The Next Level of Competition

May 1, 2006
Successful companies must evolve their competence or become marginalized.

While searching recently for the Geoffrey Moore book, “Crossing the Chasm,” I found instead, “Dealing With Darwin.” It's a study of innovation in large companies. Looked good, so I bought it. The thesis is both provocative and inviting. This is another book (like Kevin Kelley's “Out of Control”) that uses biology as a model, rather than physics. The foundation logic for the book is that free market economies operate by the same rules as organic systems in nature:

• Competition for the scarce resource of customer purchases creates hunger that stimulates innovation

• Customer preference for one innovation over another creates a form of natural selection that leads to survival-of-the-fittest outcomes

• Each new generation restarts the competition from a higher standard of competence than the prior generation

• Thus, over time, successful companies must evolve their competence or become marginalized.

Competition at the next level?

Now, apply this thinking to automation and control. Many supplier companies began with components, then added intelligence at the component level. Eventually, programmable logic controllers (PLCs) began to replace relays, and distributed control systems (DCSs) gave coordination, design and human-machine interface, or HMI, intelligence to single-loop control. There was a lot of competition in the sensor/actuator market, then increasingly to signal acquisition, then control platforms. Then commercial PC technology invaded the control domain (powerful microprocessors, cheap and dense memory, and so on) and the technology line between PLC and DCS began to blur (not to mention motion control). At each level, the companies had to go beyond their competitive advantage to be competitive at a new level. Can you think of some companies that have achieved that next level of competitiveness and some that haven't? Write to me with your thoughts. It might make a good feature—or maybe even a good book.

Much speculation among editors and analysts followed the recent Invensys InFusion enterprise control system announcement (see page 17), but I think that many are missing the point. Too many focused on the underlying technical foundation, or the SAP integration. But a lot of companies are working on that. The real competitive evolution is the use of Invensys Vice President Peter Martin's extensive research with executives on how they would like to see information from the plant, and his modeling on how to help finance and engineering departments talk to one another. Another advantage is the extensive Wonderware connectivity library. These key the company's competitive differentiation. I expect to see more products and initiatives from other companies pop up over the next couple of years as the competition heats up. Let them all deal with Darwin.

Included in this issue for many of you is the second edition of our Industrial Ethernet Review. If your issue doesn't include one, look for it online. This edition deals with a controversial issue—using Ethernet to talk to input/output devices. I have talked with several systems integrators who have success with this technology, despite the naysayers who point to the fact that Ethernet is based on probability theory and not determinism. But, as columnist Jim Pinto points out (see page 70), at the speeds we are talking about today, lack of pure determinism becomes moot for most applications.

We will host another Industrial Ethernet Webcast on June 8 with speakers including Lou Bertha, a systems integrator who has made Ethernet work, and Dick Caro, well-known industrial networking guru. We'll also report on a study of industrial Ethernet done by the University of Michigan engineering department. I'll be moderating and looking for your questions as we highlight the Q&A session at the end. Join us.