08/06/2014

Factory of the Future and Where Machine Vision Solutions Fit In

I am posting this blog from the Austin Convention Center, home to NIWeek 2014, National Instruments’ rather elaborate annual partner conference. It has been an interesting two days for me at the event, where I’ve had the opportunity to gain some insight into the company’s (embedded) vision for the future, both its own and that of the industries it serves.

NI’s keynote address from earlier this morning was particularly noteworthy and thought-provoking. With a goal to showcase its innovations and partner collaborations, National Instruments made its big picture pitch to a fairly captive audience by calling on stage some of the company’s strategic partners and customers such as Airbus, National Grid and Intel, to name a few. Given my coverage focus on the data capture and machine vision solutions markets, the presentation segment that caught my attention was all the talk surrounding the Industrial Internet of Things and NI’s collaboration with Airbus in building the “factory of the future”. It is essential to note that the growing need for factory automation and systems integration is bringing down silos like never before. Sensors, actuators, and other components are not the whole in itself, but essential parts of the overall embedded system that addresses mission critical application requirements.

The same is true with machine vision cameras. While they continue to become increasingly important to the automation solution, their use for isolated applications will not be what drives adoption and use. Cameras and vision sensors will help facilitate specific tasks (such as 100% quality control) and be part of the connected device paradigm within the manufacturing shopfloor, providing vision-based intelligence over digital networks that help design, produce and deliver high quality products cost-effectively. Industrial automation of the future will cease to be discrete in nature, evolving into a more software and analytics-driven operation that works optimally with input from a wide range of sources – leading to cost savings and improved performance.

I believe global manufacturing is bound to shift away from an “agile” and reactive model to one that leverages the millions of terabytes of data generated via sensors such as cameras to more accurately predict future production requirements. That, in a nutshell, is going to be the driving force behind the "factory of the future", where the solution itself is component-agnostic, but which makes use of the massive volumes of data to enhance operational efficiencies, minimize waste, and maximize production. In keeping with the theme, VDC Research recently published market estimates and forecasts for the global machine vision landscape (hardware, software, and services), expected to grow at more than 7% through 2018. Get in touch with us to learn more.

07/07/2014

Asia Trumps the Americas and Europe in Barcode Printer Investments in 2013

For the first time ever, Asia-Pacific trumped both the Americas as well as EMEA as the region accounting for the largest revenue share in 2013. VDC sees this as a direct reflection of the pickup in the Chinese manufacturing sector in the past 12 months, a result of its government’s diligent efforts to tackle slowing growth in the world’s second largest economy. Growing reliance on logistics service providers to get products to the final consumer on time coupled with their rising need for automation will also help spur continued investments in the near future. Industrial printer sales contracted 5% year-over-year in North America because of users’ increasing investments in lower cost desktop options that are well-suited for deployment across several application environments. One of the industry leaders was particularly impacted by this trend, leading to a significant drop in sales in the region. The European market looks set to come out of its slump of the past few years with the region experiencing a high single digit growth over 2012 backed by a stronger than expected economic revival.

In terms of market penetration, VDC expects enterprises competing in and servicing the transportation sector to drive barcode printer investments, with the vertical’s growing focus on automation and utilizing data capture solutions for everything from packaging to last mile delivery. Healthcare continues to be an attractive vertical, particularly in North America. Label printer adoption and use will rise considerably in this market given how there now are more patients, assets, and drugs that require labeling, via product tags, wristbands, and inventory labels. VDC does not expect this market to reach critical mass anytime soon, especially given how digitization – of records, patients, inventory – is a recent trend born out of evolving government regulations and mandates.

While we do not anticipate growth rates to scale new highs in North America and Europe, there is much for vendors to capitalize on in terms of regional and vertical market opportunities. To learn more about our global thermal barcode printer market coverage and how to gain access to the research, click here.

An Acquisition Worth the Cost: What Makes Cognex an Attractive Target

Cognex Corporation, a company specializing in machine vision and imaging products, has emerged as an industry leader in recent years. VDC just published a report that analyzes the company’s financials, product offerings, and future prospects, positioning it as an attractive, albeit expensive, acquisition target. Specifically, Cognex is recognized for its engineering focus, strong vision-related IP, product development innovation, expanding ID products business, and its growing presence in the logistics vertical.

