Several colleagues have traveled close to my new location, and we’ve shared some good meals with great conversation. Inevitably they asked for my observations on the state of the automation market.
Part of my answer, in short, would be to quote from a recent Seth Godin blog post, The Drift to Normal. As an organization grows in scale, the idiosyncrasy and distinctiveness that was originally informed by the taste of the founders moves toward the mean. Over time, things get more average.
He continues, “That’s because each new customer, each new supplier and each new employee wants or needs something a little more normal, at least sometimes. The drift to normal can only be countered by persistent effort, usually at the cost of some element of short-term scale.”
Here are a few points that capture my thinking:
- Mature Market
- We’re building few or no new plants—and the USA seems to be declining in activity with European and Asian automation companies for the most part showing reduced interest
- Customers are not switching systems
- Automation supplier consolidation
- Innovative startups look for lucrative buyouts as their end game
- Technology is stable
- Technology is also consolidating
Effects on media and customers:
- Automation companies have reduced need for outside marketing partly due to spread of technology
- Primary emphasis is on sales and service—keeping present customers satisfied, if not happy
- Technology development involves tweaking current products and innovating through acquisition
- Geographical retrenchment
For example, let us look at a brief history of National Instruments, nee NI, nee Emerson Test and Measurement. Three technical innovators created a startup with a vision of software defined instrumentation. They created a creative, entrepreneurial culture. For several years there was great energy, growth in business, growth in technology development.
Then one year I noticed that the technology keynote at the annual user conference sounded more corporate. Less, “Gee Whiz” technology. People started to trickle away—either encouraged or seeing the changes. The leaders deliberately changed the culture toward corporatism preparing for an eventual sale. Then the sale happened to the epitome of corporate management in the market.
Note: not a criticism, but an observation. And it’s happening all through the market.
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Gary