In this episode of Visions: A Machine Vision and Automation Solutions Podcast, Cognex CEO Matt Moschner discusses Cognex’s acquisition of RealSense. This transaction marks Cognex's largest purchase and accelerates a shift toward AI-based, human-like robotic perception. RealSense’s depth-sensing technology and developer ecosystem complements Cognex’s industrial vision portfolio, enabling dynamic, mobile, and autonomous robotics across warehouses and other industries.

Visions: A Machine Vision and Automation Solutions Podcast, is the podcast for engineers, designers, integrators, and end users who want to keep an informed eye on the imaging and machine vision industry. Every Tuesday we will explore the latest in imaging trends, developments and solutions. Here you will find interesting, useful insights and observations from expert interviews, solo episodes, even the occasional panel discussion, all of which aim to expand your knowledge on imaging and machine vision.

Related: Cognex to Acquire RealSense

Transcript

Well, hello and welcome to Visions: A Machine Vision and Automation Solutions Podcast. I'm your host, Jim Tatum, senior editor of Vision Systems design and Visions is an Endeavor Business Media production from your friends at Vision Systems Design. Here you'll find the latest on everything from end user machine vision solutions to trends, developments, and perspectives on all things machine vision and imaging. Whether you've been working in the industry for a while or you're just starting to take a closer look at it, this podcast is designed to grow your knowledge and bring greater focus to your understanding of the imaging and machine vision industry. And now on to our show.

Hello everybody, and welcome to Visions. Today. We are especially pleased to have the opportunity to speak with Matt Moschner, CEO of Cognex, about Cognex's acquisition of Realsense. This, of course, is a very big deal in our industry, so we are excited to learn more. Welcome to Visions, Matt, and thank you very much for joining us today.

Hey, Jim. Happy to be here.

First, if you could just give us a quick overview of the of the deal, how it came about, what drove it, what you believe it will ultimately mean for Cognex, Realsense and the machine vision industry in general?

Yeah. Thanks, Jim. Yeah, it's a big deal in the industry, I agree. And big deal for Cognex, our largest acquisition ever by dollar value. Big move for the company. And you know, as we think about these things, we really think about, you know, were we ready for it? Is it a market that's attractive in the ways that we define that and is the target, you know, a leader leader technically, but also from a market positioning standpoint, I think this one checks really all those boxes, right. From a Cognex standpoint, you know, we're, um, we're pivoting our strategy really more fully towards an AI based approach to vision, right? And we have for the last many years, and that's really hitting its stride as we take our AI strategy across more and more of our product portfolio. It's driving great progress in terms of new problems that we're able to solve. It's really lowering the barrier to adopting a vision more broadly. We're seeing great, great momentum in the core business, and for us, that really gives us the flexibility and great momentum to make bigger swings in new adjacencies. Right. And this is really a new adjacency for us in robotic perception. We've been long admirers of RealSense, I would say, you know, as those of us that that have been around the industry have seen realsense technology over the last ten years, really taking share and proving itself and really at scale. And so, you know, we've engaged with the team for many years and really saw the technology that they use as advantaged. And so when the opportunity came up to work more closely with them and acquire the business, we leapt at it and really was born through, you know, relationship building. Right. And a mutual appreciation, I'd say, on both sides of the technology and culture, right. Which is really important to Cognex how they work and how we work, and the opportunity in a shared alignment on the opportunity that we have in front of us. So, you know, that's really how it came together. Big deal for the company. But I think, you know, Cognex is it's a great time for us to be broadening the market that we serve. Great, great market to enter, which is robotic perception as we're seeing more and more use cases and just a world class organization and technology in real sense.

Okay, great. Well, to follow up with that, how exactly will they augment what you guys are already doing? Yeah. Where does the rubber hit the road, I guess is the way to put it.

Yeah. Great. Great question. So again, it's really a new set of applications for us, right? If you think of where Cognex machine vision and really most machine vision has been deployed today, it's what I like to call more static discrete automation, right? Where we deploy vision within machines or on lines that are kind of performing these very repetitive tasks. Uh, and you know, what we've observed for the last many years, frankly, is a new kind of automation that is existing around those lines, which is dynamic, often mobile and increasingly autonomous robotics. Right? And these are various types, fixed arm types, AMR types, you know, even obviously now humanoid and quadruped types and other types, other form factors. And, you know, that requires a very different style of vision. And I can get into that, but, but we really saw that style of automation, which is kind of directly next to the automation that we sell into as really catching fire and getting scale right. And real sense is really the leader in that style of vision perception. Great opportunity for us to join forces and go to market together. Um, and, you know, good, good technical fit, I would say between the two companies, great cultural fit. And then, you know, a lot of overlap in terms of the customers that we would serve.

