Over much of my career I’ve been closely connected to the industry segment known as the mid- to high-end embedded computing market. Over more than 20 years, that industry segment has held an annual event—though its name has changed and changed again. A highlight of these events were market forecast presentations from three different analysts. As you would expect, these analysts presented slides of market trends and forecasts.
I’ll never forget an amusing moment at one of these events—this one in the early 2000s if I recall. The three market analysts that year included two from small market research companies and one from an experienced editor, Warren, who also did his own market research. I knew him well, as did everyone in that industry. At that point, I was over 10 years into my career and I knew who was who. When he completed his presentation, a fellow, more junior, industry editor that I was sitting next to turned to me and remarked “His numbers don’t add up.” I chuckled and replied “Yeah, but his conclusions are always right.” She looked at me like I was crazy. I promised her I’d explain what I meant later.
Later on, during a break in the presentations I explained myself. Because this was not a new question—the same three analysts had been presenting several years in a row—I knew the background of what was going on. Mind you, at that time, the embedded board-level computing industry wasn’t a subject that any of the large market research firms covered. These were all fairly small organizations. What I explained to her was that the other two market analysts gathered their research by mailing out surveys with questions to a set of embedded board customers. They would then take the responses, tabulate the data and make market trend and forecast graphs from them.
In contrast, my friend Warren took a different approach. He would gather his information from conversations with company presidents and senior marketing execs from many of the companies in the embedded board-level computing industry. This was something you could feasibly do in a small industry where everyone knows everyone. To be clear, you couldn’t do that kind of analysis in a vast industry like the microcontroller market, for example. In his questions, he would delve into what these companies where thinking in terms of their next several months of product development.
Right or wrong, if a company is putting its resources toward, let’s say building more COM Express boards and fewer CompactPCI boards, that decision isn’t one made lightly. And, there’s more at stake in such a decision than for a user answering an anonymous survey from a market analyst. If you think about it, he was not only gaining the insights of those high-level decision makers, but also, indirectly, he was getting an understanding what the customers of those decision makers were thinking.
From the information gathered from those executives, Warren could put together a fairly accurate forecast of where the industry was heading. Sure, his graphs were perhaps not as slick and carefully enumerated as the other analysts. But his conclusions had a history of being accurate. When I explained this to my junior colleague, she understood what I saying. It’s possible she passed the insight on some years later. Perhaps not though, because it became a much different industry not long after. It went from a collection of $10- to $30-million companies, to a smaller group of $100- million $200-million companies—each built from acquisitions of those smaller companies.
Things change, and change is the only constant. But the lesson I learned from this story is that, at the heart of everything, the technology industry is a people business—and there’s always much to be gained from keeping the conversation going.
PUBLISHED IN CIRCUIT CELLAR MAGAZINE• JANAURY 2021 #366- Get a PDF of the issue