‘What I want to do is manage Tait in a way that makes it more relevant to our key market verticals, because as we move into the digital world each market will fracture off into where digital applications take them,’ says Garry Diack, CEO of Tait Communications.
Diack’s view highlights a major change coming to the professional mobile radio (PMR) world. The traditional analogue land mobile radio (LMR) sale provided users with a certain scope and capability that could be replicated across most verticals anywhere in the world.
However, the advent of digital IP technology is changing this. The demand for software applications and services will fracture that traditional PMR sell along market vertical lines, necessitating a different response to each from vendors.
‘Take mining, oil and gas,’ says Diack. ‘In mining the opportunity is about how digital communications interoperate with the mine operating systems to improve health and safety and run an efficient mine. The value proposition is not about PTP voice communications, but about using data to promote safety.’
Public safety is the vertical most cited to lead the predicted switch from PMR narrowband technology to LTE broadband solutions. In New Zealand, Diack says police are putting more intelligence into shoulder microphones, which can link to biometric sensors with the data interfacing through the PMR radio into the cellular/Wi-Fi space to smartphones or tablets.
‘As public safety organisations move into this world, the space for us will be the connectivity between the PMR radio and the cellular device and the use of data between the two. The value proposition for the police is that it allows officers to keep eyes upon the risk and their hands free,’ says Diack.
But he is confident that LTE broadband is not going to put PMR vendors out of business. ‘I am not at all concerned or deterred for the future of the PMR industry in the light of LTE and where the multiple networks are going to take critical communications. There will always be a space for pure radio right at the end of the continuum of need – even if it is solely for redundancy when the cellphone networks go down in a major incident.’
But this does mean PMR vendors need to change the way they approach the market. ‘The big challenge for us is to stop thinking like radio engineers and instead think about what apps we can lay over the radio network that provide a good interface with the emerging radio standards coming through,’ says Diack.
‘The business model for that means you have to have a lot of investment in repositioning yourself and getting the capital aligned for that,’ he acknowledges. ‘That said, there are still a lot of traditional analogue and digital PMR-based critical and non-critical communication network users that will be put off by the cost of moving to LTE. They will continue to reinvest in their networks, so there is still plenty of opportunity in PMR,’ says Diack firmly.
How is Tait shaping itself to meet this challenge? ‘We are small compared with the likes of Motorola Solutions,’ admits Diack, ‘so we have to be choosy in how we invest in our key market verticals of public safety, utilities, transport, mining, and oil and gas.
‘We need to indentify where the big changes are going to take place. For example, utilities are confronting massive issues in terms of capital replacement cost and big population growth, while terrorist threats are a constant challenge.
‘Utilities have to continually balance capital investment and operational upgrades, so they ensure quality, but not spend so little that they run down the network. That space provides a real opportunity for DMR Tier 3 trunking and radio-based digital monitoring around the network using our GridLink product. It is a massive opportunity and a really good place for us to be.’
Tait is working hard to establish partnerships as some new products are likely to come through joint development mode, particularly the apps required to meet the needs of different market verticals.
Naturally, this kind of development tends to be concentrated on Tait’s larger customers, but Diack insists that smaller customers must not be forgotten. ‘They want a commitment from us and we think that’s right – and there are good margins in it too, so we need to fund our future development around that.’
However, he concedes that Tait has turned its back a little too much on the indirect channel around the globe recently. The company is therefore running a separate strategy to rejuvenate its ability to service that smaller user market via its legacy channel dealers, resellers and distributors.
‘In some markets that is not something we’d put a lot of investment into as they are dominated by large players, but in the UK and EMEA we see there is a real opportunity for us. We are very keen to get that market positioning stronger,’ says Diack.
The idea is that smaller end users leverage the value of the investment Tait makes in developing solutions for its larger customers. For example, Tait’s DMR Express solution harnesses its DMR Tier 3 technology to allow users to scale their network up from one to six sites with a total of up to 24 RF channels, while DMR Access provides a single site trunked solution with up to four RF channels.
Diack says: ‘We are trying to build a business that has a very strong and committed dealer and reseller base, so we can pursue long-term positioning in our market verticals. This era is dominated by channel sales, but in five years’ time a higher proportion will be from direct sales.
‘That is not because we want to move away from the channel business,’ he reassures, ‘far from it; we want that channel business to grow and we will support it. But overall we think real volume of growth will come from direct sales of large scale solutions.’
Diack sees Tait’s role as evolving from being just an OEM to becoming a strategy advisor to customers wanting guidance about how and when to invest in this changing critical communications environment. The mobile carriers’ view is that 4G will supercede radio, but Diack believes PMR will still play a major part for at least another 10 years. Why?
‘Because the carrier commercial model is based on consumer income and they cannot afford to build out their networks in areas of low population. But critical communications users need to operate in those areas, so it will be years before the carrier economic model meets mission critical coverage requirements,’ says Diack. And that leaves out capacity, resilience, redundancy and a host of control issues.
Lack of available 4G spectrum for private 4G networks will also be a major restriction in many parts of the world and if customers either cannot or would rather not use commercial mobile networks, that leaves PMR or a hybrid of the two, as the only available solution that meets their critical communication needs – this will require partnerships.
‘Any thought that a business like ours has a standalone future without clearly thinking about the kinds of partners we need to drive a full solution for a customer is not feasible. We’ve got to be in that space providing a fully integrated, cost effective communications system with voice, data, network efficiency and health and safety information,’ argues Diack.
Tait has established relationships with carriers such as Telstra in Australia and has a range of partners to help it provide a fuller solution. These include: Avtec, Cisco, Omnitronics and Zetron for dispatch console systems; Clevest, Omnitronics and Tallysman Wireless for location solutions; Mobile Mentor for mobility solutions; Eventide and Exacom for recording solutions; and Cisco for unified mission critical communications solutions.
‘Where we sit and how we work with these other types of networks and how they develop through the LTE network back into our network for data and voice – that is our future. But there is no future that I can see that does not have PMR in it,’ asserts Diack.
As evidence for this Diack cites a recent conversation he had with a regional chief executive of a large carrier. ‘He told me there are tenders out there and we can’t get anywhere near them as the customers tell us we don’t understand critical communications – you’ve got to
help us out.
‘Two years ago it was: we are the prime contractor, just sort a few numbers for us and we’ll kick you off in a year,’ reports Diack. ‘Now they realise they do not have the necessary insight into key areas such as latency, redundancy and the full integrated value proposition. Our knowledge of what happens at the coalface for organisations like the police is critical.’
Turning to the UK, Tait’s decision to shut its Cambridge office, disperse its engineering expertise and transfer its support team to become part of Magdalene’s managed services operation in 2014 probably sent the wrong message to the UK market.
Diack says: ‘One of the reasons for me being here in the UK is to spread the word to our channel partners that we are here and we have not left! There are compelling reasons for us to strengthen our position here substantially. That large network of UK dealers is a fundamental platform upon which we have to grow our segment-based business.
‘We have not done a good job on that recently,’ admits Diack, ‘so we are fundamentally changing the strategy. This is a period where the whole industry needs to come together to understand what its future looks like and we’ve found we have too much of a fragmented interface with the dealer channel right now and that is what we are seeking to change.’
Concluding, he says: ‘We think PMR has at least 10 more years of growth. What we need to do is work with 4G and Wi-Fi solutions to integrate good communications into the market verticals that are important to us.’