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EZ is as EZ does! The launching of an automation products competitor

01/27/2005

fter five years of being best buds, and helping to make AutomationDirect.com a huge success, Shalli Kumar, CEO of AVG Automation, is taking the big direct reseller of automation products on as a competitor. His new catalog looks startlingly like ADC’s, with little red and green “thumbs up/thumbs down” indicators on specification comparisons, and little red and green men in hardhats. Sound familiar? Well it should. And why does this stuff sound familiar? Because EzTouch and EzText products made by AVG have been sold by AutomationDirect for years.

“We launched on January 24th with 400 products and a 340 page catalog,” Kumar said at a press briefing recently held to introduce his new division, EZAutomation.net. “We have spent a lot of money getting ready for this,” he noted, “and we have some special features nobody else has, like extended hours for same day shipping, almost instant order acknowledgement, and a large and experienced tech support staff.” In fact, he noted, “it is the same support staff that has been backing up AutomationDirect for EZTouch and EZText products for years.”

EZAutomation may look like an AutomationDirect clone, but the equipment has significant differences. Instead of private labeling a PLC line, like ADC’s use of Koyo PLCs, AVG Automation is itself a private label manufacturer, and decided to produce a PLC line of their own.

“We can do that because our Uticor division was one of the first developers of programmable controllers and we have the patents to prove it.”

When asked about his new vulnerability to the Solaia patent now that he is making his own PLC, Kumar said, “If they show me their patents, I will show them ours. I am not worried.”

Kumar’s designers have taken some risks with the PLC design. Instead of the familiar and very slick looking “brick” designs made ubiquitous by Allen Bradley and the other manufacturers, EZPLC and EZTextPLC are relatively homely. This homeliness will likely turn to comfort as end users find that the designs are very easy to modularize and customize, and have significantly larger Phoenix Contact terminal blocks, in a very technician-friendly design.

But end users will really be shocked at EZAutomation’s pricing. Beginning with a new 12-bit, 4in/4out analog I/O module for $99, EZAutomation’s products are priced below the bargain basement. Depending on the product, Kumar says, “we are anywhere from 10 to 60% below everybody else, including AutomationDirect.” An example is the new EZCE TouchPanel operator panel. Intended to compete directly with the Allen Bradley VersaView and the GE QuickPanel View, the EZAutomation offering is almost $1200 less than the AB panel, and nearly $600 less than the GE Fanuc panel, comparing list prices.

Is the divorce amicable? It is, according to Kumar. He says he has given strict orders that there will be no badmouthing ADC by his people, and that he wants to continue working with ADC on the product lines they currently sell. Does Kumar expect to hurt ADC? “Not really,” he says, “I expect there is more than enough room in the direct selling model for the two of us.”

It can only benefit the end user and system integrator community to have another direct reseller with a similar model to AutomationDirect, Kumar says, and he believes that the market will expand to support both companies.

He also says that his model is really "Dell meets Best Buy," having already signed up a bunch of VARs. "Direct pricing, but with local service worldwide," he said, "is our key to being better."

Is he right? And is he willing to put the money up necessary to overcome AutomationDirect’s huge marketing machine and brand strength? He says he is, but we shall see.