Should 3D Service Providers Worry About Falling Equipment Prices?

In one word and straightforward-YES. In two words: Yes but..

Fourteen years ago when we purchased our first 3D laser scanning system the CYRAX2400 and its processing software CGP we were sure we would have a maximum of 5 years until "every" surveyor would have one. We expected rapid equipment price reductions would make this technology affordable for most surveyors. We believed we would have only 5 years to get into the market and establish large gap of knowhow and experience before others would be right behind us.

We were wrong (very wrong) – it took 11 years before the Faro Focus 3d was introduced at a very low price and the race actually started. Now 3 years later we see 3 trends that will significantly affect all service providers/surveyors in this field, probably in the future:

a. Plants CAD manufacturers like Aveva, Intergraph, and Bentley have added point cloud processing tools (pipes 3D modeling mainly) to their packages. AEC CAD manufacturers like Autodesk and Bentley are trying as well, but with not a lot of success – yet. This effort will continue.

b. Significant drop in the price of scanners with increasing ease of use. This will also continue until "every" surveyor can afford it.

c. Significant improvement in point cloud processing tools moving toward partial/full automation.

These trends will make professional 3D capturing and processing much more common, simple and cheap. Hence, we’ll see more professionals (architects, engineers etc.) performing their own surveys. 3D scanning wont be exclusive anymore and "points selling" or basic modeling will become a cheap commodity. That means the service providers/surveyors that started 3D scanning a few years ago by offering "special tool" or special technique, but continue to provide regular deliverables and services as before, will soon find themselves in a very tough competition. As a matter of fact, this already started a few years ago and one can hire a scanning team, fully equipped with expensive scanners (Leica, Z+F, Riegl) for <$1200/day. If the service we provide is just scanning and transferring data for cheap modeling in India/China/Poland or elsewhere, then nobody will need us. We’ll bejust one more player in a large group of players.

So how shall we react? Some would say drop the price. Yes, price droppingis very tempting. People tend to do that as first-aid when facing competition. But, the nature of pricing is very snaky it goes one way only. It is a mental issue, a state of mind. Once you quote a cheaper price, you have fixed a new benchmark for your customer, but more dangerously you set up a new working point in your perception.The next time you’ll start from that point. Eventually you’ll hit the bottom in more ways than one.

Sure enough, there is another way (as always). We call it "Give and Grab". 3D capturing and especially 3D processing are not just another faster/better tool in the surveying toolbox, as most vendors want us to believe. It is a new and completely different philosophy of surveying or geometric documentation and analysis. Yes, that is what we do. It may turn the surveyor into a geometry expert. As soon as one understands that it opens new opportunities it breaks the glass ceiling of surveying. It enables positioning the surveyor in a completely different position, one where he can then extend and improve his role in the game.

Instead of providing data he may also become a problem solver, and people are willing to pay much more to solve their problems than for data that they can get from anyone. You can quote $1500 for a "scanning day" plus $700/day in the office, but you can also charge $8000 or even $14,000 for the same day, plus 3-4 office days if you just do it the right way- The Other Way. Whenever the tool and its price are the only factors making the difference, you’ll find others doing the same thing, sooner or later.

Lets take mobile scanning. Many can do that these days, no surprises, no inventions required. Therefore, it became a matter of price or faster driving mainly. People invest more money in equipment, but prices are continuously decreasing. Funny isn’t it?

Want an example? Please.

There are huge amounts of topographic jobs out there but there’s also huge competition in it, hence prices are finally set by customers either hourly/daily/per square meter, etc. Customers know all. But, developing a method and technique for scanning and analyzingthe normal vector of every heliostat out of 5000 in a solar energy field in order to calibrate their motion during Sun’s tracking, may bring you $12,000 on average per day as well as a very happy and grateful customer after solving his problem for 20% of the cost and 5% of the time. This is with the same equipment, same profession, same job duration, but 7 times more income. Develop it, show and prove it works, and you’ll find yourself riding alone for a period of time, if not for good. Now your customer will want to make you a "sole source". He will, believe me.

Want more? Here it is – there are plenty of plant/gas & oil/chemical industry scanning and regular pipes/structural modeling. Hence, customers ask you to quote the price per day or even price per scan!!! "Everybody" can do such a job so what else can you offer, but a "better" price? It is better for the customer, sure enough. But, if your customer is an electrical power station engineer or manager that faced a shock wave in one of the overheated steam pipes and now needs to rapidly analyze the pipe’s center line for spatial deformation and whether the 90 degree components are still at 90, he won’t ask you to quote by the hour or daily. He will happily pay $14,000 for 9 hours of scanning and will be grateful when you present the results after additional 20 hours. No doubt he’ll order YOU next time.

There are many such examples, but it is clear to me that regular jobs are also important in running a business. However, a proper combination of regular and special jobs is the answer for tough competition; a better combination will even make you smile.

So despite tough competition, despite new lower thresholds in getting into this field, experts with vision that are willing to search for new opportunities every day, and are willing to take risks in breaking the mold can make money in 3D service providing and have fun while doing so.

In 2001, after 12 months of a tough life with a newborn technology and a lot of work in trying to sell its advantages, we came across the most important insight for us – It is all about the application, if we’ll try to do the same as before, but with just another tool, we’ll vanish. We have to invent the market and highlight the needs. Since then, we continually invest great effort in searching for new problems to solve.

Dont make it cheaper, make it differently and improve your position in the project. Make yourself highly valuable to your customer! That’s the rule. The moment we stop the race, we are lost.

About the Author

Guest Contributors

Guest Contributors ... Articles from Experts in the LiDAR community
Contact Contributor Article List Below