Cognex’s gross margin is consistently among the highest in the industry, and it has seen a 9% revenue growth from 2012 to 2013. The company’s imager portfolio is growing in conjunction with the overall barcode scanning market and the global rise in automation investment. We sense Cognex’s acute interest in expanding into logistics, with the vertical’s growing focus on automation and utilizing data capture solutions for everything from packaging to last mile delivery.

Cognex’s leadership position, brand name, global reach, broad solutions portfolio, vertical market expertise, and a strong partner network make it a potentially valuable addition to certain engineering organizations. However, acquiring Cognex will come with its own unique set of challenges. The company’s market capitalization is at an all-time high of $3.3 billion, due to its strong performance in the industrial sector, especially over the past 18-24 months. VDC expects only organizations with deep pockets and/or access to significant amounts of capital or debt to even consider purchasing this company. Additional risk comes with Cognex’s dependence on the cyclical manufacturing sector. While the outlook is largely positive for the near future, this sector is prone to periodic weakness and has a high propensity to be impacted by global economic fluctuations. There is also considerable room for improvement in Cognex’s professional services portfolio, which make it rather reliant on its partner network.

Continued interest in and adoption of automation solutions to solve operational challenges and enhance supply chain visibility will spur camera-based product sales into the foreseeable future. VDC expects to see increased demand for machine vision solutions in non-manufacturing environments, which bodes well for Cognex. We firmly believe the company is poised for success, and well-positioned to capitalize on current and emerging opportunities, backed by its strong product portfolio and a keen focus on application engineering.

The full content of this VDC Views, Cognex as a Takeover Target, is currently available to all VDC clients on VDC Connect (www.vdcconnect.com).

(With significant contribution from Rachel Zacchea, Research Assistant)

06/20/2014

From the Last Mile to the Last Meter – VDC’s Vision for Augmented Reality in Logistics

At VDC, we are fascinated by the “last mile delivery” conundrum confronting logistics service providers today. A boom in ecommerce sales coupled with the retail omnichannel challenge make for interesting times. In our previous blog, we discussed the issues parcel delivery organizations face during the final stages of the delivery process, the only step in the supply chain where they directly interact with the end consumer. Inefficiencies in packing procedures, less-than-optimized delivery routes, and problems in locating a package’s final destination among others, all contribute to disproportionately high costs and frustration for shippers, which are then passed on to irate customers. While traditional barcode scanners, RFID readers, and connected mobile devices are already used as part of the broader logistics automation solution, VDC believes service providers will continue to seek new technologies that enhance operational efficiencies at every point along the last mile. In particular, augmented reality devices such as Google Glass have the potential to revolutionize this last step in the logistics supply chain.

We recently came across this fascinating new report published by DHL outlining the role that augmented reality will play in logistics, with a focus on the warehouse environment. By using wearable devices such as Google Glass warehouse workers will be able to more efficiently locate products that need to be shipped, while reducing the possibility of errors. These devices will also allow warehouse workers to more efficiently stack goods on pallets and organize pallets in delivery vehicles to help prevent damages and reduce wasted time. Having warehouse “pickers” utilize wearable technologies rather than handheld devices would also allow them to more easily perform tasks using both arms. At the core of these new technologies are camera-based solutions which enable a wide variety of tasks detailed later in this blog. In addition to their high tech capabilities these solutions could also replace traditional handheld barcode scanners, providing a truly all-in-one solution.

This report also explores the possibility of augmented reality enhancing the delivery process and boosting efficiency at the “Last Meter”, after the truck driver has the correct package in hand and is on his way to the recipient’s doorstep. If a driver is unfamiliar with the area, simply finding the correct building or house number could be a challenge and result in wasted time. Wearable augmented reality devices would allow delivery personnel to have access to maps and directions right in front of their eyes, all without the added hassle of handheld/portable GPS devices.

