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Business lessons from an MIT professor

Friday, August 28, 2009

Posted by John McHale

Last week during a visit to SynQor in Boxborough, Mass., I received a lesson on cost-of-ownership by the company founder, who is also a former Massachusetts Institute of Technology (MIT) professor. SynQor makes high-reliability power electronics for demanding environments such as military avionics.

Martin Schlecht, SynQor's founder, president, and chief executive officer (CEO), was briefing me on their DC to DC converter product line and the defense market outlook when he asked if he could go slightly off topic and explain the concept of how long-term cost-of-ownership for a product can be more cost effective than buying the lowest price device.

He jumped up and immediately started drawing charts on the whiteboard in the conference room. I quipped "why don't you have a chalk board, you're a professor right?"

He said he has one in his office and that he prefers chalk boards -- the only draw back being that the "chalk dust always ends up in the cuffs of his pants."

Anyway, Schlect made the argument as he says he has made on many sales calls that products with outstanding mean-time-between-failure (MTBF) statistics result in a lower cost of ownership for the end user over the life of a product.

Schlect made a very persuasive argument with his makeshift graph and had me sold that a component with an MTBF of millions of hours can cost only about $3 to maintain even if it initially cost $3,000.

However, he says no matter how well cost of ownership is explained or understood, many of those in the defense community are under orders to procure electronics based on the product price rather than a cost-of-ownership equation.

Too bad, maybe a greater focus on cost of ownership would help with managing component obsolescence, the dark side of commercial-off-the shelf (COTS) procurement.

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GE and Fanuc call it quits

Tuesday, August 18, 2009

Posted by John McHale

As of yesterday GE Fanuc Intelligent Platforms is now called GE Intelligent Platforms after GE and Fanuc reached an agreement to no longer continue their original agreement.

What does this actually mean for the embedded military market? Probably not much.

I think GE Intelligent Platforms will pretty much go along as they have been going, making embedded single-board computers and subsystems for military programs. GE itself has become quite the defense behemoth. A recent market study from ASD Reports ( ranked them as one of the top 10 aerospace and defense suppliers alongside Lockheed Martin, Boeing, and EADS.

However, all of this has got me reminiscing about some of our old friends and advertisers gobbled up by GE Fanuc this past decade.

Some of those old friends included -- in no particular order -- Radstone Technology, SBS Technologies, Ramix, VMIC, DNA Computing Solutions, and Computer Dynamics. If I missed any I apologize.

That's quite a shopping list. Curtiss-Wright Controls Embedded Computing compiled a similar portfolio of defense electronics suppliers. I guess they saw our magazine as a buyer's guide.

I'm not complaining. I think all this activity is a positive. It shows our market to be one that is steady and continues to attract investment. The strong performance of many defense companies in the current economic downturn is evidence of that.

Yet it has me wondering which embedded defense supplier will get acquired next.

Any ideas?

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Unmanned systems show was buzzing

Thursday, August 13, 2009

Posted by John McHale

What a difference a year makes. Last year's Unmanned Systems North America show in San Diego was informative and well attended but seemed to be reflecting some of that Southern California June gloom. This year it was just the opposite with packed stands and busy aisles.

Maybe it's the fact that it is in Washington where unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), and unmanned undersea vehicles (UUVs) attract more government and definitely more local press.

Highlights at the event include General Atomics discussing the new Predator C Avenger, iRobot officials announcing more orders for the Packbot unmanned ground system, and Insitu's ScanEagle surpassing 200,000 operational flight hours.

"In a year when people are wondering where the funding will come from funding for unmanned systems is one are that is definitely going up," one defense electronics supplier told me.

Every exhibitor I've talked to says traffic is strong and people are looking to spend money for autonomous programs.

Lots of non-traditional defense companies are also angling for a piece of the action. Sony, the maker of popular camcorders and televisions and monitors had a nice sized booth at the show.

No they weren't pushing flat screens, but rather they were showcasing their machine vision line of high-performance cameras for use on UAVs.

It's a market "we're exploring that has a potential for growth," says Drew Buttress, product manager for visual imaging products at Sony. He says Sony understands the military market and its long life cycles and that Sony supports its machine vision products for the long-term, still selling cameras that are nearly 10 years old.

It's heartening to go to a crowded trade show in a tough economic time. Maybe it's sign things are turning around.

