We just wrapped up the latest VITA working group updates and meetings in Las Vegas, right at the beginning of March Madness. Walking the Strip and through the casinos got me to thinking about why people visit Las Vegas. Many are there for the shows and people watching. Many, many others are there for the gambling opportunities. This got me to thinking further about the risks in gambling, particularly sports, which then led me to thinking about the risks that we face in the embedded computing industry.
The computing industry is a challenging business with many risks. Quickly evolving technology fills the future with uncertainty. New innovation leap frogs existing products every day putting huge efforts to waste in short time. Promising opportunities fade away as the market is attracted to the next big thing. Reducing risk is foremost on the minds of companies in this industry.
Participating in standards organizations and the development process of new standards is one way that companies use to reduce risk. Open standards, in particular, offer the allure of large ecosystems with many contributors and participants in both the development of the standards and the resulting technologies and ecosystem. Organizations such as VITA have a long history of developing standards that are widely accepted and long lived in the industry. Companies that develop and use products based on these standards are reasonably comfortable in a suitable market niche that exists to supporting a product line.
VITA has a liberal policy for accepting what projects are considered for standards development. It requires three or more companies coming together to sponsor the formation of a working group. No business case is required to form a working group. Other members can choose to join in the efforts either as an observer or active participant. VITA does not judge the merits of the efforts but rather lets the market decide what will win.
The availability of market data is a common inquiry. Companies from both the supply and demand sides like to have an idea of market size, key players, trends, and other items of interest. Getting this market data is very challenging in markets the size of those addressed by most VITA technologies. The small size and specialized markets mean that there are usually very low numbers of participants in the ecosystem. Compounding the problem is the inability for many companies, particularly public ones, from sharing data that can be used in making business decisions.
Comparing our market data dilemma to the sports gambling industry where big data is extensively used makes me wonder how we can function at all. Sports now captures every piece of data imaginable with new data becoming available every season with the use of technology. It seems ironic that the very technology that we are developing is used to enable other industries to generate and analyze so much data, yet we are flying blind.
VITA struggles with assisting in the gathering and analysis of useful market data. Companies resist sharing too much product shipment data and design wins. The small size of the industry makes it unattractive to most market research firms, the cost to gather and analyze data is far greater than the potential for report sales.
A gambling strategy is to cover all your bets, but that can be very expensive if it means developing several overlapping products, developing with complicated technologies, or participating in a variety of markets. Most companies don’t have the resources to make even a fraction of this possible, instead needing to put teams on the next big opportunity, further increasing risk by chasing tails.
In my role as executive director of VITA, I am especially interested in ideas that help us to collect market data that can be used to help guide business and product strategies. Simply collecting shipment data is not possible for a variety of reasons; public company restrictions, lack of time to provide data, small sample size, and so on. Unfortunately, most of the forecasting is based on observations and speculation based on casual conversations with industry participants.
In a brief discussion with John Reardon, at RTC Media, during Embedded Tech Trends, we talked about the lack of interest from the investment community in companies in the critical embedded computing industry. Investors tend to stay away even though most of the companies in the industry have stellar performance records. Part of the reason they stay away is the very lack of data I have mentioned. Without solid data on the markets served, it is hard for them to take on the investment risks.
I am forever optimistic that this data problem can be solved. Unfortunately, even in this time of technology and high speed, social media conversations, nothing beats a real conversation face-to-face with other humans!