My conversations with the systems integrator community at MODEX earlier this year indicate that one of the more pressing issues for logistics service providers during the last mile of the delivery process is the liability associated with damaged packages. This is relevant today more so than ever because of the explosion in the sheer number of parcels that these organizations ship and transport every single day across the globe (running into the billions). Many times, it becomes hard to determine who to indemnify for damages incurred, especially given the many stages in the order fulfillment process before the item gets to its final destination. VDC believes this can also potentially be addressed with solutions leveraging camera technology, such as these all-in-one wearable devices. Here’s how that would work – the parcel delivery company captures an image of the package at every stage in the shipment route, which can help determine when damages occurred, thereby easing the liability and claims process for the retailer, shipper(s), and consumer. Recent advancements in software application development for Google Glass-type devices could well enable them to support a broad range of functions such as order picking, navigation (both within the warehouse and outside), traceability and identification, and image capture.

It will be some time before augmented reality solutions materially impact data capture technology sales, but VDC believes products such as Google Glass can make traditional last mile processes obsolete. Cameras will be integral to these wearable devices, facilitating both barcode scanning as well as image capture applications. From VDC’s viewpoint, this represents a tremendous opportunity for third party hardware vendors, such as those for barcode imagers and machine vision solutions, looking to supply the logistics industry with the future of efficient last mile technology.

(With significant contribution from Michael Sack, Research Assistant)

06/03/2014

Data Capture and the Race to Shorten the Last Mile

With an ever-growing volume of e-commerce sales consumers, retailers, and parcel service providers have all come to realize the glaring inefficiencies in the so-called “last mile”, the last leg of a package’s journey from the distribution hub to the customer. Hermes Europe, a multinational group providing full-service supply chain management solutions headquartered in Germany, published an article on last mile delivery in the first issue of their company magazine, Hermes Wing, which piqued our interest. According to the article, at least 50% of a parcel service provider’s total costs occur during this part of the delivery process. The article reveals that the main reason for these high costs is that only about half of all packages shipped reach the recipient’s residence on the first attempted delivery. Not only do these inefficiencies lead to unnecessary shipping costs, but the wasted time and increased consumer frustration reflects poorly on sellers. Shifting global population trends will only magnify the inadequacies of traditional delivery processes. With 60% of the world’s population expected to be living in urban areas by 2030 new methods are being developed and employed to more efficiently serve these large population centers.

The article cites examples of logistics projects in various cities in Europe that seek to enhance operational efficiencies and optimize the delivery process. In the Netherlands, for instance, a new method is being used where retail purchases are delivered to central distribution warehouses in eleven city centers across the country. In Paris, Hermes has begun using tricycles capable of carrying 180 kilograms of cargo, while in Austria over 5000 “pick-up” boxes belonging to the Austrian post office are being used to ensure that packages are not sent back to distribution hubs. These new methods of shortening the last mile will require significant upfront investments in infrastructure and equipment, and there will certainly be a rise in demand for and deployments of data capture devices to facilitate tracking. It is also important to recognize that the vast majority of consumers are not looking for “same day delivery” and a sharp increase in the overall speed of the delivery process. In fact only 1.6% of consumers surveyed by ECC Cologne and the EHI Retail Institute cared about same-day delivery. However, 75% of those surveyed wanted to be able to track their packages live.

While data capture technologies are already well-entrenched in the supply chain, and widely used to allow consumers to check on the status of their package at a series of check-points during the delivery process, it would be an added bonus to enable package tracking in real time. AutoID solutions, including barcode scanners, RFID readers, and mobile devices, are already able to capture information when packages are transferred from trucks to distribution hubs and vice-versa. In lieu of taking on the cost of tagging individual packages with real-time location sensors, retailers and their logistics partners will benefit from enabling customers to track delivery vehicles carrying their packages, especially after they have left the final distribution center. Allowing consumers to know the exact arrival time of their package would effectively shorten the last mile, thereby reducing costs and frustration for sellers, service providers, and consumers.

Over the past couple of years, we have seen retailers embrace the omnichannel retailing paradigm, making their brand and product available to the target consumer base across a wide range of avenues – both online and offline. We have also seen how retailers that cannot or are unwilling to support and facilitate customer engagement through more than one medium are at a significant disadvantage compared to the competition. Tackling the potential logistical nightmare of “last mile delivery”, particularly in peak shopping seasons, via enhanced customer interaction during the delivery process – facilitated by data capture solutions – could well usher a new age of retailing and overall customer contentment.

