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Drilling down on John Deere, Climate Corp. deal

John Deere is known for big rigs like this new 9R series machine but technology is also a big part of the mix and the company expanded its reach today with the Precision Planting news
<p>John Deere is known for big rigs like this new 9R series machine, but technology is also a big part of the mix, and the company expanded its reach today with the Precision Planting news.</p>

The dust is still settling around my office after this morning’s announcement that John Deere was buying Precision Planting from Monsanto. Sure there’s some shock and awe, but as you drill into the deal there are some wins for everyone involved. Of course, the winner most important to both big companies is the customer, who will view this news through the lens of their work with either company. But here’s a breakdown of what we know after some conference calls and conversations through the day.

The key word that keeps coming up is “seamless.” The aim is to have a seamless connection between your John Deere machine and the Climate FieldView product. John Deere has long has and ‘outgoing’ application program interface that farmers could use to capture information from their machines into the data collection system of choice – including Precision Planting and FieldView.

We talked with Cory Reed, senior vice president, Intelligent Solutions Group, John Deere, who spoke to us after a meeting he had with folks at Precision Planting in Tremont, Ill. He notes that the company’s long time position has been to “give customers choice for whom they want to do business with and connect to for agronomic advice.”

He explains that with this new agreement allows the two-way data communication for current and new customers, which offers Climate FieldView users the opportunity to maximize their data gathering, and use, for the future. He explains that the company has developed communication tools with more than a dozen other companies allowing access to John Deere systems.

Mike Stern, president, Climate Corporation, during a corporate conference call, explains that Climate FieldView is part of the “data driven farm of the future.” And he notes that the company is poised to work toward managing the untapped potential of data. “As part of the transaction, [we will] build off the data connectivity through Precision Planting monitors for a broader customer base. This agreement is mutually beneficial to Precision Planting and Climate Corporation,” he says.

John Raine, with Climate Corporation, also clarified the data relationship with this enhanced linkage. “Our guiding principles have not changed at all. First any data generated by the farmer, the farmer owns it; second if the farmer chooses to work with Climate, we have a fiduciary responsibility to show how we’ll use it; and finally if they want do delete their data from our system, they can do that at their discretion,” he explains. “This agreement does not move data from Climate Corporation into Monsanto. Our data privacy agreement is between Climate Corporation and the farmer and we take it very seriously. The arrangement with John Deere simply enables data to flow to the [cloud] that is the farmer's choice.”

What did Deere buy?

John Deere’s purchase included all of Precision Planting – both equipment and hardware – except for the FieldView system. That system, which is built with intelligence and tech from Climate Corporation remains as part of the original company. Meanwhile the tools farmers recognize as Precision Planting products from vSet planter motors to the 20/20 SeedSense system now are owned by John Deere.

“There are three parts to the transaction,” Reed says. “First is the acquisition of Precision Planting. Second is the connection between Climate FieldView and MyJohnDeere and the maintenance of that connection and our position is we’ll connect to everyone. And finally connection via an application program interface providing a seamless connection between John Deere Operation Center and Climate FieldView.”

Precision Planting will operate as a standalone company and continue to provide products and services to customers as it has before. Reed talks about the group’s innovation and how John Deere wants to maintain that innovation and encourage it in the marketplace. The subsidiary will be part of the overall John Deere Intelligent Solutions Group, and he notes they want this group to “innovate as quickly as they can.”

Having the Precision Planting product line available this way also offers John Deere the opportunity to market products to all brands, but also serve legacy customers with these innovations. Reed says this acquisition provides the company “broad access across the market for older John Deere equipment and competitive products.”

There’s one interesting question we asked Reed. Both Agco and Case IH have entered into technology agreements with Precision Planting in the past few months (Case IH in 2014 and Agco in 2015) and would those companies proceed? Reed would not speak for either company but noted that it is “our intent and commitment to honor those agreements. The Precision Planting brand is there to serve all makes of equipment, and build those relationships,” he says.

NOTE: Late Tuesday, Agco issued the following statement concerning the Deere purchase of Precision Planting:

In a press release issued [Tuesday], John Deere announced they have acquired the Precision Planting assets from The Climate Corporation. This development has not changed Agco's strategic plans to move forward using specific Precision Planting components on White Planters. Agco will continue to develop the best options in both planting performance and data management through our open Fuse Technologies approach and through our strategic partnerships with Precision Planting and other major industry experts such as Bayer, DuPont, BASF, Connected Farm and Slingshot.

Reed spoke to us from Tremont, Ill., which is home to Precision Planting. “I’ve just come out of a leadership team meeting and they’re excited. They’re a separate brand but they know the legacy of innovation at John Deere. We want to continue to fuel what they’re doing. It’s a very bright future.”

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