VDC Research: Industrial Sensing, Networking & Control Market Blog

ABB Finally Enters UPS Market with Acquistion of Newave

ABB is a major supplier of power and infrastructure products but it has had a gap with respect to power protection in that they did not have a significant line of Uninterruptible Power Supply (UPS) products.

In June of 2010 ABB thought it had solved this problem when it had an approved offer for Chloride which was a significant UK based supplier of industrial UPS products. A few days later, ABB was outbid by Emerson Electric. In an industry where the market for large industrial and data-center sized UPS are dominated by a handful of large suppliers such as Emerson, Schneider Electric (APC), and Eaton there was likely some relief the ABB had been rebuffed. Although there was some market and product synergy for the Emerson/Chloride deal, it would have been a better fit for ABB and Emerson likely overpaid with part of the strategy being to keep ABB out of the market.

ABB was left to console themselves with a partnership with General Motors to use electric vehicle batteries in grid power storage/stabilization projects that were similar/adjacent to the UPS market. This will likely be a growing market but it is at least a decade out before it becomes significant.

In mid-December, 2011 it looks like ABB finally found its extended UPS product line as it has an agreement to purchase fellow Swiss company Newave. Like before, it's a perfect match from a product line perspective and it gives the Newave UPS line the global ABB support and sale presence it needs to expand beyond the European market. As Christmas has now passed it looks like there will be no Grinch to step in and outbid them.  It looks to be getting more interesting in the UPS market in 2012 and beyond now that ABB has increased their presence.

Study Shows Most Companies Not Equipped to Use Data Effectively; Is an Effective Data Acquisition Platform the Solution?

After reading a recent article in Sensors magazine in which the results of a study conducted by EMC Corporation indicated that almost two-third of companies surveyed were ill-prepared to take advantage of the explosion of digital data created by mobile sensors, social media, surveillance, medical imaging and smart grids. Although the article was not directly related to data acquisition as VDC defines it, I imagine that a larger number of companies are better prepared to deal with different types of analog data being collected from any one or more of a plethora of sensors that act as the "tip of the spear" in industrial automation and process automation applications across the world.

I imagine that a larger number of companies are better prepared to deal with the analog data being collected from any one or more of a plethora of sensors that are the "tip of the spear" in industrial automation and process automation applications. This blog will focus not just on the actual process and platforms used to acquire analog data so as to make actionable decisions based on digital information but the greater importance of what to do with the data once it has been collected.

Based on VDC’s recently published 2011 Data Acquisition Solutions Market Intelligence program, the global market for data acquisition solutions will likely exceed $1.5 billion in 2012. It appears on the surface that companies are investing in platforms such as paperless recorders, data loggers and plug-in cPCI data acquisition analog I/O boards designed to convert analog data into digital information which can then be, theoretically, used to make actionable decisions and effective action.

In my humble opinion, based on a quick 'back of the envelope' analysis, I estimate that probably less than 60% of the total available application opportunity for data acquisition solutions is likely being served by one or more of the product platforms under study; that still leaves a great deal of need, and opportunity, for data acquisition solutions which can more effectively enable users to acquire data and also process it into actionable information and action.

People seem to want more convenience, comfort and information about the world around them. The digitization of data through a growing number of platforms is providing that. As I have always said, be careful for what you wish for since you just may get it and the price we pay to get it may not be what we bargained for. 

Another Futuristic Blog - Plastic Logic and Future of Plastic Displays

Recently I came across another exciting new development related to futuristic display technologies, which was the topic of another recent blog post, being offered by a company called Plastic Logic. Plastic Logic is developing some exciting new technologies involving plastic displays and plastic electronics which may turn out to be a “game changer” in the way humankind acquire, organize and consume information. Information leads to power and knowledge is power.

The first thing that pops into my mind when I think of plastic displays is the Nook® e-reader (similar to Amazon’s Kindle) that my parents rely on religiously to fulfill their voracious appetite for reading books. They even purchased Kindle’s for my nieces and nephews who are also avid little readers themselves. I must have overlooked putting an e-reader on my Xmas list since I never got one.

Michael Palmer, himself a best-selling author and friend of my parents, recently told me at brunch the other day that electronics books have now surpassed paper books and that paperbacks will likely be going the way of the Dodo bird in the coming years. I can only imagine that we are talking about unit volumes in the billions of readers globally and likely growing at a healthy clip as the share of literate human beings only grows over time, especially in the developing countries. The below graphic provides eBook sale shipments over last 10 years by quarter; it is important to note that price of a typical paper book is probably 3-4 times greater than an eBook so unit shipments are much greater.