(With significant contribution from Michael Sack, Research Assistant)

04/28/2014

It is all about Retail for Zebra Technologies

Company takes a big risk in anticipation of big rewards

Investors turned their heads on Tuesday, April 15th when Zebra Technologies (Zebra) announced its $3.45 billion acquisition of Motorola Solutions’ (MSI) Enterprise division. This will be an all-cash transaction, with $200 million directly from Zebra’s coffers, and the remaining being financed largely via debt. The market’s immediate reaction to this announcement was an 11 percent drop on the NASDAQ, bringing down ZBRA’s price per share to $60.77 from close to $70. Following the shock, brought about by significant upfront cost, investors seem to be now taking a look at this acquisition as Zebra seizing an opportunity to promote long-term growth.

A surface account of the deal might focus exclusively on the benefits Zebra will derive from further expanding their AIDC portfolio. This is a perfectly valid assessment; Zebra, a barcode printer market leader, to acquire MSI’s Enterprise business unit, a barcode scanner and rugged mobile device leader, creating a one-stop shop for those in need of AutoID solutions. VDC has, however, identified another, perhaps more significant, objective of Zebra’s: to further increase its retail market presence.

Zebra seems sure about where future growth will come from

As we discussed in February, acquisitions that Zebra has made over the past year have marked its first steps towards a non-printer-focused solutions play in the retail space. The company began 2013 by purchasing StepOne Systems, a small firm addressing retailers’ in-store application requirements via mobile software solutions. Zebra’s next move in this space took place in December, 2013 with the acquisition of Hart Systems, a cloud-based inventory management solution provider. The company’s “Hardware-as-a-Service” business model involves renting out self-managed inventory solutions, including hardware, to retailers rather than selling them at a fixed price. This presents an interesting solution particularly to the refresh cycle issue facing Zebra’s core hardware business. VDC wouldn’t be surprised if, in the near- to mid-term, Zebra extended this option to its printer customers as well. By implementing this model, the company can now have the opportunity to cut production costs and also boost sales by providing clients with more up-to-date solutions on a periodic basis, all for a recurring fee. Both these 2013 acquisitions clearly indicated Zebra’s push into the retail storefront.

The company successfully outlined its growth strategy in its FY 2013 earnings conference call, and that, coupled with its growing retail focus, seemed to resonate with the investor community. The stock crushed lifetime highs, going up more than 30% in 3 months. With an all-round positive response to its vertical strategy, it seems that Zebra stands firmly behind its retail expansion efforts, which brings us to the company’s latest, multi-billion dollar, acquisition. We believe that this will benefit Zebra not only by allowing them to become a one-stop shop for AIDC solutions, but by also furthering their presence in the retail vertical. In a space where brand recognition and a developed partner ecosystem are key, MSI’s (and erstwhile Symbol’s) colossal brand and strong channel connections will greatly benefit the coalesced superfirm. Additionally, Motorola’s handheld barcode scanner and mobile device portfolios will allow Zebra to simultaneously move further to the front and back of the retail store. The ruggedized component of Motorola’s data capture devices makes them an equally attractive option in logistics and direct store delivery (DSD) types of applications, while also being critical in-store – both at the aisles as well as at the POS checkout stations. Combined with Zebra’s current product offerings, we can see a more holistic end-to-end product line that can all be connected by one of their more recent endeavors, channeling the Internet of Things (IoT) paradigm, Zatar.

Given the nature of this vertical, technology vendors competing for retailer mindshare are expected to “keep up” in order to subsist. This drives us to anticipate that Zebra will update and refresh Motorola’s scanners and mobile computer hardware to keep up with the times and industry demand for next-generation data acquisition solutions. Despite the massive debt and significant toll on cash reserves, VDC anticipates an auspicious future for Zebra. As evidenced by the multitude and strength of distribution channels, broad product portfolio, and current penetration of the retail space, these technology powerhouses could together very well dominate the retail solutions space.

You can download VDC’s latest Research Note featuring a comprehensive breakdown of the acquisition, here.

