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From Cutting-edge Control Systems to Lower Prices, Second-Tier Suppliers May Have Just What You Need
Everyone in the process industries is familiar with companies such as Foxboro/Invensys, Honeywell, ABB, Siemens, Rockwell Automation and Emerson. These six, the "Big Boys" dominate the control industry, fill the pages of control magazines with ads, and issue news and product announcements by the dozens. They are so big, some hold their own trade shows. And judging by the press releases we get nearly every day, they are selling multimillion-dollar process control systems around the world in record numbers. Recession? What recession? The Big Boys appear immune to it.
We picked these six as the Big Boys because they consistently ranked in the top five of the process control system category in our Reader' Choice Awards, or were among the top five on our TOP 50 Suppliers list. Most made both lists as well. Refer to our Jan. 2003 issue to see exactly how well each of these companies did on both surveys.
Lost in the Shuffle
Virtually lost in the shuffle are the second-tier process control system suppliers. We define "second tier" as all process control companies except the six named above.
While some second-tier vendors market their products nearly as well as the Big Boys, others meekly hold up their corporate hands and whisper, "Hey, we sell control systems, too." While the Big Boys lobby the media and their customers with professional, powerful marketing communications, several second-tier companies had to curtail their marketing efforts over the last few years, laying off their PR folks, cutting their ad budgets and limping along, trying to survive in these tough economic times.
Are offerings from the second-tier companies just as good as those from the Big Boys? Of course they are. The best evidence of that surfaced in 2003, when Foxboro Invensys announced its new A2 process control system. It was a control system originally developed by Eurotherm, a second-tier company that Invensys acquired. Eurotherm had been trying to peddle its system with only modest success. When Foxboro's marketing machine took over, sales skyrocketed.
It shows the power of good marketing and the value users attach to a name like Foxboro. It also shows that there are some very good hardware and software systems out there that you should be considering for your next process control system.
Back in 1998, Ken Wright, fuels specialist at Conoco Phillips in Bartlesville, Okla., needed to replace the legacy control system in the company's catalyst lab. Although Honeywell was the Conoco Phillips's principal DCS (digital control system) vendor at the time, Wright didn't think a big system was what he wanted.
"Are offerings from the second-tier companies
just as good as those from the Big Boys?"
"We reconfigure test cells and controls on a regular basis, so we need a lot of flexibility," says Wright. "A big DCS would require us to shut down eight or more of our 40 test cells just to reconfigure one of them. Instead, we ordered a control system from Opto 22. Now, we can reconfigure controls without shutting anything down."
Wright reports that the Opto 22 system has been trouble-free since 1998, and they have steadily added to it over time. In fact, they recently ordered enough control equipment for six more test cells.
What's in a Name?
The value of a legendary brand name is immeasurable. Some of the Big Boys have been around since the dawn of time, installed tens of thousands of systems, spent billions of dollars in product development, and have worldwide networks of sales and service organizations. This is very important to many end users, like Thomas Badura, electronics project engineer at a plastics company in Sheboygan, Wis.
"As an end user in a smaller sized company, I feel the benefits of long-term commitment to, and support of a control platform, outweigh the advantages to constantly pursuing the latest technology," says Badura. "This is an attribute we look for in a controls supplier. Our company generally does not require extremely high end or exotic control strategies. Accordingly, the standard, established systems offered by the big boys fit our needs."
10 Years of Second Tier
The Flying J refinery in North Salt Lake City installed an Opto 22 Control System in 1993, and it has been running ever since. It was one of the first PC-based control systems ever installed in a refinery.
Other end users don't have time to search out the smaller players. Ed Bullerdiek, control group leader at Marathon Ashland Petroleum, says Marathon is a big company, so they look at the big players. "There are a lot of big players, and not a lot of time, so you limit your list when you are looking."
Systems integrators have a somewhat different point of view. "As far as deciding [on a system], we usually rely on the customer's preference. When it's not available, we try to be good stewards of their money and find the most cost-effective solution," says Cliff Speedy, controls engineer at C&I Engineering, Louisville, Ky. If an end user wants to save money, a second tier supplier is an excellent choice, because their systems sell for half to a third the cost of a big DCS. However, cost is not the only issue.
"There is also the consideration of maintaining support for a system. Our company is not into service contracts or continuous on-site work. We want to put in a large system and turn it over to the client. So I think the biggest thing going for the larger suppliers is a network of capable, independent support."
The problem is that large, complex systems need much more support than simple systems. And many of the big control systems out there are very complex.
"The Big Boys like to take an all-encompassing, top-to-bottom approach when developing their process automation systems," says Benson Hougland, director of technical marketing at Opto 22, a second-tier supplier. "They construct elaborate architectures that, while very effective, are costly and require a major, enterprise-wide commitment by the customer to the vendor. This is how they like to play ball, entrenching themselves and reaching their tentacles into as many areas of the enterprise as possible."
