Rapid Prototyping and superior T&M skills needed for Hardware Startups!

As India fever gets really going for high evaluation startups,we start wondering that if we are going to see the valuation bubble burst like Dotcom in late 90s.Is there a real development of technology,injection of real equity and is real value creation happening here.? Or there is lot of hype,hot money and Ho hoopla about online marketplace? These are some genuine questions and people with traditional mindset ,who look for RoI and established corporate principles critically look these startups gobbling unlimited money like anything!

Well there is another way we can look at these startups.Most and almost all are software types.Aggregators,Cloud exploiters and virtual world people are entering all sectors-from garments to real estate- and creating daily the companies we call "Unicorns" overnight.No of employees are not important the intellectual capital is.Everybody thinks they need to just go on expanding customer base by investor funds and platform efficiency.The interesting thing is the startups based on the hardware development are missing.Hardly 25-30 companies are involved in hardware compared to overall figure of 4000 or so.

Reason is very easy to spot.Hardware is hard.The ecosystem to support sourcing,components testing and inwards inspection,Rapid prototyping and testing/quality assurance is next to nothing here.Both Chinese tech cities and Taiwan traditionally cater to all analog/digital components and thousands of job shoppers doing subcontracting for any company.No doubt all mass markets of mobile etc are being nurtured by these centers.Contrast this with situation at home where neither testing infrastructure nor the quick protyping can be conveniently done.

For us the better bet will be to get hardware stuff done in China or some other less expensive place and seek customers in India.Design and conceptualisation can happen in India and we can get investors anywhere,for markets near here.Silicon valley Bangalore remains the best bet to us.Startup capital of India will be good for finding T&M infrastructure too,as the demand for rapid prototyping grows overtime.

Hopefully the modest hardware startups will also trigger need of niche T&M companies and their services!

Restructuring of Global T&M industry triggers new markets!

The Global T&M industry is going thru many unprecedented changes,particularly since the beginning of this decade.The factors causing the changes are both technical,product attribute changes and the commercial economics one too.The technological changes are happening both due to space miniaturization of components as well as the new modulation and multiplexing schemes. A good base
is framed what kind of T&M technologies are likely to dominate by mapping the Moores Law alongside these.

Instrumentation value adding started happening when automation to standalone instruments was done thru HP-IB and later other IEEE standards.Inthe late 90s the compliance and performance instrumentation and systems were evolved.Now of course in the current decade the Internet of things and newer generation 4G onwards will dictate the choice of new designs.

Accordingly the T&M software and services companies will have to closely work with hardware OEM companies and discover customized solution for these technologies.Because of so much froth
in the industry and merger and de mergers no body is certain who will survive or who will get to retain the umbrella brands.The game will be driven by the cash and market share accretive ess of these financial deals and there are limited target and acquirers in the mature T&M industry.

These developments happening since beginning of 2010 are giving continuous challenges as well as many latent opportunities to expand the size of the market overall.It really boils down to individual companies capability to restructure their product generation teams and arrange financial model to increase the T&M top line.

Let us keep a tight watch. Many interesting things will happen in this year itself.

Clearance of Defense Manufacturing will boost T&M in FY16 onwards

Finally under new Governments completion of one year is starting to show some actions on the ground.We are seeing that there is around activity on license to manufacture and assemble all kind
of equipment from aircraft to helicopters and also lot of strategic Electronics.Only today they have
cleared as many as 16 projects worth 613 cr of investment.All these startup activity will naturally
have the Capex and so T&M equipment investment of high tech variety.

Stat wise the Government seems to have cleared 73 industrial licenses compared to just 50 between 2011 to 2014 May.More importantly the technology content is lot higher and local manufacturing is emphasized.The period of licensing is bigger too and so liberal view is taken.

Foreign investment is allowed to be upto 49percent and exceptional cases to 100pct.Mostly up to 49
percent is very attractive in these tech cases.

I think the T& M companies have an opportunity to sit and discuss with the manufacturers the new range of manual and automatic equipment immediately.

Digital India and Make in India intersect at Tested in India for boost to T&M

We have earlier talked about manufacturing and design clusters in the Electronics and Semiconductors domain.The Government is taking big strides in going ahead with attendant investment in this effort.The idea is to derive deserving revenues for the industry by appropriate
Infrastructure and other ecosystem here.

Good amount of proposals have turned up for both normal investment and approvals have been given
For about 9000 crore.20 to 25 percent incentive is available on the capex programs in SEZ and non SEZ activity.Of course one has to seize of the derivative opportunity in manufacturing locally if we want to draw linkages between mobile population,attendant service revenues and what is locally produced between devices and networks.

The key to all sort of manufacturing will be our ability to produce Quality Equipment progressively
In India and bring down the cost compared with imported full fledged equipment and devices here.
A good amount of value engineering and economics has to be factored in so as to increase value intact.All aspects of design,engineering and sales/marketing have to be compared ahead of pure kit assembly and testing.So all aspects of land,building and power have to come in before a product is shipped out the door.

Testing the preassembly and assembled systems is the core manufacturing activity in manufacturing.
T&M equipment for manual and automated testers will be required in these clusters where Government is envisaging RS 65000cr of investment proposals.Lot of money will be spent on Capex.

