The electronic test and measurement (T&M) industry has been taken by storm lately, with trends such as Internet of Things (IoT), millimeter-wave (mm-wave) frequencies, and 5G suggesting significant changes in requirements for test equipment, thus opening up opportunities for vendors.
Used across the life cycle of a product, from research and development (R&D) to manufacturing to deployment, test and measurement instruments are critical to ensure product performance and shorten time-to-market (TTM) although customer requirements differ widely across these segments. Generating about $2 billion globally in 2015, the R&D segment of the new general purpose test market is expected to witness single-digit growth rates over the next 5 years that will steadily accelerate and results in the market reaching $2.4 billion by 2021. The R&D T&M market will benefit from high-speed digital trends and a revitalized bit error ratio tester (BERT) market driven by the data center buildout with the emergence of 400 gigabit Ethernet (GbE) technologies and complex modulation signals such as Pulse Amplitude Modulation (PAM)-4. Although the R&D T&M market relies heavily on the oscilloscopes market, the contribution of radio frequency/microwave (RF/MW) test equipment to the revenues, especially that of signal analyzers, will be much greater 5 years from now. RF/MW test and measurement equipment such as signal generators, network analyzers, and power meters will also benefit from the move to higher frequencies and wider bandwidths due to the advent of disruptive technologies like 5G, but also by a general move towards higher frequencies in aerospace and defense (A&D), automotive radars, and other industries.
In manufacturing applications, test and measurement equipment vendors have faced a tougher environment, with stiff competition due to lower technical requirements in comparison to the R&D segment. One of the greatest challenges ahead though is to make the testing of mm-wave frequencies cost-effective in the mass production environment. This challenge will grow in importance over time and become more significant with the deployment of technologies such as 802.11ad (WiGig) and 5G. In the short term, IoT generates plenty of challenges for manufacturers. Many are struggling to add connectivity to devices that have never been connected before. They lack expertise in RF and related fields. There is also significant price pressure from the consumer that impacts the entire value chain. Manufacturers are thus looking for cost-effective solutions from T&M OEMs, who must provide such solutions while addressing more complex technologies that drive costs up. With the wide variety of IoT, manufacturers also require solutions with extensive capabilities and flexibility. Plagued by a host of challenges, the manufacturing environment presents significant opportunities to T&M for innovation. Outside of providing faster and less expensive instruments of higher performance, one of the key opportunities for T&M vendors in the manufacturing environment is to provide expertise. There is a strong desire across industries for using the huge amount of data being generated by manufacturing operations to improve production yield among other metrics.
Key Opportunities
Increased Penetration of Modular Instrumentation
The advent of more complex technologies and efforts to reduce the cost of test and TTM are expected to continue to drive the growth of automation across industries, expanding the addressable market for modular instrumentation. In addition, measurement speed, flexibility, and other aspects of modular instrumentation contribute to driving demand for such instrumentation over traditional equipment, fueling the growth of this market. Among the different standards that make up modular instruments, PXI certainly stands out. This market is expected to witness double-digit growth over the next 5-7 years, growing from $702 million in 2015 to $2.2 billion in 2022 (Figure 3). While the PXI market will witness significant growth over the next few years, it will also transform itself, making foray in R&D. Primarily a replacement play in the manufacturing environment up until now, PXI is expected to evolve towards a more balanced footprint across R&D and manufacturing spaces over time. It is seeing increasing adoption as an R&D platform due to greater complexity and flexibility requirements in such applications.
Differentiation through Software Gains Importance
New business models are also set to revolutionize the T&M industry over the next decade. While the higher complexity of technologies across industries has called for a higher demand for test, the new test and measurement equipment market has not witnessed proportional growth. There are several reasons for that, including software upgrades, which have become the norm in the industry and extend the useful life of instruments. With rapid changes in technology, customers became increasingly concerned about the longevity of their equipment, driving suppliers to offer software upgrades. Software upgrades are now common in the industry to add functionality to hardware over time and keep up with changing test needs. Differentiation through software will become increasingly important. From a business model perspective, this is expected to evolve to software-as-a-service (SaaS) and cloud licensing.
Growing Demand for Rental and Leasing Services
Another reason why the new test and measurement equipment market has not witnessed the growth it should have seen with the proliferation of smart products and ubiquitous connectivity is the growing awareness about expenses and use related to test and measurement equipment. With the economic downturns of 2002 and 2008, test and measurement made its way to the radars of financial directors and controllers, driving scrutiny over this large capital expense and related costs. Companies have been more attentive to usage of those assets and devised strategies to better manage it. As a result, there has been growing awareness about different acquisition means, including rental and leasing services. While currently low, the penetration of such services in the industry has steadily increased; it is expected to continue in the future and could reach 30% eventually. In 2015, this market’s revenues ranged between $520 and $540 million for North America and Europe. While a large proportion of this market lies with field applications, both R&D and manufacturing applications represent opportunities for rental and leasing services. In research, one-off projects hold potential for rental services and the price tag and fast evolution of technology present opportunities for leasing services in development applications. In manufacturing, companies requiring high flexibility, dealing with seasonality, and having a high focus on cost provide opportunities for such services.
