5 Trends to Watch in 2002
from IPPT Magazine, Canada
Perry S. Marshall
The way the media bemoans the economy these days, you'd almost think the Great Depression just returned in full force. If you never opened your front door except to pick up your morning paper, you'd expect to see bread lines on every street corner while Wall Street follows Enron into the abyss of financial disaster.
Just the other day I heard a news reporter pontificating about the shaky stock market and lousy economic indicators, followed by a brief afterthought about record housing starts in 2001 and brisk new car sales. I can't speak for the Canadian media, but the press in the US are either desperate to stigmatize the otherwise well-liked Bush administration about something, or else their memory is so short they wouldn't recognize a real recession if it chased them down a dark alley.
The manufacturing sector has certainly had its share of problems during the last year or so, and the layoff rumors at the big automation companies like Rockwell and Invensys are true. But here are some equally important factoids:
- The small, innovative companies are doing just fine. Yes, there've been some bad months here and there. But while the big behomoths who rested on their laurels are now slashing jobs left and right, the little guys are confiding in me that 2001 was a good year. It's almost like they don't want anyone to know about it, because it makes for a nice little secret. One sales manager at a network hardware company said, "Well, OK, we were hoping to grow 40% this year but we're only up 2%." A contract product developer I work with sent out a card at Thanksgiving, thanking his customers for a record year. Another hardware company lost money two different months last year – for the first time in years – but their sales are still strong. An OPC software developer also had record sales. A personal friend, an Information Technology project manager, ran a weekend ad in the Chicago Tribune looking for sales people. He only got 12 responses. With dead wood being tossed into the fire, there's plenty of sunlight underneath for new vegetation.
- The gap between consumer electronics, embedded technology and specialized automation gear grows narrower every day. You can buy embedded controllers that are functionally equivalent to a PLC for little more than $100. Not real practical for your typical automation project guy, but great for some OEMs. And you could buy a wheelbarrow full of Ethernet hubs, switches and cables at Office Max and network your entire factory for cheap, cheap cheap. Not that you'd want to – most of us are going to want temperature ratings better than 40 degrees C – but you get the point. These things are trends, not fads. Which leads me to my third item:
- The big boys are in no great rush to usher in Industrial Ethernet: This is another big guys vs. little guys story, with a pragmatic twist. What do the major vendors really have to gain by promoting Industrial Ethernet as a fieldbus? The shrinking profit margins certainly aren't going to make 'em do it. And though I do believe they can prosper by truly delivering on the promise of transparent connectivity, but they're all cutting back on R&D instead. Most of them do very little development in-house. So who's going to drive it forward? The little guys are. For example, Real Time Automation in Milwaukee just sent the world's first successful EtherNet/IP product through conformance testing, with more waiting in the wings. EtherNet/IP is on the runway, ready to take off, and small, agile companies are in the lead.
- OEM software devlopers lurk below the surface: The European PLC soft logic software market is much more mature than it is here, and it's interesting to note that many companies there license much of their code from companies like 3S and KW Software. It makes sense: in a world where the volumes are low to begin with, making custom modifications to existing code makes a lot more sense than starting from scratch.
- Linux Creeps Slowly Into Automation: If you want a place where new technology catches on at blazing speed, the automation industry isn't the first place I'd look. Growth here is more like tundra in the Northwest Territories, in contrast to the IT and consumer PC world, which is more like the Amazon jungle. But I've been tracking the Linux PLC project, and though it won't displace the familiar PLC any time soon, it does create some very interesting opportunities for product developers. Particularly in Europe, new Linux based control systems and software products are emerging at a healthy pace.
Perry S. Marshall is author of the book Industrial Ethernet: A Pocket Guide. His firm consults hi tech OEMs on product definition, marketing and lead generation. Articles & Editorials and business tools are available at www.perrymarshall.com.
