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Larry Desjardin- April 30, 2012
A Report Card for 2012 Predictions
At the end of 2011, I made 10 predictions about the industry for 2012. Since we are now 4 months into the year, I though I’d review the predictions to see how I’m doing. It is also a good way to step back and take a look at the industry as a whole.
1. Modular instruments will outgrow traditional products by 10 points. Since the secular growth rate of the T&M industry is between 4 and 5 percent, modular needs growth rates exceeding 15% for this prediction to come true. As a first approximation, let’s use National Instruments as a proxy for the modular instrumentation market. NI reported a first quarter PXI growth rate of “greater than 20%”. That’s 15 points greater than the T&M growth rate. I’ll do a more detailed analysis at year-end, but this prediction is on its way. 1-0
2. Asia, and China in particular, will drive big part of modular growth. I’ll use NI as a proxy again. Asia’s growth rate was the highest of any region, 6 points over Europe, and 11 over the Americas. Add Frost and Sullivan reports of high modular adoption rates in China and India, and this prediction is the reality. 2-0
3. RF PXI Juggernaut continues. Bingo. Readers will recall the impressive PXI RF products demonstrated at Mobile World Congress from NI and Aeroflex. You can add Agilent Technologies to that list with their Wideband MIMO Signal Analyzer. Throw in ZTEC’s 802.11ac solutions and there is a key trend here. PXI is becoming a mainstream RF architecture. Doesn’t MIMO mean Modular Instruments Match Opportunity? 3-0
4. One “big iron” semiconductor test vendor incorporates PXI/AXIe. Well, there goes my winning streak. Teradyne has a cleverly-designed PXI adapter for their in-circuit testers, shown in a video here, but not the same for a semiconductor tester. Great idea- let’s see if someone does it. Maybe SEMI means Still Evaluating Modular Instruments. 3-1
5. Modular instruments accelerate transformation of semiconductor characterization market. With Aeroflex and TEv offering AXIe characterization stations, Agilent offering AXIe logic analyzers, and the suite of PXI semiconductor test products from NI and others, this still looks likely. However, I haven’t seen 2012 reports of new adopters and deployments. Still waiting on this one… 3-2
6. Three more companies join AXIe. Informtest, a Russian-based VXI manufacturer joined the AXIe Consortium earlier this year. They plan to migrate their current VXI products to AXIe, attracted by the large board area but compressed rack height. This is a good option for manufacturers and system integrators looking to migrate from VXI. One new company in the first 4 months is theoretically on-track, but let’s wait and see for this prediction. 3-3
7. Big Physics embraces AXIe. I expect real deployments this year, based on the AXIe digitizers introduced by Guzik and Agilent. These digitizers clearly have big physics in their sites due to their density and performance. But are there deployments yet? Like Schroedinger’s cat, we won’t know the status until we actually look inside. I’m waiting to hear of further news… 3-4
8. PXI software standards bring new levels of compatibility. The PXISA technical committee continues to make good progress on the software requirements for multi-vendor solutions. This is a benefit for the entire industry. Expect more details later this year. 4-4
9. One large VXI to PXI/AXIe conversion. Bingo again. VTI Instruments has essentially brought their dynamic signal analyzer measurement suite from VXI to PXI. You can read the analysis here. I should have phrased the prediction as at least one…. 5-4
10. More evidence of the coming disruption of modular instruments.
This is the biggie. Reviewing the predictions above, 5 are clearly coming true, and 4 are “wait and see”. But Prediction #10 is predicting that we are facing a disruptive shift, and there will be clear evidence of this. For those who wonder what the “coming disruption” means, let me phrase it as an equation:
Nash Equilibrium + Porter’s 5 Forces = Disruptive change for T&M
If you don’t recall Nash and Porter, it may be time to dust off the old MBA and econ textbooks and refresh your memory. These two concepts together explain how disruptive shifts occur in markets, and explain the modular adoption rate in automated test in particular. I actually teach these concepts in workshops, coupled with segmentation models to make it relevant to T&M. However, you don’t need training to see the direction of the trends above. But here is the key question: are these merely trends, or are we facing a disruptive shift, that is, where the trend accelerates?
There’s already a lot of evidence that we are approaching that inflection point, but I will hold off from calling this a win yet. Wait a few months. NI Week and Autotestcon are traditional venues for major announcements in the modular space.
What has already occurred is setting up the end of the year to rock the industry. I’m still betting on it.