share there as well. But that’s really positive, again, compared to other industries.

Winn Hardin: [00:20:21] Fantastic. Robert, would you agree that a lot of the new customers that are coming to Allied Vision now are first timers? Or what percentage are they versus returning customers? The reason I ask this is, I was going to follow it up with a question. If you had advice for any kind of new entry into the marketplace, what would it be? As someone who’s been in the machine vision market for a little while.

Robert Franz: [00:20:43] I don’t know if I should give that type of advice! But, honestly, in our case, the level of new customers is actually increasing. We see also increasing opportunity funnels. So all these typical KPIs you look at. So we have more business with new customers than we have business with existing customers.

Winn Hardin: [00:21:07] Right.

Robert Franz: [00:21:08] Yeah. And so then you can calculate the ratio for yourself, in a way, but that is really inspiring, of course, yeah? And, a lot has also to do with—— and maybe that’s a piece of advice. I think it’s important to focus on certain segments. So the way that we are structuring our business is, on a certain level, we want to serve all segments and not be specific to anyone and not to exclude anything. But the more it becomes specific, the more you need to make some choices. And this is what I think we have done reasonably well so far, and we will further move in that direction.

Winn Hardin: [00:21:44] That makes sense. We’ve seen that for a number of years. I mean, this is a complex technology to be able to be turnkey-out-of-the-box to be able to solve complex solutions. You guys have to do a lot of engineering in the back end and help those customers get to where they’re trying to achieve. So, Robert, I really, really appreciate you taking the time to be with us today. It’s really been a pleasure. I know you’ve said you were on the road a lot, so let’s hope at least you’re home for another week or two. But I’m sure our paths will cross up in Stuttgart or somewhere else this year. So until that time, thanks again for being with us. If anybody has any questions for Robert or about Allied Vision, you can reach Robert directly at AlliedVision.com. You can also submit your question through whatever your favorite podcast platform is, where you watch “Manufacturing Matters.” You can see all of our past episodes at manufacturing-matters.com, and we’ll be sure to get those questions off to Robert. If you’re interested in being on a future episode [of “Manufacturing Matters”], don’t be shy about reaching out to us too. And until the next time our paths cross, thanks for joining us and we’ll see you soon.

Robert Franz: [00:22:43] Thank you.