Yeah. Well, with that, what kind of new opportunities are you seeing as a result of this?

Yeah, as I mentioned, I think it's this new style of automation that's built on, um, more dynamic, um, often mobile and autonomous robotics. And there's so much that has gone into that. Like why now? I think those problems always existed to be solved in warehouses and factories. But technologies, as it relates to motors, drives, batteries, sensing, but also, you know, the brain, as they say, that which is often these very advanced vision language action models, these villas that are sort of maturing. And so I think these robotic systems, um, are just, you know, the tech stack that underpins them is becoming much more mature. It's becoming much more hardened and it's scaling as a result. Right. I think of, you know, in what was it, 2012 when Amazon bought Kiva Robotics, everyone was kind of like, well, what's that all about? Like, what's an AMR? How is it going to work? It's not such an exotic robotic type anymore. Very broadly adopted. And, and so it's really, it's really that observation, which is there's this new kind of automation in mobile autonomous robotic systems. And we saw that the type of vision that we are deploying today, um, was very different than that. And we saw that. But at the same time kind of very similar at an underlying level optics, embedded processing, vision processing, things like this. And, and, you know, we saw an opportunity to work with the market leader, uh, as a way to get better exposure to that emerging segment.

Yeah. Okay. Yeah. Okay. Wow. Um, well, from your perspective, what sensing and perception capabilities are still missing from today's robots and how do depth sensing technologies like Realsense bridge that?

Yeah, no, I think just like a human being, right? It also we have many senses. Sure. Um, and, but vision, arguably a very critical piece, particularly when you're moving around and changing dynamic environments. Uh, and so, you know, in that sense, vision, um, on these robotic systems was always kind of a gap in our opinion. And I think in reality, and it's a pretty hard problem to solve, right? Because if you think about human like vision, it's a pretty amazing system. We have in our heads very wide fields of view, very long working ranges, great tolerance to ambient lighting, indoor lighting, outdoor lighting, you know, very fast acquisition, if you will. And so if you think of that in traditional machine vision, that's not how those systems are. Systems are really optimized for. And so what's neat about the Realsense technology is it's very much oriented more to like human like vision, wide fields of view, long working ranges tolerant to ambient lighting and high acquisition speeds and the right accuracy, not pixel level accuracy, not high, but the right level of accuracy. And so I think perception has been a missing piece in robotics. And as that problem is getting solved largely with realsense technology, and the other pieces are coming together, battery technology motors and drives the brain of what the robot is actually meant to be doing, things like Vslam and other localization software. All of that's maturing at the same time. I would say the market demand is improving. And what drives demand? It's labor cost, it's labor scarcity, it's quality. It's a desire to get more from existing facilities, which really is driven in many respects by the cost of capital and the cost to borrow. And interest rates are high and expected to remain high. So it's kind of like all those things coming together. On one hand, the technology stack of these advanced robotic types is maturing perception being really important. At the other side, the demand side is there. So really interesting time. Yeah, I would say wow. Yeah. Well, let me ask you this. Many manufacturers already deploy 2D and 3D vision systems for inspection and guidance and things like that. How do you see the robotic perception thing evolving beyond traditional machine vision applications? Yeah, we think of it. It's a it's an and not an or right, which is like, these are a new type of applications that will exist in addition to the traditional types of 2D inspections and 3D 3D guidance and 3D measurement. And, um, and again, I think of these systems as doing very different things. I like to, at the simplest, I like to describe it as, you know, our Cognex and Cognex vision, traditional vision is really meant to engage with a specific product or part in a very repetitive way, high accuracy kind of way. And this new style of machine vision perception is, is almost the opposite. It's meant to avoid things, avoid obstacles, not collide into things, and navigate a scene that's constantly changing. Uh, and so if you think of the requirements for traditional vision, the requirements for this new style of robotic vision are very different. Um, again, built on common technology, but very different requirements. And we view those new applications as really adjacent and an addition to traditional vision, not in replacement of.

Yeah. Well, would you say this acquisition is pretty much the start of a broader industry shift? Um, and what capabilities do you think you'll expect to see to find the next generation of vision companies?

Yeah, I think it is. Yeah. I think it's a really exciting time to be in vision for so many reasons. I think I think in the applications we've served for many years, I think there's it feels like we're, we're kind of at an inflection point for a number of reasons. And this new style of, of robotic perception, I think is a whole new segment of vision that is, I think in the very early days and kind of on the cusp of growing very rapidly. And then, you know, it's really interesting. We're really focused within the four walls, deploying vision in industry. But real sense, the truth is today and we're dynamic robot and mobile robotics is going in the future is within the four walls, but even outside the four walls, right? In new industries. And so for us, even that's, that's probably not a near-term focus, maybe medium long term. It'll be very interesting to see how do we get vision technology Cognex vision potentially outside of the four walls into your home? Um, you know, in industry that exist outside like agriculture and mining and, you know, other sort of automation opportunities outside of manufacturing and warehousing. So, and again, this style of vision is much more amenable to that style of diversification versus today's vision, which is very much optimized for, for the industrial, um, process.

