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Adv Tca08 Bw Stuck090208

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Adv Tca08 Bw Stuck090208

  1. 1. The Value Chain in microTCA and ATCA Standards: Components vs Systems B.W.Stuck Executive Chairman CorEdge Group Santa Clara, CA USA October 2008 1
  2. 2. Outline What Is a Value Chain? Lessons learned from the Personal Computer (PC) i d t value chain industry l h i What is different in Embedded Computer systems value chain • ATCA value chain • microATCA value chain Summary Santa Clara, CA USA October 2008 2
  3. 3. What Is a Value Chain? Value chain captures what value is added at each stage in information systems, starting with components, and moving up to complete solutions Each t E h stage of the value chain can h f th l h i have • Different capabilities • Different b siness models business • Different cost structures Santa Clara, CA USA October 2008 3
  4. 4. Value Chain Graphic Components Boards Systems Solutions Santa Clara, CA USA October 2008 4
  5. 5. Underlying Economic Driver Product Features Pricing Rising Demands f D d for Manufacturing More Product, COGS New Products Applications Use Products Increae Demand Santa Clara, CA USA October 2008 5
  6. 6. Computer Industry Service Provider Applications System Software Hardware Santa Clara, CA USA October 2008 6
  7. 7. Computer Industry Evolution 1965-1980 1965 1980 1980-2008 1980 2008 Vendor proprietary PICMG industry standard hardware interfaces for hardware Vendor proprietary including integrated system software circuitry Vendor d third V d and thi d party t Microsoft, Microsoft UNIX software applications Third party applications Time sharing services Software As a Service Santa Clara, CA USA October 2008 7
  8. 8. Computer Industry Lessons Learned Shift from proprietary to open systems • Value shifted from system vendors to component vendors • Software enjoyed increasing gross margins • System vendors gross margins dropped to support this change in value chain economics • Total system prices dropped but volumes increased Economies of scale and scope • Standard bus led to manufacturing economics of scale • Growing volume/scale led to contract manufacturers rather than internal manufacturing groups Santa Clara, CA USA October 2008 8
  9. 9. Embedded Computer Industry Potential Trends Shift from proprietary to open systems • Value shifted from system vendors to component vendors • System vendors gross margins dropped to support this change in value chain economics • Total system prices drop while volumes increase Economies of scale and scope • Standard backplane led to manufacturing economics of scale • Growing volume led to contract manufacturers rather than internal manufacturers Santa Clara, CA USA October 2008 9
  10. 10. Lessons to Be Learned The Press Confuses Rhetoric with Product There is an S-Curve down the road for xTCA Potential over the next 3-5 years to see billions of dollars of xTCA standards compliant equipment sales Major players such as Ericsson and/or Huawei can accelerate market development Santa Clara, CA USA October 2008 10
  11. 11. Potential Lessons for ATCA ATCA encompasses • Carrier cards • Advanced Mezzanine Cards • System software • Chassis Proprietary blade vendors enjoy significant economies of scale and scope based on PC industry standards ATCA will be niche market, may disappear market Santa Clara, CA USA October 2008 11
  12. 12. Potential Lessons for microTCA microTCA encompasses • Advanced Mezzanine cards • System software • Backplane with chassis Potential for high volume Advanced Mezzanine Cards in new applications (telecom, defense, (telecom defense industrial) Potential for displacing ATCA applications with far more cost effective microTCA Santa Clara, CA USA October 2008 12
  13. 13. Biography of B.W.Stuck Chairman, CorEdge Group, 2004- Managing Director, Signal Lake, 1998- g g g Independent investor, 1993-1998 Independent consultant, 1984-1998 p , Bell Laboratories, 1972-1984 MIT, MIT SBEE and SMEE (1969), ScD (1972) (1969) http://signallake.com/ Santa Clara, CA USA October 2008 13
  14. 14. Additional Reading B.W.Stuck, M.Weingarten, Chipping Away at Value , g , pp g y Add, Business Communications Review, December 2001 B.W.Stuck, M.Weingarten, B W Stuck M Weingarten The Impact of ATCA on Telecom Economics, Business Communications Review, December 2005 B.W.Stuck, M.Weingarten, B W Stuck M Weingarten Micro (and Pico)TCA: Setting the Standard for Less Expensive Carrier Network Gear, Business Communication Review, October 2006 B.W.Stuck, M.Weingarten, There’s an S-Curve Down the Road for xTCA Market, Business Communication R i C i ti Review, NNovember 2007 b Santa Clara, CA USA October 2008 14

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