VDC Research: Industrial Sensing, Networking & Control Market Blog

Industrial Sensing Market - Problems With Doing More With Less

Recently, I have been making a lot of channel and OEM interviews supporting multiple projects we have running. There have been many interesting insights I have learned as part of this work but several conversations have correlated with recent demand side survey results we have provided to our clients.

The quick takeaway is that it is likely that some suppliers are losing business they could have easily won. Several distributors have griped that it takes a long time to get responses for quotations and delivery times. As a result, the customer who might have been attracted to a particular product goes another way with respect to product, brand, or channel. This latter is obviously irksome to the distributor who might have invested sales and even technical expertise in problem solving and product selection.

As I mentioned previously, this is a theme I picked up previously in our demand-side surveys. In fact, one vendor was repeatedly called out for not providing timely quotations to customers that attempted to buy from them directly. If the channel partners that deal with suppliers constantly are similarly being ignored this is significant. It is not a business strategy of driving low volume direct sales to distributors for aggregation, it means that suppliers are just not being responsive.

My theory is that suppliers may be asking their employees to do too much for too long and, as a result, things like responsiveness break down particularly during any uptick in business. Too many things are automated and/or being done by fewer people and some of the personal touches and details are being lost. In project management, you have three general pillars to any project that are applicable to this situation. They are Time, Scope/Quality, and Resources. Basically, if you reduce resources, time and/or quality suffer.

I'm kind of interested in what other sensor product distributors, OEMs, and Systems Integrators are seeing and what opinions they have about it. If you would like to chat about it, drop me a line.

Spectris Continues Building its Empire via Acquisition of Omega Engineering

On August 15, 2011 Spectris PLC announced the acquisition of Omega Engineering for about $475 million, a multiple of more than 2.8 x 2010 revenues of $168 million. I remember seeing the large and colorful Omega product catalogs in the office when I started here at VDC over 14 years ago.

As I recall Omega seemed to sell just about everything under the sun when it came to process measurement and control instrumentation including temperature, pressure, flow, level, humidity, strain and force; HMI, electric heaters and data acquisition products and software. Omega Engineering enjoys a strong brand name, enjoys high levels of repeat business, some customization capability and a reputation for providing quality customer service.

Omega Engineering will serve as an additional growth platform from which their Industrial Controls business, which is already comprised of Red Lion Controls and Microscan, will continue to expand its presence regionally as well as from a product platform basis. Spectris had already acquired N-TRON back in Q4 2010 as a means of expanding its footprint in network connectivity and to further leverage the company's industrial controls and test & measurement businesses.

No doubt Spectris will likely leverage the synergies afforded via the combined products and channel networks of Red Lion Controls and N-TRON along with the new product additions via the Omega acquisition to grow its presence in the process measurement and instrumentation, test & measurement, academic and even in-line instrumentation market segments. Omega enjoyed a wide base of customers that relied on the company's one-stop shop product portfolio to handle their small-scale project needs.

VDC believes the greatest value from this acquisition will come from being able to leverage a diverse product portfolio of products to gain traction with new customers with larger project requirements that prefer to deal with a supplier than can provide all their product and service requirements.

Industrial Supplier Business Strategy Options Employed During Downturn

We have a Process Level and Inventory Tank Gauging (ITG) supplier strategy survey that is still open for more participation but, even so, we took a few moments to tabulate the preliminary results and send them to our sponsors last month.One of the questions centered on what companies did during 2009 - 2010.

When the downturn started at the end of 2008 it was clear by the start 0f 2009 it was going to be long and ugly. Leaving out the Mil/Aero segments, most suppliers were left with several likely business levers they could select including outsourcing, downsizing, and reorganizing. I was a bit surprised when I saw that ~65% of the survey respondents indicated doing no such thing.

I was a little surprised by this until I remembered a key difference. Although publicly traded companies are under pressure to maintain profitability in the short term, a good portion of industrial process product suppliers are privately held. This is particularly true for many sensing companies. Being privately held, can allow many of these companies to take the longer business view and avoid the drastic cost cutting measures that can hold them back during recovery cycles. That is of course assuming they have enough cash flow and reserves to survive. In some cases, these well positioned but potentially low on cash entities can be attractive nuggets for larger conglomerates and some of them could be scooped up which could be the case for machine safety equipment supplier Jacob Safety which was recently acquired by ABB group.

Would you like to see more of the results from our survey? If you are a supplier of process level and/or ITG products there are 2 options. You can purchase some volumes from the report, or you can take the short 5-10 minute survey at the following link: http://www.surveymonkey.com/s/5DFMYXJ

We are also offering you 1 chance in our iPad raffle for completing the survey. If you have already taken the survey, please stand by for the aggregated results which we will send you in 3Q. We will also alert the winner at that time.

Wireless Charging Could Empower Sensing in Industrial Applications

I saw an interesting article this morning about wireless charging that got me thinking about its possible use in industrial sensing. This technology is being developed by a MIT spin-off WiTricity and it's new partner MediaTek. The wireless charging they are working with is a big step beyond the inductive type charging plates that are currently on the market but, instead can charge devices at a distance. Obviously a cell phone that never needs charging and, perhaps, a much smaller battery geography would be a big deal on the consumer market but I'm thinking it could be a game changer in industrial settings.

Using wireless data transmission solves a lot of sensing problems particularly in equipment that has a lot of moving parts but that still leaves the problem of powering the device. Newer sensors with ultra low power demand and advanced long-life batteries solve some of this but, I suspect that they still leave some sense of concern that a dead sensor battery could idle an entire production line. Some of this concern could be alleviated by energy harvesting and/or solar technology but these are not ideal in all cases. But, if you could eliminate much of the battery size, combine energy harvesting and WiFi type power, you could have a really small wireless sensor that would be ultra-reliable. To me that's a pretty big deal.