It’s Not Just a Cliché—History Does Repeat Itself
I started my career in a company that built technology enabling the Internet. This was right about the time that businesses were connecting, and hundreds of small ISPs were emerging to give regular people access to the World Wide Web. I was truly fortunate to be involved in the telecom industry as it rapidly transformed from an analog, voice-centric industry to a digital, packet-centric industry.
We watched startups pop up and be acquired overnight. We watched connectivity speeds go from 56 Kbps to 1.544 Mbps through to 10 Gbit optical. Companies were scrambling to get the latest technology out on the street, and cost was of little concern.
And then it all crashed.
There was a lot to learn from the "dot bomb" crash. Thousands of once highly sought-after employees were laid off, companies imploded spectacularly and those that survived were shrinking, re-tooling and re-thinking their strategy.
The large telecom companies could no longer afford an army of engineers, so they stopped trying to do everything and focused on core competencies. Some focused on services, some on software. Some never really found their way and are no longer with us. The whole supply chain was disrupted, needing to adapt to the new reality.
And this was all happening while consumer demand for connectivity and services were about to explode. A new era of mobile connectivity began to emerge and the business opportunity was tremendous.
I see great parallels in the military and aerospace electronics industry. Military forces around the world are transforming into smaller, nimbler, more connected units where perhaps information is the greatest weapon. Old proprietary communications links are rapidly being replaced by an Internet-like infrastructure.
Attend a military seminar and you will hear about some of the latest technologies in cloud computing, software defined networking and cyber security. The military demands this technology more than ever before and wants to deploy it faster than ever before — and yet military funding around the world is facing a rapid decline.
And so we are watching a very large industry—one that has been flush with government funding and tends to resist change—rethink how it does business. The military still demands special handling, somewhat specialized equipment and long lifecycle support, but now cost and price are higher up in the priority list.
The electronics supply chain is just starting to go through a major disruption and, just like the telecom industry, it needs to re-tool in order to position itself for future opportunity. As always, opportunity will rise from this disruption—but those in the defense industry will need to change in order to benefit.