04/23/2014

How IoT Could Fuel the Next Generation of Data Capture and Asset Traceability

This past week has been all about Zebra Technologies’ acquisition of Motorola Solutions’ Enterprise business unit and what it means for the global AutoID & Data Capture industry. You can download our latest research note, featuring a comprehensive breakdown of the deal, here. Zebra’s executives have consistently cited the Internet of Things or IoT phenomenon, powered by their home-grown, cloud-based software platform, Zatar, as the bridge to tie the company’s existing product portfolio with that of MSI’s. Given the buzz surrounding this topic, at VDC, we have put together a two-part blog series where we discuss IoT as a concept and Zebra’s big bet on Zatar, and enabling Enterprise Asset Intelligence. This is Part 1.

So, what is IoT all about? Simply put, the Internet of Things (IoT), or Internet of Everything, is a web of connected devices that allows for remote monitoring and control. Sensors send off signals with information about asset location, identity, and condition that can be read by a supported device to enable enhanced visibility and monitoring. These supported devices can then relay signals in order to remotely control appliances and adjust their settings. IoT use is not restricted to supply chain traceability and monitoring; it has just as many uses in the consumer world as well.

Incorporating IoT and device connectivity in the enterprise world enables a wealth of new possibilities. Organizations’ networked IT infrastructure is no longer limited to PCs, laptops and data centers. Large-scale employee adoption of internet-connected mobile devices for personal consumption (smartphones and tablets, among others), has opened up the floodgates. With companies increasingly embracing the Bring Your Own Device (BYOD) trend where employees can use these personal devices for business purposes, this concept becomes integral to the IoT phenomenon. Specialized applications and websites give employees’ devices access to all of their company-specific needs. There is growing interest in deploying, managing, and securing these always-connected devices. Internet pervasiveness and the ability to embed sensing technology into all types of assets are helping drive IoT investments.

However, with IoT adoption comes concerns surrounding network security and data integrity. BYOD can be detrimental to employee productivity and many companies are skeptical of integrating it into their current business methods.  Security is another main concern, deterring organizations from fully committing to the “enterprise IoT”. Employee devices will have access to sensitive information and are more likely to be stolen or lost than devices that never leave the company premises. Personal devices are also likely to come in contact with insecure internet connections outside of working hours making them more susceptible to cyber attacks. Cyber security is a hot button issue, especially after the recent attacks on Target and Neiman Marcus, which prompted a Senate hearing on the subject. Companies will be wary to open themselves up to more attacks until IoT can be proven to have sufficient security measures in place.

IoT has already been integrated into our everyday life where security is viewed to be less of an issue. Smart devices can be turned into universal remotes for almost every device around the home. Consumers can start their car, brew a pot of coffee, change the temperature in their house, and turn on the news, all from their phone, for example. This form of IoT is viewed as less of a security risk, at least for now, because of the nature of devices (mostly household appliances) communicating with each other. Google’s $3.2 billion acquisition of Nest, a home automation company, is the biggest indication of growing interest and investments in the “in-home connected devices” paradigm.

From VDC’s vantage point, IoT has the potential to completely change enterprise as we know it on all levels – from source to consumption. It broadens the sphere of control for managers so they can see the real-time status of products as they make their way to the retail storefront. IoT can be a profitable investment for companies with its ability to improve inventory management lowering losses due to lost or misplaced goods, and by leveraging the BYOD trend to trim CAPEX. It is important for organizations to start strategizing on their vision for future growth and business sustainability, and how investments in IoT and device interconnectivity enablers can help them achieve their goals.

(With significant contributions from Jake Ferry, Research Assistant)

04/01/2014

Are We Getting Closer to a Scanner-less World?

Scandit, a mobile image processing and cloud computing software vendor headquartered in Zurich, has developed a platform that enables smartphones and other consumer mobile devices to facilitate enterprise-grade barcode scanning. The performance level of applications developed on Scandit is comparable to dedicated scanning devices, with respect to speed and in their ability to scan damaged and blurred barcodes. This platform has already been tested in Europe where several companies use applications developed on it. The company also recently announced that it has raised $5.5 million with its latest round of funding – an investment made by a small group of high net worth technology entrepreneurs.

