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e-Xpertise in Industry Issue #28
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In this issue...
| Feature Article: |
Looking East for 2006 and beyond…: Nick Ballard looks at wordwide trends in the Engineering Applications market |
| Hot Topic: |
Security vs. Risk: Bob Brown looks at the security threat to the IT industry and comments on its response |
| Book Review: |
The Way of the Dog by Geoff Burch is reviewed by Allan Behrens |
| Noticeboard: |
COFES India: 17-18 Nov 2006, New Delhi, India |
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Quote for Today
Give
every man thy ear, but few thy voice. William Shakespeare.
Feature Article: Engineering Applications software - Looking East for 2006 and beyond…
Two recent events illustrate worldwide trends in the Engineering Applications market. Firstly Indian conglomerate Tata's bid for Corus, and secondly the closure of a leading consultancy's CAD group.
When we look at Asia, most people cite China as one of the primary engines of world manufacturing growth. Tata's bid reminds us that India is also a significant part of this growth phenomenon. For applications vendors, economic growth, both in international and domestic markets, drives demand for their products in Asia. Capturing this demand whilst making money presents significant challenges for vendors in the Asian market.
The closure of a consultancy's CAD group appears to imply that CAD is so well understood that there is simply no value in advising companies on CAD alone. To a certain extent this may be true - "CAD is dead; long live PLM", is the new mantra we hear from many vendors. However in emerging markets like India and China, most pirated engineering software is basic 2D and 3D CAD. Whilst revenues from basic CAD are low, its use is far more widespread; anti-piracy measures may be more effective at increasing revenue than increasing sales resources in the short-term. There is still money in CAD!
Whilst developed economies are looking beyond design into process efficiencies, emerging economies are still investing in basic design and manufacturing technologies incorporating local standards and languages. This is where local developers, often largely invisible to outsiders, hold an advantage. One area where international vendors enjoy some success is in manufacturing applications. As more complex shapes and parts are required, CAM vendors are partnering local expertise to get a bridgehead into what may become their biggest market in the future.
So just how big is the opportunity?
- In absolute terms, our worldwide engineering applications estimate for 2006
is $9.25bn and our forecast for 2007 is currently just over $10bn.
- As a proportion of the world-wide market Asia grew from just 19% in 2001 to
nearly 23% in 2006.
- Worldwide revenue growth in 2005 was 15%; Asia grew at over 21%, compared
to EMEA and North America's 13%.
- For 2006, Asia is returning growth of 16%, above that of both the other regions
and a worldwide figure of 13%.
- Looking forward to 2007, we estimate low-double digit growth for Asia, compared
to a worldwide estimate of less than 10%.
Some of you may have witnessed the disruption caused when new hand luggage restrictions were imposed at all UK airports. Amongst the many articles that subsequently appeared in the press, one in particular stayed with me. It considered terrorism in a strictly mathematical fashion and suggested that the scale of society's response is wholly out of step with the size of the threat - a point of view you might not be willing to accept.
There is an interesting parallel with the issue of computer security. In this case, conversely, it would be possible to argue that the IT industry's response, in general and at least so far, is wholly inadequate in the face of the size of the threat. We are told "risk" is a very important issue for a very well-governed business.
In both cases the response - at least in practical terms - is more about how risk is perceived than the actual level of risk. Viewed dispassionately, the actual threat of terrorism is slight - almost insignificant when compared to say, road traffic accidents. The number of people who set out to do harm is tiny.
In the corporate world the situation is very different - both in terms of scale and intent. Staff do not set out to do harm. They regard insecure actions as no more than a slight infringement of rather pedantic company rules. The number of staff who think like this could be very large - a significant proportion of total staff. Through their actions, they may easily become the unwitting accomplices of people whose goal is not disruption but gain. The whole nature of the security threat against the business has changed in recent years - away from the rather quixotic image of the amateur hacker to the altogether much more sinister face of organised crime.
The "compliance" marketing messages miss the point. They focus on the perception of risk; the need to please investors and regulators. There is no consistent global framework of law or regulation that makes it necessary to disclose computer security incidents although regulatory requirements like Sarbanes-Oxley Act of 2002 (SARBOX or SOX) and BASEL II both require these security infringements to be reported, logged and the actions monitored. But marketing messages from the IT industry are about maintaining the paperwork rather than using the information to reduce the risk of losses.
It is obvious that the only way to reduce risk and loss
is to learn from security failures - just like in manufacturing which has embraced
continuous improvement or Kaizen promoted by Deming. Marketing messages that
focus on the gains from upgrading security rather than the cost of doing the
minimum to please regulators would make a refreshing change.
Book
Review: The Way of the Dog by Geoff Burch
ISBN 1-84112-576-8, Cost £7.99. Capstone Publishing
2005
Using a metaphor to lead the reader through the learning process is not a new idea. Memorably, Selling the Wheel is an effective example. The metaphor in "The Way of the Dog" is that of a salesman being portrayed as a sheepdog wending his way through the sales process. The analogy of herding sheep (Customers) to a pen (Sale) is nothing if not interesting!
The book and writing style will suit those starting in sales.
It avoids describing sales processes, reams of strategic considerations and
those boring funnel diagrams. For those of us that have read the books and seen
the films many times before, some of the messages reinforce (dare I say remind
us of) some of the basic principles of sales.
A more typical target reader is my good lady wife who picked up the book in
a moment of boredom and consumed it, in its entirety, in one sitting. She thought
that the book was interesting and informative, but somewhat simplistic - suited
to someone that wanted to know some of the basics of selling without the more
complex overheads, such as those that describe the earlier stages of customer
acquisition. She was very positive about the experience. The book is easy to
read, concepts are clear and the main points are highlighted by large notes
that reinforce messages in the text.
The book skips some of the up-front aspects of selling
such as marketing and prospecting, but I would recommend this book to those
wanting to grasp the fundamentals of the selling process in a memorable format,
in about 4 hours. Perhaps technical team members or sales support personnel
would particularly benefit.
COFES
India: 17-18 Nov 2006, New Delhi, India. This event will shine a light on
how the world’s engineering software community needs to address the engineering
issues facing India. Cambashi's Allan Behrens will attend this event.
MICAD:
5-8 Dec 2006, Paris, France. An International Exhibition for CAD/CAM, Tools
& Methodologies for Product Design, Manufacture & Lifecycle Management.
Technology
for Design and Construction: 22-26 Jan 2007, Las Vegas, USA - World of Concrete
Exhibition and Seminar.
World of Industry has been split into two events: the first covering machinery,
welding, surface treatment and materials handling; the second covers automation,
electrotechnology and Hydraulics/pneumatics:-
WIN 2007
(MWSM): 24-28 Feb 2007, Istanbul, Turkey
WIN 2007
(AEH): 8-11 Mar 2007, Istanbul, Turkey
GITA:
(Geospatial Information & Technology Association), 4-7 Mar 2007, San Antonio,
USA
CeBIT: 15-21 Mar 2007,
Hanover, Germany - billed as the world's leading trade show for solutions, products
and services from all areas of IT and telecommunications.
A full list of industry events can be found at IT industry events on the Cambashi website