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Posted by John McHale

The next-generation PowerPC family from Freescale, the QorIQ, has a new CPU core -- the e500 -- which does not support the Altivec engine that commercial off the shelf (COTS) single board computer suppliers rely on for many of their military digital signal processing (DSP) systems. The Altivec is not being end-of-lifed, it is just not being offered in Freescale's next generation chip.

Designers that produce Serial RapidIO switched fabric interconnect products are especially concerned as the main alternative -- Intel's family of multicore devices with SSE -- do not have Serial RapidIO (SRIO) end points because Intel does not see the demand form the majority of their customer base, Michael Stern of GE Fanuc Intelligent Platforms told me. I was interviewing Stern for a Technology Focus feature on I/O that will appear in our September issue of Military & Aerospace Electronics magazine.

Stern says "whereas Freescale and Texas Instruments and other chip vendors have seen demand for Serial RapidIO enabled end points from a significant segment of their market -- defense and telecommunications -- Intel has not so far seen the need to support SRIO on chip."

This is not surprising as SRIO is most popular among military signal processing designers. During a panel discussion at our Military & Aerospace Electronics Forum conference last year Ron Parker of Intel said that the defense industry represents less than one percent of Intel's business.

Stern and others I talked to for the story agreed that going forward COTS embedded single-board computer suppliers will need to support multiple serial interconnect fabrics in addition to SRIO such as Gigabit Ethernet, 10 Gigabit Ethernet, and PCI Express -- all of which Intel does support.

Some companies are working around this issue with a PCI Express to SRIO bridge/switch device but these devices are not yet available and those designing them are tight-lipped about what they are tinkering with.

Another solution Stern says is to offer FPGA based solutions that deploy custom IP to get from PCI Express to SRIO, however FPGA based solutions present a challenge because they "are costly in terms of power budget and card real estate."

In the mean time Freescale's QorIQ will be relevant to defense applications where the Altivec unit is not used, such as image processing, but not in intensive DSP applications, Stern says.

I'd love to hear what all of you think about this situation, so please feel free to comment.

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F-22 program shot down

Tuesday, August 4, 2009

Posted by John McHale

President Obama's first major defense budget cut got past a major hurdle last month when both houses of Congress agreed last week to cut F-22 funding from a new bill, despite speculation that they might fight to keep the program alive to save jobs.

Specifically the U.S. House of Representatives and U.S. Senate removed funding for additional F-22 jets in an appropriations bill with $636.3 billion for military spending for 2010. In other words the U.S. Department of Defense (DOD) will likely now stop F-22 procurement at 187 aircraft.

What does this mean for the industry? Too soon to tell. The F-22 prime contractor, Lockheed Martin, will most likely make major job cuts once it is official and this could lead to further job cuts at second and third their suppliers to the program.

But will it be the 90,000 plus layoffs that some in congress and at Lockheed have predicted? I don't think it will get that high.

The 2010 budget request -- which focuses on increased funding for special forces, unmanned systems, and the F-35 Joint Strike Fighter -- makes sense for today's world. I'd like to think these funding areas represent new opportunities for electronics designers and integrators and that the defense market will remain steady if not grow stronger, despite the end of F-22 production.

One thing that I do find ironic however is that while one major program was practically canceled this past month the DOD rolled out a number of new aircraft over the same time period -- a new Global Hawk, the P-8A Poseidon, the new Navy Stealth Fighter, and a second E-2D Advanced Hawkeye to name a few.

That's a lot of roll outs. Coincidence?


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Welcome to the lighter side of Military & Aerospace Electronics. This is where our staff recount tales of the strange, the weird, and the otherwise offbeat. We could put news here, but we have the rest of our Website for that. Enjoy our scribblings, and feel free to add your own opinions. You might also get to know us in the process. Proceed at your own risk.

John Keller for MAE
John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.

Courtney Howard for MAE Courtney E. Howard is senior editor of Military & Aerospace Electronics magazine. She is responsible for writing news stories and feature articles for the print publication, as well as composing daily news for the magazine's Website and assembling the weekly electronic newsletter. Her features have appeared in such high-tech trade publications as Military & Aerospace Electronics, Computer Graphics World, Electronic Publishing, Small Times, and The Audio Amateur.

John McHale for MAE John McHale is executive editor of Military & Aerospace Electronics magazine, where he has been covering the defense Industry for more than dozen years. During that time he also led PennWell's launches of magazines and shows on homeland security and a defense publication and website in Europe. Mr. McHale has served as chairman of the Military & Aerospace Electronics Forum and its Advisory Council since 2004. He lives in Boston with his golf clubs.