Strategic Partnerships in Positioning

Growing the 3D Machine Control Pie

RandyNoland.com

Companies form strategic partnerships and alliances for a wide variety of reasons.  These reasons are sometimes obvious, but not always. These alliances may signal a shift in product direction or continued commitment to markets served.

I chose this topic in light of recent press releases by Topcon Positioning Systems, John Deere, Leica GeoSystems, Hemisphere GPS and Carlson Software, Inc. These were all announced within the last month. Let’s take a look at what these new relationships might mean to our industry. This is an editorial steeped in both fact and opinion.

Deere 850K GPS Ready Dozer w/Topcon GPSLeica GeoSystems and Deere & Company
First, we received the press release from Leica on February 13th. The Leica agreement pertains to Deere's agricultural products, specifically their range of AutoTrac™ Ready tractors. Leica already supports many John Deere models and this agreement ensures that future equipment is supported.

"We are very pleased to gain a new range of John Deere models through this agreement," said Robert Kiernan, Business Development Manager for Agriculture at Leica Geosystems. “The agreement offers more farmers easy access to our precision guidance solutions in a new tractor generation.”

Deere offers their own GPS-based, precision farming solutions and has for over 15 years. NavCom, a leading pioneer in GPS technology, is a wholly owned subsidiary of John Deere. (1). While those products command the market’s lion share, Deere realizes the value in offering system choice to their customers. This philosophy from Deere’s Ag Division is consistent with that of their Construction & Forestry division as well, which is supported by the next press release.

Topcon Positioning Systems and Deere & Company’s Worldwide Construction & Forestry division
On February 28th, John Deere announced an alliance with Topcon. These two companies have worked together on some level for more than eight years. Back in 2005, Topcon exhibited an integrated grade control system on a Deere dozer at ConExpo. So no surprise that Deere and Topcon are deepening their commitment as the two have enjoyed a successful partnership.

What is interesting is that this agreement not only signals a continued commitment to provide access to technology that ensures system compatibility, but also now provides sales of Topcon systems from Deere dealers for new machines. That is a shift from the Topcon-only machine control distribution. This surely will broaden the visibility of 3D machine control and positioning technology.

Domenic Ruccolo, senior vice president of sales and marketing, John Deere Construction & Forestry, from the press release:

“The alliance with Topcon will allow our equipment owners to utilize a factory-installed grade control system that maximizes productivity, uptime and lowers daily operating costs on the worksite. John Deere’s approach to integrated grade control provides the customer with great flexibility. Topcon products will allow customers to experience faster delivery of their grade control-equipped machine, receive a factory-inspected system and benefit from an expanded level of customer support.”

Jamie Williamson, senior vice president and general manager of Topcon's Construction Business Unit, also from the press release:
“We are very pleased with this agreement which brings our leading grade control technology to John Deere Construction equipment on a broader scale. We believe this alliance will provide John Deere and Topcon customers the utmost quality in grade control technology and productivity on the job. John Deere and Topcon will work together to add value to integrated grade control systems through advanced, highly-integrated features in the future.”

Factory-installed options available for the Topcon system will include single or twin antenna versions, and six receiver options including multi-constellation GNSS support and communications protocols.

The alliance will first lead to the installation and distribution of Topcon components in John Deere products for the United States and Canada beginning this fall. Efforts will then shift around the world in key markets such as Latin America, Russia, China and Southeast Asia.

John Deere still maintains its open architecture approach, giving customers a choice. In addition to Topcon, machines will continue to work with any brand of grade control, including Trimble and Leica. I shot a video supporting the GPS Ready Deere 850K dozer back in August 2011. Click here to view.

I also found the following supporting information on John Deere’s website listed for several of their construction machines:

“Factory equipped with optional grade-control interface package, the 764 is ready for the integrated grade-control system of your choice.”
http://tinyurl.com/75x6z8m

"All John Deere G-Series Grade Pro units are grade-control ready. These machines can accept Trimble® or Topcon® grade control systems, whichever manufacturer the customer prefers. All automatic grade control buttons and controls are integrated into the control levers."
http://tinyurl.com/7j3gsm3

Drill Grade by Carlson SoftwareWhat does this mean to existing Topcon Machine Control and John Deere construction dealers?
Topcon has spent years building solid and talented machine control distribution; distribution with exclusive territories. The Deere agreement is bound to create a bit of paranoia amongst some of those dealers, right? Well not necessarily. The skill set required to sell, install and train 3D machine control, not to mention data preparation (3D model building) is highly specialized. It takes substantial time and dollar investment to build an effective sales and service channel. You just don’t replace that overnight. And who says anyone is trying to replace anything? Estimates vary, but about 8 out of 10 machines, whose applications could greatly benefit from machine control, have yet to adopt positioning technology. There is a huge potential for growth. We simply need more qualified boots on the ground to delivery sales and service to the expanding market. Machine control dealers are well aware of this fact and equipment manufacturers are coming on board. In fact, Topcon’s distribution has already built relationships with Deere’s construction equipment dealers..