This approach certainly seems to work, because the Big Boys are selling huge numbers of systems.
The Big Boys may have all the weapons, but chinks are starting to show in their armor. In this month's Control Report (p25), we show that some end users are starting to question the technical leadership, commitment to R&D and outsourcing of support. It's not an overwhelming mass revolt by any means, but where there's smoke, there's fire. We've heard that customer support, now being farmed out to developing countries, annoys some users. We also heard that some DCS suppliers are acting arrogant and are hard to deal with.
We heard no such complaints about second-tier suppliers. In fact, nobody had anything bad to say about them at all. Maybe it's because they take a different approach.
We Try Harder
"The bottom line is that many companies don't need a top-to-bottom full system-wide approach. In fact, many companies today simply don't have that kind of funding. We take a different approach," says Hougland. "The hardware and software tools we provide allow the customer to scale their solution much more easily. We provide a tool set for customers to incrementally improve or upgrade their process control applications. As a result, we approach the customer as a provider of these tools, and we have a portfolio of systems integrators who can help implement the solution."
Many of the second-tier suppliers offer "tools" that are based on ordinary, plain-Jane technology, such as Ethernet, Windows, PCs and open architecture. Each supplier, of course, adds its own expertise to the products, and what emerges are the most advanced, high technology process control systems, devices and software available on the market.
In some cases, even the Big Boys use tools from second-tier suppliers. National Instruments says it provides a wide range of products that are used for many different types of measurement and control applications in process, discrete and batch industries.
"The Big Boys that you refer to don't have all the pieces necessary to address every requirement of all process automation systems," says Don Holley, Industrial Automation Product Manager, National Instruments. "Many times, National Instruments products are used in conjunction with one of the Big Boys' systems to solve high-speed measurement and control problems, integration with analytical instrumentation, and advanced analysis and control."
It works the other way, too. Some second-tier suppliers use tools from the Big Boys. Cindy Hollenbeck, marketing manager at SoftPLC, says one of their customers is installing Model P266 software-based PLCs with Intellution-based HMIs. SoftPLC was in competition with major DCS vendors for the job, and Hollenbeck says they won because they were one-third the cost with better performance, the same reliability and less ongoing maintenance, even when using an established HMI/SCADA software package from a DCS vendor.
"Neither SoftPLC nor Intellution has the complete solution for all the tasks done by a DCS," says Hollenbeck, "but together we do."
Although the Big Boys pioneered distributed control in the 1970s and 1980s, they seem to have lost some of their technological edge to second-tier companies, who are much more willing to go out on a limb and stake their company's future on new technology. Today, the Big Boys are sometimes willing to let others break new ground, and then adopt it after it works.
"Wago was the first company to offer a fieldbus-independent solution," says Dean Norton, Wago Marketing Manager. "While the fieldbus wars were going on, it was Wago's position to support all protocols and not try to figure out who was going to win this war. As it turned out, no one really won this war, and our position of offering customers all solutions has proven itself to be the right decision. This is particularly important to our distribution and system integration channel partners. They can provide connectivity to almost any protocol, such as DeviceNet, Profibus, Ethernet, Modbus, Interbus-S, CANopen, etc."
Get the Job Done for Less
Process control systems from second-tier suppliers such as Wago may not have Glamorous three-CRT operator panels, and may not include everything from field instruments to asset management software, but they get the job done.
Some second-tier companies have hardware and software that will, figuratively speaking, run rings around established DCSs, because they are using the most modern CPUs with faster processing speeds and the latest software, such as Windows Mobile or CE 3.0. For years, the Big Boys have realized that second-tier companies jump ahead in some areas, so instead of developing the products themselves, they snapped up technically advanced companies such as Moore Products, Wonderware and Intellution. This is a trend that's likely to continue.
"The lack of innovation at the DCS companies has accelerated," says Russ Agrusa, president of Iconics. "Just look at ABB, Invensys and Honeywell. They continue to farm-out innovation to consultants and India in a cost-cutting effort. There is complete lack of leadership and vision, and no effort to keep the innovative expertise that put them on the map in the first place. Their only hope is to purchase the innovators and then squeeze their juices till they are part of the corporate culture. Where is the Bill Gates of Rockwell, Siemens, ABB and the other stegosauruses?"
The second-tier companies are often way ahead of the DCS dinosaurs in applying technology. For example, Iconics offers a report generation and asset management package that performs the same functions at a fraction of the price of similar systems from DCS vendors. Opto 22 has a proven Ethernet-based system that costs a fraction of a DCS vendor's network. Indusoft has HMI/SCADA software that runs on PCs, PDAs and Smartphones (picture cell phones). And National Instruments has advanced data acquisition hardware and software. When the Big Boys need that kind of technology, they just acquire the company that has it.