Scandit’s SDK and its blurry barcode scanning capabilities are part of the company’s own intellectual property. What also sets Scandit apart from the other companies that have created barcode scanning platforms for mobile devices is the extent to which it is mobile OS-agnostic, its cloud capabilities, and the 24/7 total support that the company offers. Scandit’s platform can be leveraged for developing applications for every type of mobile hardware including wearable devices such as Google Glass and Samsung’s Galaxy Gear smart watch. Scandit’s unique data capture and storage makes it appealing to retailers. Applications developed on the Scandit platform can help retailers keep track of consumer shopping behavior, including what is being bought at home versus in store, top categories, top products, and the number of scans over a multitude of variables. All of this data can be uploaded to the cloud so it is immediately available for retailer use.

The versatility of mobile devices gives Scandit the possibility to work in all verticals. Scandit partners with app developers and integrators to provide businesses with applications designed for their needs, meeting their specific requirements. We see Scandit as having maximum impact in the retail vertical, serving customer-facing and employee-facing applications with a single device. This platform will be particularly beneficial to small business owners who can now build readily available consumer device-based point-of-sale applications without having to invest in expensive POS systems (and added peripherals) when they already own a smartphone. Businesses with low volume barcode scanning needs that want to give themselves a modern appearance will flock to consumer devices running apps built on the Scandit platform for in-store, customer-facing operations. Since this is essentially a software-based barcode scanning and data capture platform, retailers do not even need to invest in accessories like sleds and sleeves, which tend to alter the appearance of these devices.

Although there is potential for Scandit to rival existing barcode scanning solutions, we believe that this platform will be both complementary as well as competitive to them. VDC expects consumer device application developers to drive Scandit licensing. Retailers are keen to elevate customer engagement and service levels; by enabling customers to download in-store applications and use it for price checks, inventory management, and self-checkout, they achieve just that. While the existing range of self-checkout stations require customers to wait until the end of their shopping experience to unpack their bags and scan items, applications built on the Scandit platform will enable them to scan products right as they take them off the shelf, and before they place them in their shopping baskets, eliminating the process of unloading and reloading altogether.

From VDC’s perspective, the Scandit platform and others like it are a distinct threat to the dedicated enterprise device market. By empowering users to leverage the smartphone camera to scan barcodes and capture images just as efficiently as enterprise-grade scanners would, these application development platforms can also help business owners, regardless of revenue tier, to be part of the ongoing big data revolution. Success in the data capture market will henceforth be determined by vendors’ ability to be adequately agile in their sales and marketing strategies especially as demand shifts to historically untapped segments in today’s evolving enterprise environment.

03/24/2014

MODEX 2014: A Data Capture Analyst’s Perspective

Sponsored by the Material Handling Institute (MHI), MODEX is one of the largest expositions showcasing products and services targeted at the manufacturing and logistics verticals. This was VDC’s first time attending the show and it most certainly did not disappoint. Along with being extremely well attended, this event boasts a healthy exhibitor mix of hardware vendors, solution providers and integrators. As the AutoID & Data Capture analyst here at VDC, I had the opportunity to speak with some of the leading names in each of these communities, and learn their perspective on product innovation and market evolution. Here are some of my key observations:

Move over Laser. Camera-based solutions are here to stay.

One of the themes that stood out across the board is the growing popularity of camera-based solutions in logistics environments, and the growing use of these systems in conjunction with and as a replacement for laser solutions. Datalogic, SICK and VITRONIC had their latest and greatest imaging technology on display – both line scan cameras as well as area imagers – with the vendors showcasing their solutions’ ability to facilitate image capture and analysis in support of applications that will help logistics providers cut down on supply chain inefficiencies. These imagers will gain increased consideration as the need grows to decode a larger amount of data and capture information beyond what is printed on the barcode label. Aside from product identification (via barcode label scanning), these also have the potential to be leveraged for automating processes such as sortation, order fulfillment, claims management, damaged goods documentation, and merchandise returns. Traceability is now a basic necessity; enhanced operational visibility, including verifying the state of the product in real-time, will be critical success determinant. Establishing partnerships with the independent software vendor community will be crucial to addressing key customer requirements in this space.

