There’s a lot of talk about how the IoT is shaking things up in the industrial and consumer sectors, but disruption isn’t limited to these two areas, writes Sam Darwish, Sales Director, Microlease. In truth, consolidation and the cross-propagation of technologies is a common theme in the electronics sector and one that is the source of significant change.
Currently, I’m seeing a lot of transference of technologies and their associated skillsets between the RF & Microwave domain with its traditional focus on Aerospace and Defence markets, and the Telecommunications sector.
This is creating challenges for OEMS in their respective markets because the dynamics of each are traditionally quite different; the A&D market is mainly concerned about high-reliability, high-value solutions with a long time-in-service, while the Telecoms market is more dynamic, agile and cost-sensitive. Each has much to teach the other but without open channels between the two, achieving any level of collaboration is difficult.
#This compartmentalises their respective value-add, making their continued evolution more challenging. Test & Measurement companies with expertise in the technologies involved and the market dynamics that impact both sectors are well placed to help ease this period of change.
The particular challenges centre on the technologies now being deployed in these markets. OEMs in the A&D space are moving from slower legacy communication solutions like CAN, towards the high-speed and high-bandwidth technologies originally developed for the Telecommunications space, such as Ethernet, PCIe and so on.
This represents significant challenges for A&D companies unused to these networking standards.
Conversely, OEMs in the Telecoms sector are now adopting RF technologies that are commonplace in the A&D vertical but not proven or widely deployed outside of it. The move to 5G is the case in point; the frequencies used here are more closely related to the microwave technologies used in the high-reliability sectors, rather than anything that has come before it in the Telecoms domain.
These changes are putting pressure on OEMs in both markets, as they strive to acquire the necessary experience and expertise needed to transition smoothly.
The IoT itself evolved from the Machine-to-Machine application space, a process that wasn’t without pain. Now those same growing pains are affecting the A&D and Telecoms sectors, which will force them to change the way that they operate.
Networks are getting smarter, which is driving developments in the way Test & Measurement equipment is sourced and utilised. This extends to the way antennas are deployed and cited.
This typically requires the use of an antenna alignment tool such as the 3ZRFV+ RF Vision Antenna Aligner with camera, from 3Z Telecom. It is used to mechanically align microwave point-to-point antennas accurately, with the aid of the fully integrated HD camera.
The cost of purchasing this tool is relatively low, but many installers prefer to enter into a long-term rental agreement and fund the on-going cost through the projects it is used on, rather than purchase it under Capital Expenditure. This is a clear indication of how dynamic this market is currently.
Conversely, an instrument such as the N9020B MXA Signal Analyser (pictured) from Keysight Technologies, which is significantly more expensive, would typically be purchased outright by OEMs in the A&D space.
However, as OEMs in the A&D sector are exposed to the pressures of more dynamic markets they are finding that the available Capital Expenditure is also coming under pressure.
These OEMs are finding that the traditional financial year no longer provides the opportunity to use unspent budget on expensive equipment. The changing landscape is exposing the time-to-market pressures experienced by the incumbents and the effect of that is they no longer have the luxury of waiting until year-end to purchase it, even if the budget is available.
In a much more competitive landscape, access to the right T&M equipment at the right time and through an affordable financial model is becoming instrumental in OEMs winning contracts.
The CapEx required to purchase high-end test equipment could prohibit some manufacturers tendering for contracts, so part of the change OEMs are now experiencing involves the way they approach the cost of Test & Measurement.
Of course, companies like Microlease exist to provide that financial buffer, by assuming the CapEx risk involved with building an inventory of high-end test equipment and making it available under short-, mid- or long-term rental agreements.
Schemes such as Rent to Buy, which is also known as Rent to Own or Spread Payments, provide OEMs of any size and budget a way to access the test equipment they need in order to remain competitive in this changing technology landscape.
Business intelligence is also playing a key role here. The cost of doing business needs to be closely monitored and controlled if OEMs are to remain profitable and competitive.
As test equipment can represent a significant and growing part of the budget it is becoming more important to manage that expenditure. This is an important part of what Microlease now provides, by creating a tailored programme for each customer, based on their needs.
The cost of T&M is often hidden to the customer, who in many cases doesn’t realise that the piece of equipment that cost £250,000 is sitting unused for eight months of the year and could be rented at a much lower cost, for example.
For Telecoms companies, the prospect of investing in a high-end traffic generator that could easily cost in excess of £250,000 can be daunting, but necessary.
Seeing a return on that investment could be painful, as amortising that cost over three years across all projects would highlight the aggressive margins involved. The impact of moving to a different cost model would be relatively easy to evaluate at an early stage.
The technology landscape is in a state of flux; traditionally agile markets are challenged with adopting solutions that were developed for markets with significantly different demands.
If we are to continue to deliver the customer experience we have all come to expect from a world that is always on, always connected and bandwidth-rich, these technologies must now quickly be assimilated into new kinds of platforms.
The T&M challenges involved with this evolution are multiple. They include the technical, of course, but they also impact the business model; today, the two are inseparable and this is, perhaps, as big a challenge for OEMs as the adoption of new technologies.
The insatiable appetite for higher data bandwidths is impacting all vertical sectors, and it will require the adoption of not only technologies developed for other sectors but the ability to leverage innovative financial solutions.
Sam Darwich has 20 years of experience in Test and Measurement working with customers in research and development through to wireline and wireless network deployment. He has worked for and with the major vendors such as Keysight, Anritsu, Exfo, Viavi, R&S, 3Z Telecom and others. At Microlease he has combined this technical knowledge and what he has learned from customers to ensure that we provide the right services, solutions and support to our customers.