Wireless Growth Paradigms

By : Jim Pinto,
San Diego, CA.

Industrial wireless adoption has been stalled by a combination of old-paradigm thinking and paralysis-analysis through standards committees. In addition, conventional pricing inhibits high-quantity orders and faster growth. This presents opportunities for new, agile and innovative leaders to emerge.

This article was published by:
November 2006

The industrial automation environment holds the potential for installation of wireless products throughout a factory or plant to yield vast arrays of information that can improve operations and profitability. Already widely deployed in commercial and business applications, industrial wireless adoption has been stalled, purportedly because process control users are slow to change and are paranoid about security. The real reasons for slow introduction are a combination of old-paradigm thinking, compounded by paralysis analysis through standards committees.

Recognizing the possibilities for growth, the automation majors are loading their cannons with broad and comprehensive products and services portfolios.

Honeywell Process Solutions and Emerson Process Management have made recent major wireless announcements focused on the process industries. ABB is involved on a broader front, across factory automation, process and power industries, with a considerable portfolio of wireless products. Invensys is active with the Wireless Industrial Networking Alliance (WINA), but does not yet have a broad offering. Siemens, Rockwell Automation and Yokogawa and the other majors have only fragmented offerings.

Jack Bolick, President of Honeywell Process Solutions, says wireless is "at the tipping point," and his group has ambitious plans in this new arena. Their advantage stems from the ability to utilize developments from their Technology Labs; a lot of wireless stuff is coming on line in building automation, where Honeywell is a leader.

There are two marketing problems that I see concerning industry leaders and wireless. While focusing on resolving the FUD (fear-uncertainty-doubt) regarding adoption of the new technology, many are missing the FAB (features-advantages-benefits) that completely new and different wireless capabilities bring. The spread of new wireless technology in the industrial environment will bring the ability to do things that were inconceivable before. This will bring changed work processes and new skill sets that may not simply extend from current habit-patterns. The future values of wireless in the factory and process plant are yet to be imagined.

Pricing paradigm paralysis

Then there is pricing. Industrial automation companies typically look for 50 percent gross profit margins, based on relatively low product volumes and high overheads. When new products are rolled out, they accommodate layers of overhead that govern existing and conventional products. Too few marketing managers have the guts to propose revolutionary pricing formulas. As a result, applications that can justify a completely different pricing structure by generating sales volumes orders of magnitude greater than present are overlooked, or inhibited. Of course, this presents opportunities for new, agile and innovative leaders to emerge.

In this age of accelerating technology, which presents new growth opportunities, let's not get paralyzed by perpetuating past paradigms. We should be considering completely new business models with completely new gross profit margins and overhead ratios.

Says Andrew Bond in his Industrial Automation Insider newsletter: "The future of wireless in process automation could well turn out to be a battle between those who use it 'incrementally' - in effect to replace copper in conventional applications - and those who use it imaginatively to reshape the applications themselves."

Meanwhile, Emerson recently made a major "Smart Wireless Introduction" of products that will work reliably in the process environment "canyons of metal." The company offers immediate availability of a "Starter Pack" to give customers an easy way put wireless products to work right out-of-the-box. To minimize time-to-market, Emerson cleverly sidestepped the standards issue; instead of waiting for the SP100 industry standard to be completed, the company offers a guaranteed upgrade when it's finalized.

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