It is our industry's job to keep tab on these closely and come up with Solicted and Unsolicited proposals to units located there for T&M.All the best.

Make in India and "Tested in India" create opportunities for FY16

A continuous thrust to produce the high technology IT and Telecom Network Elements and devices here in India is creating T&M opportunities in FY 16 and beyond.Whether it is local home grown mobile devices manufacturer or the Apple outsourcer Fox Conn all are curious about India.The chief reason being they want to operate as closely as possible to the 970 million mobile customer base as possible.There are at least 160 Smartphones connections and in equal numbers are the net connection users.Both the factors are helping the general aggregator industry-including e Commerce grow well here.Obviously we can see sliding price points and so the competitive local manufacturing as the time passes.

One of the possible outfall of competition locally is the proliferation of Eastern Manufacturers from China, Taiwan, and Korea in the consumer markets.This requires that the local authorities ensure the consumers better quality safety and competitive prices.A big quality test center becomes the pre requisite to ensure hardware,software and malware are tested and certified before shipping to the customers.The labs are to be supported by the user department and often funded by the telecom/IT entity overseeing them.

Malware/Spyware related testing is important for network elements and devices originating from China .Western manufacturers are slightly safe from that criticism because of long presence in telecom sector and their installed base.New upstart companies from China and also from Taiwan will face the initial hiccups and therefore a quality assurance setup supported by the parent telecom ministry will be helpful.Let us also ensure necessary test gear to check quality,safety and other standards are managed through these test centers.We derive good opportunities here to sell the T&M services and other hardware related to testing.Watch this space for more.

Opportunity to create new T&M solution in ipV6

India has cashed on in FY2K the opportunity when the Computer industry needed an IT solution for getting over the date stamping challenge in the computing Machines at the turn of the last millennium.Our fledgling industry with army of coders available were handed this challenge and almost overnight lot of outsourcing work came to Indian Software coolies for porting and other rectification so.India found for herself a new identity as a new industry was getting borne to either serve from India or serve "on site" wherever the client was located.Surely and Silently,an youth from India saw the opportunity and big bucks in the IT industry then.Rest is history and today the industry
Majorly as a Service Industry boasts of 120Billion revenues for the country!

Whenever such like discontinuity occurs,there is always need for new solution to the problems.The solution in our industry can be in new development of hardware,or software/services or both a combination of the two plus some additions.The technology industry has become a breeding ground for new problems rand so new solution opportunities for everybody- the Designers,Manufacturers,the Venture Capitalists or the Governments wanting to create jobs in their local economies.Scaling of these is possible if the technology is robust,inexpensive,exclusive and suits the Economy.Recent Examples have been block buster disruptions created by Apple in iPhone and now on the Apple Watch.

ICANN is now running out of web addresses because of insufficiency of IPV4.The new standard will be IPV6 which will not run out of numbers needed.IP addresses will be always available in this domain,but there will be porting or some other modification is to be done in the existing hardware or a new hardware/ software combo needs to be created.New specifications have got almost unlimited possibilities of IP addresses.Many countries have moved over to new system and many are moving.

There is a possibility that the modification solution will involve hardware,software or both.And that will be at the intersection of IT,Telecom and T&M technologies and in fact can be a powerful scalable and big opportunities for industry,like the set top box for the domestic TV industry.Retrofitting the old existing hardware with new device can be a possible solution or creating a patch over the box can be yet another.

Whatever that may be,an opportunity for developing a technology and viable solution does exist here.
And the skills of IT and T&M will come handy for both conceiving and manufacturing the device for commercial exploitation. Will someone take the ball?

T&M Industry can learn and appreciate the Disruption from eCommerce

If we examine closely the way new economy companies are basing their business model on,we find most of them are tech driven,high on software and uniquely disruptive in nature and innovative.They don't necessarily need lot of physical assets or very expansive factory resources.They really fill the customers unmet need by choosing to operate in the so called "white spaces" left u utilized by traditional players.

For example most of the chip companies don't have their fab.Taxi aggregator like Uber with a 50B valuation on its map don't have a single vehicle.Facebook doesn't have any content.Airbnb doesn't have any real estate.Whatsapp doesn't have its servers even though they transmit 3B messages per day.We can go on like that . So everywhere we find Disruptions of all kind.

Hardware,factories,Large warehouses,Factories of yesteryear so and Big Telecom Networks are really
a thing of the past,as the original purpose for which they were needed are getting met by some other innovative model,thinking,process or plain redundancy!

So, the point is we don't have to be a T&M hardware company to supply those services or the boxes of goods meant for testing and measurement.Can the same job be done by a consulting approach,or removing the function,or creating a business model by outsourcing the process,and the manufacturing.What we need is IT capability of extra-ordinary nature and a supply chain which brokers information on Engineering or Management overall to achieve same intended objective much
inexpensively and scalable manner.A combination of Internet,Mobile Technology, Location Knowledge and Broadband Everywhere can do the trick.

How we will actually apply these to basically a box company? Watch this space in few writings ahead!