Another application in which the use of plastic displays and electronics might be beneficial include those in the military special operations units for whom the ability to read a map, review airstrike coordinates and/or get real-time actionable intelligence without having to worry about the information getting wet, the display being scratched and any other number of problems would literally mean the difference between life and death and mission success or failure.

There are a plethora of other consumer and commercial related applications for which the use of plastic displays and/or plastic electronics could benefit greatly from; however those will have to wait for another blog on another day. But the possible viable market opportunities for employing plastic displays and electronics are almost, figuratively, infinite.

Plastic Logic is an investor back company which boasts some pretty impressive backers including Intel, Dow Venture Capital, BASF and RUSNANO (Russian Corporation on Nanotechnologies), among others. I figure that these guys at Plastic Logic may actually be onto something and that the way we interact with the world around us may just get that more interesting and exciting in the years to come.

Below are some additional links in the event you want to learn more about Plastic Logic:

http://www.redferret.net/?p=29734  

http://www.reuters.com/video/2011/12/05/russias-ipad-alternative-to-text-books?videoChannel=2602&videoId=222207609

Best wishes for Happy Holidays to all.

 

Phones that will bend but not break.....and may even read my mood

As I mentioned in a previous blog, I really enjoy reading about futuristic technology and exciting new product designs. A couple of recent articles discussing phones that can bend and even phones that may be able to read my moods really caught my eye.

Both Nokia Research Lab and Samsung are believed to be working on new phone designs which are flexible and, in the case of Nokia's HumanForm phone, can provide "emotionally enhanced communication" via mood recognition programming that will inform the call recipient of the mood of the caller. I wonder what will happen when some teenage is getting a call from their parents wondering where they are since they are past their curfew at midnight when they should have been home by 11 PM.

The implications for flexible mobile devices may bode well for the future development of wearable technologies and smart fabrics and interactive textiles which could be used in medical applications for true "point of care" treatment, in sports and fitness applications in which bio-physical monitoring is paramount and military applications in which special forces may need to have extreme needs for flexibility of their mobile devices in battlefield conditions.

There are several trends converging that will likely yield exciting new technological developments in which suppliers will be able to provide true 'situational awareness' capabilities to the user. Among the developments enabling this greater interface between human beings, electronics and the world around us include continued improvements in wireless communications bandwidth and reliability, flexible display technology, continued miniaturization of electronics and computing capabilities, deployment of millions of sensors forming vast sensor network arrays which will track out position, vital signs, moods, thoughts, and perhaps even some day enable artificial intelligence on a par with the human brain.

We should all be careful what we wish for since some day we may actually get it.

Some Futuristic Display Technologies to Check Out During the Holidays

I just read an interesting, albeit brief, article outlining 15 futuristic display technologies that may change the way we see the world in the years to come. I love any articles or stories that provide coverage on where technology may be taking us as human beings into the future; having been intimately involved in our wearable technology and smart fabrics initiatives I am particularly fond of developments in these emerging areas on a personal level.

The neat thing about the article I am blogging about is that it actually provides actual pictures of the futuristic display technologies and also has its own link to some futuristic input peripheral technologies as well as a link to a video created by Microsoft on holograms.

I encourage you to check out these links (and other articles on futuristic trends) and to open your mind to the almost infinite possibilities on where mankind may take technology (of all types) into the future as we continue to evolve as an intellectual life form in an unfathomably large and expansive universe.

Predictions for Wireless Networking Product Markets in 2012

As a follow on to last week's blog on wireline networking product market predictions I am making my 2012 predictions for noteworthy things to look for in the smaller, but faster growing wireless networking products markets.

1.  By the end of 2012 the global market for wireless networking infrastructure products, including standalone network management software, will exceed $600 million. Shipments of access points and wireless modems will account for almost 72% of total on a dollar volume basis but will account for only 38.5% of unit shipments.