Steady Growth of Calibration and Repair Services
Other services offer T&M OEMs significant revenue opportunities, notably calibration and repair. This market has been growing steadily over the past few years, feeding off the large installed base of test and measurement equipment worldwide. Despite lackluster growth in the new electronic test equipment market, T&M OEMs continue to sell millions of dollars’ worth of equipment on an annual basis and customers looking to use their equipment longer increase their demand for calibration and repair services. Moreover, requirements for higher product quality and safety continue to increase. High-tech products are also growing in importance; their higher complexity calls for the use of more complex and accurate instrumentation, requiring more complex calibration routines and procedures as well as tighter calibration intervals to limit the number and importance of out-of-tolerance (OOT) issues
Big Data Analytics Solutions and Services
Beyond traditional services like calibration and repair or rental and leasing services, big data analytics solutions and services can greatly benefit companies across industries, to improve their operations across departments as well as their competitiveness by enabling them to improve product/service quality and shortening their TTM. Test data is a goldmine for improvements that has been largely untapped. It can help streamline the development and manufacturing process and reduce waste, thereby improving productivity. Many organizations have realized that they could benefit tremendously from leveraging test data and some have developed in-house systems to harness it. These are typically in the form of databases where test data is stored and programs are run to generate the information they need. However, they lack awareness about what is possible. With the commoditization of hardware, expertise in big data and predictive analytical models will become a competitive advantage for vendors.
NI is the leading vendor of the Electronic T&M. NI offers smart platform and solutions for New Test Applications. Raghunandan N V, Technical Marketing Engineer, National Instruments India highlights:
NI is committed to its mission to accelerate engineering success across the various elements of its expansive ecosystem by providing an open, software-centric platform that leverages modular hardware. 5G Wireless, Semiconductor Testing, Connected Vehicles and Internet of Things are some of the key concentration areas for NI going forward.
We are experiencing convergence of multiple systems to form ‘super-systems’ or system of systems across industries. To test these complex network of systems, organizations are turning to smart test systems that scale with escalating requirements to continually shorten time to market and drive down costs. NI provides tools and systems that enable organizations to build these smart test systems by leveraging a platform consisting of productive software & modular hardware. Our customers have used NI’s tools to successfully reduce development time, designing high quality products or lowering design costs across Automotive, Aerospace & Defence, Electronics & Semiconductor, Research and Wireless.
In-order to outsmart the Device-under-test with Smarter Automated Test Systems, test engineers are turning to test platforms that provides a higher starting point while reusing core functional elements and commercial-off-the-shelf technology. Having a productive software at the heart of the ecosystem where more and more capabilities of the test & measurement hardware provides extreme flexibility while keeping pace with innovation of your smart devices. For example, LabVIEW at the centre of NI platform and ecosystem allows the users to not only define the functionality of the modular hardware while building smart test systems but also provides users a graphical and intuitive way to acquire data and analyse it to derive engineering insights very quickly.
Other leading vendor Keysight India has been growing at almost double the market growth rate.Mr. Sandeep Kapoor, Country Head – Marketing and Business Development, Keysight Technologies India Pvt. Ltd. shares:
We live in an age of rapidly evolving technology and test and measurement domain has continuously leveraged from and contributed to cutting edge technology.
While the technologies that will constitute 5G are still being worked on, the ITU-R has identified three main usage scenarios for 5G: Enhanced mobile broadband with up to 20 Gbps peak data rate, massive machine-type communications and ultra-reliable and low latency communications. To meet the requirements for this next generation of mobile communications, researchers are looking to a wide range of enabling technologies in RF, microwave and millimeter-wave frequencies – ranging from advanced waveforms and multiple access schemes to multiple antenna techniques such as massive MIMO and beamforming. Being first and best in 5G depends on tools that help in exploring new signals, scenarios and topologies.
The intelligent and connected car is no longer a futuristic concept, but an exciting reality. With increasing levels of electronics enabling sophisticated navigation, safety and infotainment features, the industry is witnessing one of the fastest convergence of automotive and energy technologies. We are talking about technologies like 5G, 802.11ac WiFi, BroadR-Reach, MOST150, CAN, LIN, FlexRay and more. These technologies will drive innovations in vehicular safety and performance, with conscious efforts to economize energy usage and create a sustainable and environmentally friendly paradigm shift in powering automobiles.