 I spoke to Roger Croft of Lengeman Corp to get his perspective. Roger Croft, “I have been working with Deere equipment sales organizations in Florida for years. NorTrax, Flint, Highland Tractor, Beard Equipment to name a few. We have a great relationship and this alliance makes those relationships even closer. Not everyone has adopted 3D machine control technology. Working with Deere and Deere dealers grows the market and our share of that growing market.”

Editors Note: Back in October 2009, NorTrax had a grand opening in Ft Myers, FL. Lengeman Corp was there to assist. See our video coverage by clicking here

I also have to think that a Deere/Topcon alliance helps compete with an ever-growing Trimble/Sitech/Caterpillar sales channel. Of course Topcon, Trimble, Leica, Carlson and other machine control systems can easily retrofit any brand of heavy equipment whether Deere, Caterpillar or the many others such as Komatsu, Hitachi, Leiberr, Sany. And don’t forget the Asian equipment manufacturers who have come on very strong since 2007. Asian heavy equipment manufactures now hold 5 of the top 10 global producers. Click here for more info on World's Top 10 Heavy Equipment Manufacturers in 2011

I think it is clear that 3D machine control and positioning technology is here to stay. The benefits and increased value proposition are well documented. Clearly, Deere’s direction is strong validation for positioning technology. Their move offers an alternative choice to deal with current trends, i.e., CAT/Trimble. Deere’s philosophy has been and continues to be to not limit their offerings to one solution, offering clients the freedom to choose their machine control system, from the factory or retrofit.

Hemisphere GPS Implement Scraper Products with GPSHemisphere GPS & Carlson Software, Inc.
Let’s discuss another February 2012 press release. Hemisphere GPS and Carlson Software announced a strategic alliance on February 16th. This is a good time for an ethics statement. In addition to editor and cofounder of MachineControlOnline.com and Machine Control Magazine, I am also Vice President of Business Development/Director of Machine Control at Carlson Software. My goals and the goals of this media property are to report and discuss all things positioning fairly and openly. Small or large, new or experienced, we want all industry players to have a voice here. These efforts will inherently advance technology awareness thus increase adoption. Most readers are aware of my background but I felt it proper to disclose from time to time.

So, Hemisphere GPS and Carlson, what does this alliance entail? Hemisphere GPS designs and manufactures GNSS and complimentary products for positioning, guidance and machine control applications. These applications include marine, survey, agriculture and construction. Carlson Software develops software solutions for mining, civil-survey, GIS and various machine control markets. This partnership is complimentary as there is little overlap in competitive products. For example, Carlson’s SurvCE, SurvPC and Grade Supervisor applications support Hemisphere GPS’s line of GNSS receivers. These two companies represent substantial technology and their hardware/software expertise offers well-rounded synergy for integrated solutions. Per the press release on February 16th, Hemisphere GPS will be announcing product roadmaps later this year.

Summary
Technology companies are coming together creating new integrated systems adding value to niche and traditional machine control applications. Technology dealers and heavy equipment dealers are embracing the technology and each other. This trend will continue indicating the importance of the overall solution, which positively impacts sales for both. After all, positioning systems need machines and equipment manufacturers are seeing that these systems make their machines more productive. As the two continue to converge, adoption will increase. When that adoption begins to surpass 20-25%+, we will need all hands on deck to meet the demand and the demand for choice. I am excited to be a part of this rapidly growing industry and at the risk of sounding cliché; the surging tide will raise all the boats.

I welcome your perspective. Please email comments to editor [at] machinecontrolonline.com

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Additional Information
Leica Geosystems signs Software License Agreement with John Deere
http://machinecontrolonline.com/content/view/7871/2/

Hemisphere GPS and Carlson Software Establish Strategic Alliance
http://micro.newswire.ca/release.cgi?rkey=2002164747&view=29749-2&Start=&htm=0

John Deere Announces Alliance with Topcon
http://machinecontrolonline.com/content/view/7888/

1. “Nothing Runs Like a Precision Farming System”  - I found to be a good historical account of Deere’s entry into GPS Ag Management
http://www.progressiveengineer.com/pewebbackissues2005/peweb%2060%20mar05-2/Deere.htm


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