I had to dig deeper on that encoder. Let me revise my earlier comment. Based on this data sheet from Mitutoyo (
https://www.mitutoyo.com/wp-content/uploads/2012/11/E4189-539_579NC_Scale.pdf), the encoder outputs EIA RS-422A which is compatible with FANUC controls using quadrature counting with serial backup and absolute positioning.
It seems you can use pins 1-7 on the connector to read the scale as a traditional differential quadrature encoder (compatible with ESS), however you will
not be able to interface with the serial connections without some special effort and custom interfaces. Without the serial data, this encoder is no longer absolute, but remains fully functional as incremental.
The FANUC control that this encoder is designed for would read the serial data at startup to get the absolute position of the scale, and then use the quadrature signals afterwards to count pulses. Every so often it will query the serial channel to make sure that the position that it has counted to matches what the encoder thinks is right. Any error here would trigger an alarm.
I would still think that a more traditional encoder such as the Mitutoyo AT202 (identical in size to your selected AT332) or the AT211 (smaller in cross section and available in higher resolution) would be the best choice since you won't be able to use the serial channels of the AT332 anyways. I bet they are less expensive too.
You will need a differential to single ended receiver, but I would check to make sure the CNC4PC is going to be fast enough for your application (email them since it is not published). The resolution x travel speed of your scale will set the output frequency. This must be lower than the capacity of the chip they use on their converter.
With the information posted above, you will
not require any boards from pico-systems as all the encoders we are looking at output quadrature signals. Those boards would be used if conversion from another type of feedback was required.
Lets make sure we are on the same page before you go buy stuff. I don't want to mislead you here.
Mike