Can Small Vendors Play Big?

By Dan Hebert, PE, Senior Technical Editor

It’s the age-old question: Stick with the big-name automation supplier or switch to a smaller vendor promising more performance for less money?

Blindly sticking with the big guys can seem safe in the short term, but could turn out to be risky in the long term if the big vendor doesn’t change with the market. Specifiers who bet on OS/2 because it was an IBM product made a big mistake by ignoring the Windows solution from Microsoft, which was a relatively small vendor at the time.

However, switching to a smaller, more innovative, newer supplier often seems to save money in the short run, but risks can increase if the vendor isn’t properly vetted. Buying cheap plane tickets from a small airline for travel nine months from now can save big bucks, but only if the airline is still in business when your travel day arrives.

There are good and bad reasons to buy from both small and large vendors. The trick is to know when and where to go small. Your customers sometimes have some say in this, but in the end it’s your machine and your decision.

For the purposes of this article, we define big vendors as those with annual automation revenue of more than $1 billion. Rockwell Automation and Siemens immediately come to mind. Smaller vendors have annual revenue of less than $1 billion and, for the most part much, much less.

When Small Makes Sense

Bigger vendors are preferred by many; that’s why they’re big. So why do some machine builders and system integrators prefer smaller firms? “Most of our performance requirements are best met by smaller vendors that target our industry,” says Brad Froemke, mechanical engineer at Cascade Microtech in Beaverton, Ore.

Cascade makes probes and probing systems for the semiconductor industry. Its systems have many specialized requirements that often are not well addressed by larger vendors.

“We use components from smaller vendors for motion control, I/O and vision,” adds Froemke. “We’ve found smaller vendors to be more responsive to our needs since we represent a larger portion of their sales. Having us as a customer is a feather in the cap. We represent more than half of the worldwide sales in our niche and are performance leaders.”

Like Cascade, Speedline Technologies is a machine builder with high performance requirements. Speedline makes very accurate, high-throughput machines with many axes of motion for surface-mount PCB assembly.

“The only components from big-name vendors that we use are common electrical control items such as circuit breakers, contactors and stepper and servo axis motors,” relates John Klauser, principal electrical engineer at Speedline Technologies in Franklin, Mass. “We use components from small vendors because they best meet our needs, not simply because they are less expensive.”

A food-processing machine builder favors smaller vendors, too. “We don’t have any performance requirements that prevent us from using more cost-effective solutions from smaller companies,” explains Tom Wolcott, electrical engineering manager at Formax in Mokena, Ill. Formax makes industrial high-speed forming and slicing food processing equipment. “We prefer PC-based automation over PLCs mainly for cost, flexibility and control. We find that smaller suppliers will work with us on our custom PC systems. We use Windows CE for our operating system, which is not well-supported by many of the larger industrial suppliers.” More than just about any other machine automation component, PC-based controls adhere to open system standards, and this gives smaller suppliers a leg up in this area.

Smaller Vendors Can Be Specialists

Many machine builders prefer small suppliers, and some of the system integrators that serve the machine automation market feel the same way.

Big vendors tend to make high volumes of relatively standard products that work well with most applications. However, machine builders with unusual needs can find that smaller suppliers are more responsive. “Special requirements often drive the OEM away from large suppliers to specialty niche players that are flexible enough to accommodate unique needs,” observes Bob Zeigenfuse, president of system integrator Avanceon in Exton, Pa.

Big vendors have many built-in advantages over smaller suppliers in terms of market share, customer preference and installed base. The only way for a small supplier to overcome these advantages is to offer markedly superior products and services.

Manit Systems in Tustin, Calif., designs, develops and supports control systems for a variety of customers in different industries. They often favor smaller suppliers for cost/performance reasons. “Hardware from the largest automation suppliers often is less capable and up to four times the cost of more advanced solutions from smaller and mid-sized automation suppliers,” says John DeVries, president of Manit.

Just as important, and maybe more so, is the ease of integrating third-party devices and implementing standard communication protocols with components from smaller vendors. “It seems that smaller vendors often pioneer and promote connectivity standards, as opposed to the larger vendors, who seem to merely tolerate them,” adds DeVries.