Some of the second-tier companies are giants on different turf, and are just now turning their attention to the U.S. process control market.
Schneider Electric, for example, is a giant in power distribution and discrete automation, but almost off the radar screen in process control. As we reported in our January issue (In the News, p16), they have taken aim at process control and intend to build their market share.
Yamatake is a giant control company in Japan but, until three years ago, was tucked under Honeywell's wing. "Yamatake has been supplying valve equipment and process controls for nearly 100 years," says Russ Kirkman, marketing manager. "We have only been operating in the USA under the name Yamatake for about three years. Previously we were partnered with Honeywell, who had been private labeling our control technology since the 1950s. That makes Yamatake one of the Big Boys, I guess."
What about the service that so many users demand? Some second-tier companies pride themselves on it. Mike O'Connor, Product Marketing Manager at Sixnet, says, "As a small company we feel we are much more responsive to our customers, especially OEMs. For example, when you call Sixnet you always get a live person and not voicemail. We also love to work with OEMs, big or small, to supply them with a solution that meets their exact needs. We provide a completely different experience"more down home, you could say"than what you typically get with the Big Boys."
"When a problem occurs in our company, the programmer immediately drops everything to fix it," says SoftPLC's Hollenbeck. "We e-mail the fix ASAP, with no case numbers, no waiting on hold for an hour, and no talking to someone who can't respond"you get an expert on the first contact. For example, we had a customer doing a chemical processing system call in a problem on Friday. By Saturday morning it was fixed and e-mailed to them."
Hardware and Software
FieldPoint hardware and LabView Software can deliver process control, data analysis and information handling capabilities in a single platform.
It was a magnificent achievement by the Big Boys, and gives them an apparent leg up on the second-tier suppliers. Few, if any, of the second-tier companies can offer such an elaborate enterprise integration scheme.
As Opto 22's Hougland essentially put it, the argument from second tier suppliers is so what? Who needs that much complexity? Instead, Opto 22 offers standard interfaces to standard enterprise software packages.
Wago says it has a whole suite of software products that help the integration of the plant floor with the rest of the enterprise via OPC, DLL, Visual Basic or C programming. "Our suite of Ethernet based controllers further bridge this gap with Internet applications and protocols such as XML, FTP, HTTP, UDP, SNMP, SMTP, etc.," explains Norton.
SoftPLC does it the same way. "Interfacing to management systems is easy through interfaces such as OPC, SQL, XML and others," says Hollenbeck. "SoftPLC can also send e-mail messages for remote data acquisition/reporting, service calls and more. We can also provide web browsers with viewable live data without opening security holes in plant network firewall schemes, via our Java technology."
InduSoft has formed an alliance with Valeosoft, a vendor of asset management software. "We have begun a program that will align us with the best software manufacturers in the world," explains Ernie Roland, president. "Our core competency is in HMI/SCADA, not asset management, vibration analysis or supply chain management. However, our customers need that kind of software, and we want to make sure our software is compatible with it. Therefore, we are actively seeking out the leaders in various software categories and forming joint marketing agreements with them."
Suffice it to say that all second-tier hardware and software vendors have seen the light, and can provide links to virtually any enterprise packages you may need. They must do this, or they won't survive.
Pick Your Poison
There's no question that DCSs from the Big Boys are powerful, sophisticated systems that are supported by an army of experienced process control professionals. Their engineers understand your application and their worldwide sales and service capabilities will support you no matter where your plant is located. If you buy a DCS from a Big Boy, it will work and work well.
The whole point of this article is to point out that there are alternatives. Some second-tier process control suppliers have hardware or software that are equal to, and sometimes more advanced than what the Big Boys now offer. Second-tier companies also can integrate with enterprise software, just like the Big Boys.
Admittedly, few of the second-tier vendors can offer themselves as a single source for products ranging from field instrumentation and process controls to fieldbus architectures and ERP software, but second-tier company system offerings can interface to any of those products.
If there is a place where second-tier companies fall farther behind the Big Boys in any area, it has to be in product marketing. For example, although we polled all the second-tier companies listed in our Buyers' Guide that say they make process control systems, not everyone responded. You undoubtedly recognize the companies quoted in this article, because they are among the most successful. Their marketing departments also responded quickly to CONTROL's editorial queries, which may help account for their success.
A roundup of second-tier companies appears [CONTROL, March '04, p59]. As you will see, your possibilities range from component suppliers, where you essentially put together your own system, to full-line integrated hardware and software vendors. More information on these systems can be found in our Buyers' Guide (CONTROL, May 03) or via our on-line buyers' guide at www.controlmag.com.
ControlGlobal.com is exclusively dedicated to the global process automation market. We report on developing industry trends, illustrate successful industry applications, and update the basic skills and knowledge base that provide the profession's foundation.