2014 Global PXI Instrumentation Growth Excellence Leadership Award – Article Reprint

Article Reprints

Keysight Technologies

2014 Global PXI Instrumentation

Growth Excellence Leadership Award

Article Reprint

Agilent Technologies

2014 Global PXI Instrumentation

Growth Excellence Leadership Award

Background and Company Performance

Industry Challenges

Introduced in 1998, PCI eXtensions for Instrumentation (PXI) is an open modular standard that imparts significant benefits to customers in the automated test and measurement market. The platform’s measurement speed, small footprint, and low power consumption translates into the lower cost of test customers are looking to achieve in manufacturing applications. Meanwhile, its measurement speed and flexibility also makes it extremely attractive in the design validation and research and development environments, enabling customers to shorten their time to market and/or address the increasingly multichannel nature of the devices they are developing. As a result, the platform has witnessed significant success over the past 15 years, growing steadily at double-digit growth rates, due to customers gradually shifting from rack-and-stack test systems made up of traditional box instruments to PXI-based test systems.

While lowering the cost of test and reducing time to market is critical for customers of test and measurement equipment in automated test applications, vendors of PXI instrumentation first had to increase the capabilities and performance of PXI solutions to bring them on par or exceed that of traditional instruments. This challenge was overcome, with vendors even able to introduce products many thought would never be possible in the PXI form factor such as RF products. Adoption of PXI instrumentation has increased correspondingly to vendor product introductions however has been somewhat restrained by the conservativeness of test engineers that have used traditional box instruments effectively for decades and the more complex process associated with integrating a PXI test system in comparison to a rack-and-stack test system. Industries characterized by a rapid evolution of technologies, such as wireless communications, are especially challenged by this aspect of modular instrumentation. To boost the market growth and that of its revenue performance in this space, PXI vendors have to implement various strategies including partnerships.

Competing effectively in the PXI instrumentation market is also a key challenge for participants, especially tier-2 competitors and new entrants, due to the dominance of the company who pioneered the PXI standard, which benefits from an extensive product portfolio, and the presence of other established vendors, coupled with their dedication to this market. The growth of the PXI instrumentation market is also attractive to various companies who are making significant investments to capture the numerous opportunities emerging in that market. While participants face the challenge of picking the opportunities that offer the highest revenue potential among the large number of opportunities emerging in the space constantly, they also face the competition of technologically-superior companies who are pursuing these high-potential growth opportunities.

Companies able to devise innovative strategies that take into consideration the challenges faced by customers and compare them to the strategies and strengths of established competitors to identify the opportunities they can best address based on their core competencies could grow their share significantly in this sought-after marketplace.

Customer Value Excellence and Growth Success

Growth Strategy Excellence

Prior to 2010, Agilent Technologies was considered a small participant in the PXI instrumentation market, holding less than 5% of the market revenues. To improve its position against much larger competitors, the company put forth significant efforts toward understanding the key reasons driving the shift from traditional box instrumentation to modular instrumentation in the automated test market as well as the customer pain points around modular instrumentation. Agilent also spent time reviewing the strengths and weaknesses of its top competitors. As a result of this analysis, the company’s early entry into the PXI space involved a two-pronged strategy that consisted of focusing its efforts on a specific segment of the market rather than trying to build a large product portfolio, and offering more of a solution to customers rather than just components.

The company realized quickly that its competitors had developed a significant product line addressing a wide range of requirements in the industry that could not be matched in a short period of time. However, its competitors were early participants in the radio frequency (RF)/ microwave (MW) market in which Agilent had tremendous expertise from decades of experience as a leader with traditional box instruments. This space presented Agilent the best opportunity for market penetration. The first part of its growth strategy in the PXI instrumentation market focused on using its core competencies in the RF, MW and high-speed digital space. The company introduced a number of products targeting this space in late 2009 and 2010, when it decided to more actively pursue the PXI instrumentation market. The number of Agilent modular products has doubled since 2009, reaching over 100, with a significant number of them being PXI products. While the company initially used partners to help it enter the market by introducing a large number of products at once, Agilent has now shifted to more organic means to further develop its PXI product portfolio. To this end, the company has been investing a higher proportion of its R&D investments in modular solutions. It now has an entire division focused on modular products and uses the expertise of its traditional box divisions in signal analyzers, network analyzers and other such instruments to develop its PXI offering. The designs of its PXI vector signal analyzers (VSA) and vector signal generators (VSG), for example, are based on the designs of its box instruments, enabling the company to go to market quickly with products of high quality. Agilent leverages its application software across product lines (box, modular, handhelds) to achieve faster time to market for its products, providing customers with measurement science consistency between Agilent’s box offering and its modular solutions. The company is able to deliver the same measurement results across these different form factors, as well as across the product development lifecycle. As the only company with a significant play in box instrumentation, and now modular instrumentation, Agilent benefits from a key competitive advantage over other participants in the automated test market.

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