2.  The reasons for robust growth of wireless connectivity are many and well known but I can highlight a few key ones fueling the robust growth in adoption over the forecast period. Among some of the many benefits of wireless connectivity include: improved efficiency; cost reductions; ability for install where wired solutions impractical or impossible; reduces the majority of the cabling required, thus the associated costs, which is can be more expensive to install in certain locations;  wireless networking allows easier add-ons, changes and removal of functions and is perceived by many users as being more scalable, where this is most valuable where changes or expansions are frequent and expensive; greater flexibility in operations enables companies to run leaner and meaner and maintain responsiveness to changing customer and/or market requirements; increasing trust in wireless networking and technological enhancements made to overcome previous concerns over reliability, latency and security; perceived ease of implementation and lower implementation costs as well as perceived lower maintenance and installation costs; and to obtain greater mobility in industrial facilities which provide benefits of real-time response to machine problems, real-time optimization of machine performance, reduce personnel required and increase productivity, and reducing downtime of both equipment and time to repair.

3.  The fastest growth in demand will come from wireless network switches which currently represent a small niche market which will grow to over 4% of the total wireless networking components segment (excluding standalone network management software) by 2015. Companies such as Motorola are developing increasing traction as companies operating in industrial facilities are both increasing their reliance on wireless connectivity and also increasing the number of devices connected to the network wirelessly.

4.  Laird Technologies will remain the dominant player in antennas, representing the 3rd largest product segment under study, with almost 4x the market share of its nearest competitors in PCTEL, Nearson and Cisco. Antennas segment is forecast for above average market growth as users are expected to increasingly integrate antennas onto existing devices.

5.   Cisco will remain the dominant player in overall wireless networking components shipments but that is a result of their 800 pound gorilla position in the access points segment.

6.  Several other suppliers enjoy leadership positions in the other wireless networking components product segments, among them include GE, ELRPO Technologies, Prosoft Technology, Landis & Gyr, Motorola and Apprion.

7.  Although there is always the chance that an acquisition might take place within the wireless industrial networking infrastructure products market, I am at still trying to think about which companies and/or product segments make the most sense for future PAC Man activity.  I guess Cisco could always decide to acquire someone that will help fill a gap in their product portfolio or Belden could decide to make a quicker entrance into the wireless segment by buying rather than building their own solution(s).

8.  There will be no clear dominant winners among future wireless networks supported but the largest shipment shares of wireless networking components by type of networks in 2015 reveal that 802.11g, b and n networks will be in strong demand and there will still be a sizable share of shipments with the proprietary narrow band networks for applications requiring longer distances and greater security concerns in play.

9.  The five largest consuming markets of oil & gas, power generation, automotive/motor vehicle, water/waste water, and petrochemical and oil refining combined on a global basis for over 58% total 2012 shipments.

Now I am trying to think about what other predictions we can make on other industrial automation markets of interest. I welcome the opportunity to learn about any predictions you may think might come true in 2012 or beyond. I am always intrigued to learn about any rumors on which companies may be on the prowl for a new target to acquire or which supplier may be seeking out their own "white knight".

 

Predictions for Wireline Industrial Networking Product Markets in 2012

As we head into the final month of the year it is always a fun time to ponder what the future may look next year. As a Boston area sports fan I can always hope the crystal ball calls for a Patriots Super Bowl win, a Boston Celtics NBA Championship, another Stanley Cup for the Boston Bruins and/or another Red Sox World Series Championship.

Another fun thing to blog about is what the future may hold in product technology markets that I have covered during 2011. Recently I blogged my informal predictions on what may likely transpire in the data acquisition solutions markets. Today I am blogging about my predictions for the wireline industrial networking products markets.

 Among the most noteworthy predictions (not going too far out on a limb here) I see for the coming year include the following:

1.  The global market for wireline industrial networking infrastructure products, including industrial-grade interconnect products and networking component products (but excluding standalone network management software), will exceed $3 billion in 2012 and will be comprised of over 26,000,000 units.
2. Global demand for network switches for use in industrial facilities will exceed $1.4 billion in 2012 and shipments of managed network switches will account for almost 77% on a dollar volume basis but will account for less than 42% of unit volume shipments.
3. Harting and Molex will be battling it out for leadership of the global market for interconnect products (cables & cordsets and connectors) but will be fighting other suppliers such as Siemens, Japan Aviation Electronics, Belden and/or Erni depending on which product and/or major geographic region is at stake.
4. Cisco will remain the 800 pound gorilla in global shipments of wireline routers across all major regions with no one else even remotely close in market share.
5. Cisco will hold the overall lead in toal network switch shipments but Belden holds a firm grip on 1st place in EMEA and is also a relatively close 2nd place to Cisco in the Asia-Pacific region where Moxa is closing ranks fast in 3rd place.
6. Should Belden make another acquisition of a network switch supplier in the coming, the race for the lead of the largest product segment will really heat up. Given their track record in making acquisitions it is quite possible Belden wants to overtake Cisco for the lead in the industrial networking switch segment. Conversely Cisco could easily expand on their leadership position through an acquisition of another supplier such as RuggedCom, for example.
7. Spectris PLC may decide to continue building its empire in the networking products after having recently acquired N-TRON and Sixnet to join Red Lion Controls as part of its Industrial Controls business.
8. TE Connectivity (fka Tyco Electronics) may decide to acquire another interconnect product supplier to overtake Belden or Siemens and make the top 3, or perhaps TE Connectivity wants to develop a presence in the networking component segment through the acquisition of a supplier offering one or more of the six networking component products under study.
9. Among the Ethernet-based application layer network protocols suppliers are supporting, the battle between EtherNet/IP and ProfiNet is not nearly as intense since each enjoys the relative dominance within the Americas and EMEA, respectively; however the real battle is for dominance in Asia-Pacific and further encroachment on the other's respective regional strongholds going forth.
10. Networking product shipments to the top five consuming markets of automotive, power generation, food & beverage, water/waste water and oil & gas will combine for almost 54% of the worldwide total in 2012.

Okay, so I decided to go out on a few limbs on predictions 6-8 but that is what makes blogging predictions so much fun. Perhaps next week I will blog about my 2012 predictions for the wireless networking products marketplace.

 

Long Term Impact on Thailand Flood to Disk Drive Market

Yesterday I was reading a blog from the VDC Embedded Hardware group and I began to think about the long term impact of the recent Thailand floods on the hard disk drive market. My thinking is based around the following premise. Could this be the disruption that causes industrial and personal computer manufacturers to switch to solid state units?

With my curiosity raised, I looked into it further and found that Seagate fared much better than its two main competitors Western Digital and Toshiba. I'm not sure whether there was some serendipity involved in that Seagate's factory avoided the issue or whether in might have been a Forrest Gump situation where they were very lucky and their "boat" survived while most of the competitors were wrecked. Seagate now has the luxury of raising their prices and locking in customers for long term contracts.

A disk drive is a combination of very high speed chips and a precise electro mechanical assembly of rotating disks that have to be assembled in very clean facilities. One spec of dust and the unit being manufactured is defective. The semiconductors can be made in a fab located anywhere but a disk drive facility is highly specialized. So, a quick takeaway is that hard disk drives will likely be in shorter supply and therefore more expensive.

A few years ago I was a support manager for a semiconductor test platform that used a shoebox sized industrial computer. Because of the unit's small size it used a laptop type disk drive. To make a long story short, the operating environment and stresses from being embedded inside the tester caused these laptop drives to be unreliable. I began to look at solid state disk drive technology but the first units I saw were Mil/Aero. types and way too expensive. Prices began to come down but the storage capacity was not where they needed to be. In 2009, hard drives still had the edge over solid state but now, in 2011, given the recent events and increase in traditional hard drive pricing my bet is that the tipping point has been reached. Will computer suppliers such as Dell and HP react well to Seagate holding them up at virtual gunpoint or will they look at alternatives? Time will tell.

Predictions for Data Acquisition Solution Markets in 2012

With the last of eleven market studies covering the data acquisition (DAQ) solutions markets now being published I decided to take this time to reflect on what I learned over the last several months and to blog some informal predictions on what I may expect to see happen in the DAQ market in 2012 (admittedly I am not going out on many limbs with these).

