Geo Week News

April 1, 2015

Keynote 1: Ralph Rio of the ARC Advisory Group


SPAR opened up with three keynotes that highlighted the dramatic changes we’re starting to see in the world as a result of 3D imaging technology. This week, I’ll feature Ralph Rio of the ARC Advisory Group, but be on the lookout next week for a recap of the keynotes by Dave Truch of BP and Andy Lowery from DAQRI–on the unprecedented kind of work being enabled by 3D technology.

Rio emphasized that the 3D scanning market is rapidly changing. Over the next 30 or so minutes, he updated a room of 3D insiders (including manufacturers and providers) on the major industry trends for business planning purposes, competitive intelligence, and strategic development.

Growth Trends
Many of those trends touched on the great deal of growth ARC is predicting for the industry in the future. They predict an 11.2% compounded annual growth rate continuing over the next few years.

While exploring the growth of the industry in global markets, Rio identified an unexpected driver of growth for the 3D industry. “Basically,” he said, “a fundamental driver is urbanization. The more urbanization you have, the more infrastructure you need–you need to design, build, and modify that infrastructure. Laser scanning becomes critical.”

(In the process of explaining how urbanization is a driver of growth, he justified the decision of many 3D-imaging firms to extend operations to China, which is seeing a period of intense urbanization.)

Which industries are seeing the most growth? Rio explained that the engineering, business services, and oil & gas sectors will see high growth rates, he said, while the government sector won’t be so fertile due to budget cuts. He also offered a breakdown of 3D usage in different industries.

Photo credit: Sam Billingsley, but I’m not sure whose heads those are.

Better ease of use is increasing sales, he said. Lower costs are increasing sales as well, and demand remains elastic. He warned, however, that price erosion will only continue driving growth until it doesn’t anymore–there’s no guarantee that demand will continue to respond to lower prices and make the shrinking profit margins worth it for suppliers.

For now, he said, price erosion is a growth driver, but it may tip the other way in the future.

As-Is, not As-Built
Perhaps the most timely part of Rio’s presentation was a discussion of regular updates to the point cloud, which he says helps plant design professionals to communicate with IT or management, who often have difficulty understanding the effects and benefits of a proposed change.

An emerging application area, Rio explained, is technology that facilitates and automates the process of keeping a point cloud current. It could provide a record of what has been done, but it has an even more surprising use within construction: “Some are also considering using the updated point cloud to determine progress payments.”

The main point, he said, is that the industry should recognize the growing popularity of these business practices and develop software to automate it.

Apps are the Future
Rio continued to stress the importance of software and closed by making a provocative point. He explained that, though hardware is growing, there’s a different way we should think about the development of 3D technology. Much like your smartphone, a 3D laser scanner can be seen as an “endpoint for the internet of things,” or a piece of hardware that runs apps and communicates with the cloud. This increases ease of use and allows for business process automation (a favorite point of Rio’s).

His most exciting prediction? Industry-specific scanners. To differentiate themselves in the future, he said, manufacturers will have to begin tailoring their scanners to specific verticals. Imagine, a scanner just for you.

For more on the future of scanning, stay tuned to SPAR this week and next for extended coverage of SPAR International.

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