Silicon Dale

Where's the Killer Application ?

In the 1970s it was conventional wisdom that the future of mining was in ever larger open pits producing ever lower grade deposits, with commodity prices steadily increasing. This view should be seen against a background of oil-price crises.

In the 1970s, also, computing was an expensive activity which tended to be done by large companies. Large mining companies were interested in large projects, so naturally the focus of mining software which they developed or commissioned was on the evaluation of large ore bodies and the planning of large-scale open pit mines. This view of the industry permeated the early days of mining software companies such as Datamine, Gemcom, Mintec, Maptek, and Surpac, and it reached its zenith with the implementation of open pit optimisation algorithms such as Lerchs Grossmann by Whittle Programming and others.

However, it became apparent during the later 1980s that (a) there weren=t very many large mining companies, and (b) there weren=t very many large open pits to plan. Therefore the mining software companies switched their attention to modelling geometrically more complex ore bodies (using wireframe and so-called >solid= modelling methods) and designing underground mines. It became standard to provide a sales pack which included pretty coloured 3D views of complicated underground operations. How useful these design packages have been is very debatable - but it is clear that the glossy pictures helped to sell a lot of software.

Not enough, though. Soon it became obvious that there really were not going to be enough new mining projects in the 1990s to keep the mining software vendors in the manner to which they had become accustomed. Something else was needed. The simple and obvious answer was - short-term planning and production scheduling. During the life of a mine, it undergoes major long-term planning only once - or at most once every several years. Production planning is something that is needed on a regular basis. So the early and mid 1990s saw the release of whole new ranges of add-on software to fulfil these functions.

There is a phrase which came into common usage with the dot-com bubble - >business model=. This phrase became one of utmost importance to the mining software companies, because they were running out of new things to sell. The sale of software maintenance contracts to existing customers would keep the wolf from the door for a while. the sale of training courses would also help. Even high-priced consultancy services would help - a little. However, there was fierce competition in this area from the established consultancy firms, some of whom (such as Snowden Associates) were also beginning to offer their own software for sale.

Some of the vendors saw possibilities of a big new market in quarrying and industrial minerals - but failed to see that the low margins in these industries prevented significant profits from software sales even if they could put together suitable products (and most failed to do that). Some also saw big possibilities in exploiting mining markets in different regions of the world. In this, most came thoroughly unstuck. One BIG problem that has dogged mining software companies is that almost all were founded in English-speaking countries and grew by selling to English-speaking customers. In tackling other markets they suffered and continue to suffer from two major handicaps. Their management and staff, with few exceptions, lack the necessary language skills - and their software products are also anglo-centric. While this might be forgiven when selling into Hungary or Turkey, there is no excuse when selling into Russia, or China, or Germany, or French-speaking Africa, or Latin America. Sure, most of the mining software companies now have locally staffed offices in some of these markets, but their products and their key promotion literature and documentation are still mostly in English.

So there is a problem with the >business model= for many of the mining software companies. The responses to this problem have been varied. A couple have gone public (and promptly merged with each other). Another two have merged more recently. One self-destructed in the early 1990s - only to have its products live on under new ownership. One has taken its main business out of mining consultancy. One seems to see a future in selling third party software under a different brand image. None of them appear to have asked or answered the question - where is the mining industry going, and what sort of technical software will it need in the future ? The products on offer now would all have been recognisable 12 years ago. A little more polished maybe, ported to new operating systems. But no new business model, and not a sign of any new 'killer application'.

Now I am already writing this column for free, so I'm not about to give away valuable ideas for free to the software vendors (and especially not to the one that dispensed with my services some years ago). But there is a killer application - in fact there is a whole range of them - out there waiting to be exploited. It's a matter of working out what the mining industry is doing, and where it will set its priorities in the years ahead. In the words of IBM, 'Think!'

Stephen Henley
Matlock, England
steve@silicondale.co.uk
www.SiliconDale.com



Copyright © 2002 Stephen Henley
Where's the next killer application ? Earth Science Computer Applications, v.18,no.2,p.1?2