1. 2012 shipments of external chassis & modules (i.e. DAQ systems), plug-in data acquisition analog I/O boards and standalone (non-bundled) data acquisition software will likely exceed $1.5 billion globally, with DAQ systems accounting for almost 76%.
2. Demand for modular data acquisition systems (one of eight platforms under study) will continue to grow at an above average market growth rate, comprising ~23% of DAQ systems shipments by 2012, as users desire the greater flexibility and ability to mix and match sensor inputs to meet their specific needs without spending on functionality which they do not require.
3. The number of data loggers designed with LCD displays will increase as other suppliers begin to realize that offering video graphic type functionality in a data logger is a sure way to gain market share in that category, just ask Graphtec, Keyence, Hioki E.E. and Dranetz-BMI.
4. Paperless chart recorder suppliers, for units with both >144 mm  and <144 mm panel cutouts, will continue to make inroads into non-process focused markets as an increasing number of these customers realize the benefits of greater real-time visibility into their operations, most of which are increasingly being automated through technology investments.
5. Demand for plug-in analog I/O boards will continue to lag that of most external chassis & module products as an increasing number of users seek out USB PC front ends as they are attractive as peripheral add-ons to computers that are portable and can easily be moved to another platform in a different location. Expectations in usage of USB 3.0 in all new PCs going forward is also expected to help fuel this trend.
6. There will be at least one merger and acquisition within the data acquisition solutions marketplace. The overall market is too large and too fragmented to not experience continued consolidation. Assuming that some predict the future by looking in the rear view mirror of history, some likely targets to consider watching may include Spectris (HBM and Bruel & Kjaer), National Instruments and DynamicSignals LLC. Who knows, maybe ABB or Honeywell will decide to get a little more active in the market and decide to expand their product portfolio beyond paperless chart recorders by acquiring a smaller player.

Okay, so maybe I decided to go out on a limb somewhat with the last prediction but that is what makes these things fun. I welcome to learn about any predictions you may have and/or what you think of mine.

A Few Thoughts on Solyndra

As the debate still rages on what happened with Solydra I thought I would weigh in with my opinion. I have never had the benefit of visiting that plant but have seen countless times the stock footage of President Obama's visit when things were going well. What you see in that footage was a lot of production cells with industrial robots moving solar panels through the various process stages. What you see in that picture correlates very well with what I saw when I did have the benefit of a detailed plant tour at Spire Solar in the fall of 2009.

Spire Solar is in the business of selling production equipment used in the manufacturing of solar cells/panels. Solar panels start with small cells that are tested and then progressively wired into larger and larger arrays in order to increase the voltage and current that is produced. Each circuit group is limited by the weakest cell in the group and so there are design trade offs to maximize efficiency and lower costs. The solar cell arrays are then connected together and encased in the panels that protect them from the environments they will be installed in. One last test involves exposing the newly manufactured panel with a calibrated amount of light that is evenly made across the entire panel. The panel output is carefully measured and the panel is graded. Some panels are much better than others.

So this leaves the question of what happened to Solyndra and why they could not compete with Chinese manufacturers and I think there are several factors that we should look at.

Industrial Automation: Solar Panel manufacturing almost demands automation. Manual processes risk contamination (think fingerprints) of the solar cells and weak cells mean less efficient and lower quality panels. Therefore, the labor head count and amount of automation should have been similar between Solyndra and its Chinese competitors. In an efficient process, the difference in labor costs should be a factor but not a show stopper.

Materials: This should be about equal between China and the US as the silicon materials are not exotic or in limited supply or any other global factor other than perhaps having a lot more semiconductor Fab facilities in the APAC region than the US.

Management: This I'm not sure about. How committed was the company to making solar panels as opposed to getting money and spending it under the guise of being a "green" business. I'll let the congressional investigation solve this one but it does seem clear that contributed capital was not efficiently applied to the facility and design/creation of the panels and processes to create them.

Power Costs: I am fairly certain that the cost of electricity to run a highly automated solar panel plant is significant and, costs are likely much higher in California than say China. This also by itself would not be a showstopper.

Machine Safety: Looking back at the stock video of the Obama visit to Solyndra you see that the automated robots have safety enclosures and features in order to bring them into compliance with OSHA and/or other standards such as EN ISO13849-1 and EN/IEC 62061. In our recent report on Machine Automatic Safeguarding we saw APAC as a smaller but growing market in that there is a lot of room for safety improvement - particularly in China. Machine Safeguarding adds expense and usually lowers efficiency to a sight degree. Let's consider this as a burdon for Solyndra that its Chinese competitors don't have and call it at that. A showstopper? I don't think so.

Economics: Two things are mainly at work here, a glut of solar panels and a decrease in demand as government subsidies dry out and the recent recession makes money tighter. Then, we have the fact that China is holding its currency down and that is a significant factor. If customers are buying on price alone and not taking panel quality and grade/efficiency into consideration this does put companies like Solyndra at a disadvantage.

In summary, I think it was not any one or two factors that caused Solyndra to fail. It was likely to be the combination of all of them happening at the same time for an extended period that did it. Certainly there are a number of valuable lessons to learn and business/economic factors that have to be corrected.