Getac Technology Corporation has produced ruggedised technology for the military for
over 20 years, but more recently it has been expanding into the wider enterprise market as the appetite for ruggedised devices grows to keep pace with increased workforce mobility.
The company generally views the market according to size of form factor, according to Peter Molyneux, president of Getac UK. ‘We look at the market in terms of two form factors: large – notebooks; and small – handheld devices.’
As a market in relation to the overall IT sector the ruggedised market is quite small, but Molyneux describes customers who buy the technology as being at the ‘serious’ end. The technology is often vital to their businesses – it must be reliable and properly supported by its manufacturer for a longer life cycle than mass market consumer devices. Buyers are demanding and well informed about what they want.
However, he adds that it is difficult to get accurate figures on the value of market. ‘If you add up the UK, Germany, France, Benelux and Italy, then the market is worth around US$550m all told,’ says Molyneux.
In Europe, the biggest region is Germany, where the sector focus for ruggedised products is big industrial and automotive. The UK is stronger in military and utilities – the latter quite a mature market now post-privatisation. The large format sector is thought to be worth around £160m-£180m across all sectors in the UK.
Globally, the large format device sector is dominated by Japan’s Panasonic, whose Toughbook range forged the ruggedised laptop/notebook market. It has traditionally held a 60% share of the market, but this lead has been eroded over the last two years to around 50%.
The small format ruggedised PDA market is dominated by the US’s Motorola Solutions, which has around a 65% share. Its acquisition of Psion in 2012 will boost that further. Honeywell, which was No.4 or 5 in the market, according to Molyneux, recently bought Intermec, which has propelled it up to second for market share in the handheld market.
‘We are up against very dominant market leaders in both sectors,’ points out Molyneux. Despite that, Getac has carved a 15% market share in the UK since it established itself four years ago.
‘We peaked at about 30% market share in one quarter due to a large one-off project,’ says Molyneux. The deal was the James Project, a UK military project that transformed the business very quickly. ‘It involved delivering 12,500 pieces over three years, so that really helped us build the business and have reference in the market place.’
Getac’s key markets are military, public safety, utility, oil & gas, automotive, field service, health, transportation, manufacturing and mobile workforces. ‘You have the “within four walls” or warehousing market and the “in the field” market,’ says Molyneux.
Market research analysts have said that all rugged products are showing consistent growth, with rugged tablets growing at a compound annual growth rate of 7%-9%; notebooks at 5%; and small form factor products at 9%.
‘That’s what market research tells us, but it is difficult to agree with that because we see the landscape changing,’ argues Molyneux.
The two principal reasons for the change are the arrival of properly ruggedised tablets towards the end of 2012 and the widening choice of operating systems.
‘This is the opportunity for us,’ says Molyneux. ‘The typical lifecycle for a ruggedised product is now five years – it used to be three. So now within the third year of deployment customers will start to look into the market to see what is available in terms of new technology and operating systems to replace their existing stock. But for a big player it can take from one to two years from initial scoping to actually deploying the product physically.’
He points out that a lot of companies looking to refresh next year are now considering a tablet option. They are also weighing up the merits of the operating systems now available, be it Windows Mobile, XP or WIN 7, but Android and Apple are also making a play.
Organisations such as the military, public safety or utilities with mission critical businesses tend to be conservative in their purchasing. They cannot afford for the products they use to go wrong, so they buy tried and tested devices and operating systems.
‘That’s why I don’t think the B2B world will go for Windows 8,’ suggests Molyneux. ‘B2B customers don’t like leaping onto new technologies. If you are delivering gas supplies you must ensure your product works, so they will go with a supplier or solution that they have confidence in.
‘This makes it hard for new players to enter the ruggedised market,’ continues Molyneux. ‘It is not impossible and new entrants will win some business, but customers want to deal with a sustainable business that is going to be around for a long time and which they can trust to deliver the on-going support they need,’ he says.
A good reputation is vital, but it takes time to establish and word gets around fast if there are problems. New Chinese manufacturers may be competitive on price, but as Molyneux says: ‘This market is far from being just about price – you have to prove yourselves and that takes a number of years.’
Year of the tablet
Analysts pronounced 2012 as the year of the ruggedised tablet, but Molyneux says there were no real fully ruggedised products and only a few applications available. ‘It is an expensive market to develop products in, so some manufacturers, even some major suppliers, went to the ODM market and badged up existing tablets with a pseudo-ruggedised spec to enable a faster route to market,’ he says.
But some quality ruggedised tablets are appearing and this will change the market, Molyneux believes, as tablets will present new opportunities to customers, suppliers and software developers. Whether tablets will replace notebooks and some handhelds remains to be seen.
One other change to affect the ruggedised market is Cloud computing. Customers will always look at features such as weight, speed and cost, but Molyneux wonders whether customers will carry heavy notebooks with top processing power if instead the company does its business in the Cloud and a tablet might suffice.
Molyneux believes Getac can meet these changing business needs as it now has the widest range of standard products on the market, certainly in the large and tablet format. It plans to release two new tablets in 2013.
Getac is in control of the design and manufacture of its products. It designs and manufactures die cast magnesium alloys and plastic modules, providing its own mechanical ruggedised enclosures. This gives Getac a big advantage argues Molyneux, not just in quality control, but because it allows it to develop bespoke products.
‘We differentiate ourselves by adding value,’ says Molyneux. ‘Our goal is to fully integrate our products into the customer’s IT systems and deliver products that exceed their needs. Often the challenge is more about getting the customer to understand the products and what they can do.
‘Repeat business is what it is all about and through that relationship with the customer we learn what they want to do next and that helps us develop products in terms of price and format. OEM and ODM products are developed for a volume market, but the ruggedised market is about providing the right product details for each sector. Our goal is to give the customer the right solution,’ concludes Molyneux.