Big Data in logistics – the need to enable cross-platform communication

Well-oiled supply chains are integral to delivering products cost effectively from source to consumption. Logistics providers are inundated with data coming in from a variety of different sources. There is a need to streamline the flow of products and information across channel, network and organizational boundaries. This is where integrators come in. My conversations with logistics automation solution providers like Vanderlande Industries and KNAPP indicate the importance of building leaner supply chains that ensure on-time delivery with minimal waste by trimming fixed and variable costs. Today’s demand-driven value chains stipulate technology investments that provide not just near real-time information, but also insight into unmet consumer demands. Leading integrators, servicing some of the largest logistics providers, are actively seeking ways to consolidate the data collection process, regardless of device type, and convert it into actionable business intelligence.

To enable dynamic, cross-functional supply chain collaboration, it will be essential for data capture technology vendors to ensure that their products integrate and communicate seamlessly with a wide range of solutions. I expect to discuss these themes and more in VDC’s upcoming research on the global markets for barcode technologies and machine vision solutions. Stay tuned!

03/06/2014

VDC Putting the Machine Vision Market into Perspective

VDC’s AutoID & Data Capture Practice has, over the course of the past two decades, established itself as the leading authority for our coverage of the global markets of barcode printers and scanners. On the scanning side, we have seen the market grow from being dominated by a handful of vendors selling laser-based technology to its present state where camera-based solutions rule the roost. Technology advancements, coupled with fast declining price points, are directly responsible for the explosive growth that imaging solutions have experienced over the past few years. Lines between purpose-built fixed-position camera-based scanners and complex, imager-based systems used in manufacturing environments are blurring like never before. These developments have all contributed to VDC’s growing consideration of a new technology landscape – a palatable target for extending our research capabilities and industry expertise – the Machine Vision market. We fully expect growing convergence between industrial scanning and machine vision solutions to drive vendors’ product and market development strategies going forward. In 2014, VDC will provide its premiere thought leadership, rigorous research practices, and analytical prowess to provide a foundation upon which vendors, distributors, and end-users alike can glean a thorough conception of the machine vision market space.

The composition of the machine vision market is, however, quite unique. Several hundred companies boast revenues of more than one million USD and a considerable portion of these companies fall within a narrow revenue range at the top. This competitive ecosystem along with a breadth of market demands and emerging verticals pose several questions that are top-of-mind for machine vision vendors: what drives the machine vision market’s severe fragmentation? What are the different customer classes and market clusters that vendors serve? Which verticals, if any, should vendors be targeting with their product offerings? How can vendors and their solution partners differentiate in this heavily fragmented environment? Our research will seek to provide thorough answers to these pressing questions. Additionally, we will explore machine vision services, product applications, vendor strategies, and key verticals to create a holistic snapshot of the market space.

If applications within the industrial/manufacturing vertical are driving machine vision system adoption, deployment and sales today, VDC believes emerging verticals hold the key to future growth. Vision technology is already making a splash in these new application environments. New distribution channels and partnerships will form as vendors seek to establish domain expertise outside traditional industrial sectors. Our non-industrial, emerging vertical analysis will include Transportation & Logistics, Security & Surveillance, Life Sciences, and Traffic Monitoring & Control to provide vendors’ executive leadership teams with the knowledge base upon which to establish a firm strategic direction in an otherwise fluid space.

To learn more about our research offerings in the machine vision market, please feel free to view our research outline here.

(With significant contributions from Edmo Gamelin, Research Assistant)

 

Recent Posts

Factory of the Future and Where Machine Vision Solutions Fit In

Asia Trumps the Americas and Europe in Barcode Printer Investments in 2013

An Acquisition Worth the Cost: What Makes Cognex an Attractive Target

From the Last Mile to the Last Meter – VDC’s Vision for Augmented Reality in Logistics

Data Capture and the Race to Shorten the Last Mile

It is all about Retail for Zebra Technologies

How IoT Could Fuel the Next Generation of Data Capture and Asset Traceability

Are We Getting Closer to a Scanner-less World?

MODEX 2014: A Data Capture Analyst’s Perspective

VDC Putting the Machine Vision Market into Perspective

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