Yeah. Okay. Um, just a quick one more from my perspective, I ask this a lot. Um, how does one differentiate between fad and future?

Yeah. Yeah. It's a good point. Well, as I mentioned, um, in this area, we've been, we've been watching it for many years. Right. So, uh, you try not to get too addicted to the technology, which is very interesting and very easy to, uh, to fall in love with. But what we look for is, um, deployments at scale, right? Often what you see in emerging automation areas is a lot of experimentation, which is great, right? Where whether it's the academic community, whether it's research labs within companies, consumers that are, you know, experimenting in their free time. That's, you know, that's the early makings of what could be something new and real sense has a great solve for that with their developer ecosystem that they've developed. It's very easy to experiment with a real sense system. They make that experience really nice. But then eventually what you want to see is a proof of concepts. Go into real deployments, and then those deployments go to full network scale outs. And, um, yeah, and that's, I think where we are with this style of robotics, right? Where maybe the last four or five years has been experimentation and validation through proof of concepts. But we are seeing, you know, full scale deployments of these, of this style of vision enabled robotics. And that's what gives us the confidence that this is likely not a fad. Um, and then the other thing, which is very much relevant to our, our existing business is, um, and really any B2B business is you have to, you have to show that you can make money, right? That, that style of automation has an ROI, right? Whereas, you know, in consumer products, you're kind of trading on more emotion and brand equity. In our business, you're trading on ROI. And so there's also this element of when does the technology meet the hurdle rate of whatever the problem it's trying to solve. And for us, the ingredients of return on machine vision are often, um, throughput. Can I run my line faster? Um, quality. Right. Can I lower my cost and occurrence of poor quality. Um and labor cost savings. Right. Does this let me or labor shortage mitigation. Right. Does this help me better manage the labor that I have. Uh, the human labor often in my facility. So, you know, you kind of look at what is the hurdle rate for those things? What's the return expectation? And then at some point it is met or exceeded and the market kind of tips over. So that's how we think about what's trying to separate fad from from what's actually real.

Yeah. Certainly I don't want to suggest anybody's, you know, buying into Betamax or something like that. Yeah, yeah. But yeah, I often wonder, yeah, you got something like automate and there's just so much, you know, for lack of a better term, cool stuff everywhere there is. How, how do you deal?

It's a lot of noise. Yeah, it's a lot of noise. And um, yeah, so it's, it's hard. And sometimes you have to make bets, um, that you don't fully know, but you know, for us in this, in this deal, what, what was nice about Realsense is they have a bit of a mixture of both, right? On one hand, their existing business is very much driven by what I might actually call mature robotic applications in, in, in our, you know, we and then and then they also have exposure to, you know, more speculative, you might say humanoids, quadrupeds, which are still kind of early. It's hard to say what the future holds on there, but we didn't have to rely on that market really at all to write the business case for this acquisition. We could write it on the back of more established robotic applications that, you know, for years have deployed in scale and, and those that upside, if you will, for us, is really if some of those more advanced types actually do catch fire and scale. Um, so, so it's nice to be able to have both the comfort of a mature market, but the upside potential of, of an emerging market.

Yeah. No, that makes sense. Um, okay. Well then I guess to sum up, you know, given that you guys are investing what, 500 million in this deal, um, what does that tell us about where the industry, the market is headed over the next five years?

Um, yeah, I mean, I, I think clearly we, we believe this new style of automation is, is here to stay, uh, that the tech stack is proven, uh, that customers are buying into it, that we think it has many years of good growth. We estimate that the robotic guidance and perception market is about six hundred million today. It could be growing to one point five to two billion in three to four years. So that's really what I think your listeners should take away. Cognex believes that robotic perception and these robotic systems are, are really the future of, um, or really a very new style of automation that's here to stay. But I'll just repeat, I think we don't view it as an either or. I think it's in addition to the traditional style of vision on more discreet flow style of manufacturing. What's exciting is both of those things I think can coexist. We want to serve customers across both of those areas and. And we see that as key to our long term growth ambition for Cognex.

Well, that's a wrap for this episode of Visions, produced by Endeavor Business Media, a division of endeavor B2B. Thanks very much for tuning in. If you enjoyed today's show, be sure to subscribe to the podcast and share this episode with a colleague who would find it helpful. Until our next episode, you can find us at vision dash systems dot com or on LinkedIn, Facebook or X for more insights, updates, and breaking news to keep you in the know. Thanks for tuning in. Until next time, stay focused on your visions.