It is estimated there will be more than 30 billion ‘Things’ or smart objects, the building blocks for IoT, everywhere and always connected. IoT applications, like smart homes and healthcare, are already gaining popularity in the consumer market. Ongoing advances in the technologies enabling the IoT are giving way to a wave of new and unimaginable applications for both the consumer and enterprise markets. At the same time, software and services, hardware and connectivity are evolving rapidly. To fully leverage these advances, IoT device designers and developers need tools and solutions to help them overcome the complex design and integration challenges, thus enabling their fast and successful development and deployment of IoT devices.
Demand for increased network bandwidth in data centers continues to grow. Providing 400 Gb/s, also called 400G, links will be the next step in meeting the continuing need for increased network bandwidth in data centers. Multi-level signaling formats such as Pulse Amplitude Modulation (PAM-N) are technologies that will enable 400G implementation. However, the revolutionary switch from non-return-to-zero (NRZ) to PAM-4 presents many new design, measurement, and test challenges.
As technology evolves so do the challenges in detection, avoidance, electronic warfare and countermeasures. In all cases, the testing of today’s systems will benefit from high-performance test equipment. To meet present and future mission requirements, the countless unique radios of the past are giving way to compatible, multi-mode or software-defined digital systems that ensure easy interoperability. To keep pace, measurement solutions must be able to test these versatile radios throughout their lifecycles. Ever-faster growth in the types and varieties of wireless technologies poses an escalating challenge for intelligence and homeland-security agencies. Whether the mission is intercept and collect, detect and eradicate, monitor and track, or trend and analyze, it is very important to have an edge that increases the probability of earlier detection, assessment and response. The space industry is experiencing disruption not seen since the original space race of the 1960’s. Numerous new companies are gearing up to provide space-based capabilities with new risk profiles, increased volumes and decreased costs. Established companies are adapting to take advantage of the New Space opportunity. Lower development, production and launch costs are critical keys for success for all.
Keysight Technologies helps customers bring breakthrough electronic products and systems to market faster and at a lower cost. Keysight’s solutions go where the electronic signal goes, from design simulation, to prototype validation, to manufacturing test, to optimization in the network. Our customers span the worldwide communications ecosystem, internet infrastructure, aerospace & defense, automotive, semiconductor and general electronics end markets.
Investing in innovation regardless of short-term market challenges is a critical element to our future success as a company. Keysight Laboratories is the central applied research laboratory of Keysight Technologies, dedicated to providing breakthrough competitive advantages that result in market leadership and value for customers. Keysight Laboratories has a broad research portfolio, spanning the company’s fields of interest as well as exploring new areas of opportunity. Current research themes include software, heterogeneous computing systems, human-computer interaction, wireless, ASICs, DSP, photonics, imaging, and modeling. Spanning a range from more basic research to advanced development, Labs’ portfolio is centered on applied research that is focused on breakthroughs that enable superior measurement solutions.
Keysight Laboratories is staffed by a team of world class researchers, including 4 IEEE Fellows and 2 Keysight Fellows. The research team has deep expertise across a broad range of technical disciplines, including RF & microwave, wireless, photonics, ASIC design, measurement science, distributed measurement systems and software.
Software solutions play a vital role in our business strategy. We are committed to investing in this area and expanding our software portfolio. This is an ongoing effort, and the advancement we are making in these areas can be seen in our new product introductions.
Our strategy to grow in software business took a major step forward when we acquired Anite. Anite is a leading supplier of test and measurement solutions to help customers develop software and optimize performance in the wireless communications market. This acquisition expands our solutions offering in wireless R&D design and test, specifically into the software layer for design and validation. Coupling Keysight’s expertise in helping customers design and test hardware, with Anite’s leadership in helping the same customers design and test software, we now provide customers with the most comprehensive wireless solutions for both the hardware and software layers.
Keysight’s design and simulation software is used by two-thirds of the world’s high-frequency designers. Keysight EEsof EDA is the leading supplier of Electronic Design Automation (EDA)software for communications product design. RF, microwave, Signal Integrity, Power Integrity, device modelling, and signal-processing design engineers create betterproducts faster using design flows built on our system, component, and physics-level design tools. We offer complete design integration for products such as cellular phones, wireless networks, radar, satellite communications systems and high-speed digital wireline designs. Applications include electronic system level (ESL), Signal Integrity, Power Integrity, RF-Mixed signal, device modelling, RF and Microwave design for commercial wireless, aerospace, and defense markets. Keysight measurement application software for instruments and PCs provides faster insight across industries, technologies and lifecycle phases.
While the test and measurement industry in India has been growing at a rate of 5-6%, Keysight India has been growing at almost double the market growth rate. Some of the key segments where we have seen growth are Communications, Space and the non-conventional industrial segments like automotive.
