Industrial Networking: The Bridge to Competitive Industrial Operations

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During this webcast, VDC Senior Analyst Tim Shea discusses how the demand for visibility and the influence of IT is shaping a healthy but fragmented industrial networking market.

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  • K will come up with a sexier title than this
  • VDC Research Group (VDC) provides exceptionally detailed direct-contact primary market research and consulting services to many of the world's largest technology suppliers, innovative start-ups and leading investors.
  • VDC Research Group (VDC) provides exceptionally detailed direct-contact primary market research and consulting services to many of the world's largest technology suppliers, innovative start-ups and leading investors.
  • VDC Research Group (VDC) provides exceptionally detailed direct-contact primary market research and consulting services to many of the world's largest technology suppliers, innovative start-ups and leading investors.
  • The firm is organized around six practices, each with its own focused area of coverage, but all committed to the firm’s core philosophy.
  • This philosophy is applied in our syndicated research and in the wide variety of other services we provide to meet our clients specific tactical and strategic decision support needs. All of our services are built on a foundation of highly skilled professionals applying robust methodologies to VDC’s large and continuously refreshed datasets.
  • K wants to make some changes to bio
  • Global market competitiveness is impacting all industries, forcing companies to invest in factory automation technologies that drive productivity, improve flexibility and operational agility and provide greater visibility into operational issues – ROI is king.New factory automation initiatives and/or expanded initiatives are providing greater data communications among disparate, and previously siloed, plant operations. These automation initiatives generate data communication requirements which rely on disparate connections within control hierarchy being provided for via networking solutions. Growth in wireless infrastructure product demand will be quite robust as technological developments and standards initiatives are overcoming users concerns, both real and perceivedHowever wireline networking solutions will continue to comprise the bulk of the networking market for the foreseeable future, as users rely on this proven technology which is seen as being more reliable, faster and more familiar.The need to drive down costs, improve productivity and enable for corporate wide connectivity is key factors behind increasing influence of the Enterprise IT world on the historically “isolated conclave” on the factory floor
  • Slide is combined perspective of data from users of both wireless and wireline networking solutions. Note in some cases material differences exist in application usage, particularly among wireless respondents. As companies take advantage of the global economic recovery to make investments in factory automation initiatives (new or shelved ones) to gain a competitive edge against the competition, they are looking to improve the ROI on those investments by expanding the number of applications which are being served by industrial networking solutions The largest applications being served, in most cases, are typically the most data intensive applications which are being served by managed switches to handle complexity. Wireline solutions serve a greater share of the overall industrial automation segment as they represent a tried and true solution.Data acquisition involves taking data at the “tip of spear” device level and communicating across and up the control hierarchy so as to generate actionable information and better operational controlMonitoring of processes and/or assets involves continuous (or periodic) readouts of data to insure operational control, maintain product quality and drive maximum productivityAs user confidence increases and wireless technology developments continued to improve, usage of wireless solutions to serve more critical applications such as motion control, logic control and certain process controls will increase over time. Usage of wireless in majority of control applications is expected to low relative to that of wirline networks.
  • Note this slide only provides a viewpoint into only half of the potential connections in which wireline and wireless network s are being leveraged for data communications, these represent those connections in which respondent indicated the greatest growth.Factory automation initiatives are designed to enable companies to take data from all levels of the control hierarchy on the factory floor and communicate that data across, above and below via various connections in the automation network and to and from the enterprise network.Despite the diversity of connections being employed to communicate data transfer to and from the enterprise and plant floor operations, the greatest growth coming from connections to and from SCADA and distribution/remote I/O .As SCADA applications are being disaggregated and data is increasingly pushed down into the network as the adoption of Ethernet based networks grows, the reliance on I/O communications plugged directly into Ethernet will grow as well. Vendors such as Rockwell Automation are designing solutions which will allow for “one network under God” and reduce the need for deploying both a higher level and lower “fieldbus” network solutions.In most instances the level of data and means of connection in communicating that data varies somewhat for wireline and wireless infrastructure networks. As wirelline solutions are more mature and prevalent , a greater share of respondents are communicating more data in support of more applications that those of wirelessFor example the share of respondents transferring data between the enterprise and controllers and the enterprise and devices by wireless networks is materially smaller than that of wireline networks today. However some of the greatest growth in data transferred by wireless is expected to come from these same connections.
  • As a result of pent up demand in serving factory automation projects previously cancelled or postponed as a result of the global recession, users are indicating a robust rebound in investments across most wireline networking productsAlmost de facto acceptance of Ethernet based networks, the awareness of the many benefits derived from networking factory/plant operations and technological improvements in the networking products leveraging these networks are all forces driving continued demand for and reliance on wireline solutions for the majority of applicationsVDC believes the forecast for overall dollar volume shipments for the wireline products under study will be somewhat tempered as this expression of pent up demand is likely unsustainable over the forecast period through 2015Continued maturation of the customer base and a growing awareness of and acceptance for wireless networking solutions is creating a perfect storm in which demand for wireless network usage in an expanding base of applications, including less critical control applications, is creating an almost tsunami wave type level of demand which can finally be seen as “real” and should live up to the decades old promises and expectationsWireless adoption is expected to grow rapidly beyond applications in which wireline solutions are impractical or impossible or the more traditional monitoring applications; wireless will in many cases serve as a complimentary solution rather than a disruptive solutionDespite the emerging trend (hype?) towards embedding switch capability into devices, thereby reducing the need for an independent switch, VDC does not foresee such a trend materially impacting the wireline market for at least 3 to 5 years.
  • The outlook for the overall industrial networking product markets is quite good across a broad and expanding applications base of customers worldwide, but particularly in BRIC and semi-industrial but still developing countries.This rosy picture is grounded in the sound rationale that factory automation obtained via networking solutions, be they wired and/or wireless, does enable companies the ability to improve productivity, enhance operational control thereby improving QC, provides greater operational flexibility and agility to meet changing customer requirements, provides management with greater visibility into operation efficiency and ultimately aids in improving profitability as a result.Wireline solutions will continue to serve the bulk of industrial applications as these proven, tested and reliable solutions are more than adequate to serve most applications.The future for wireless networking solutions is especially attractive as the acceptance and adoption of this more flexible solution is rapidly growing in both more traditional monitoring type applications and, increasingly so but from a small base, in HMI, process control, logic control and even in les s critical control applications .VDC sees the greatest growth for wireless solutions in serving Brown Field applications as part of a complementary “bolt on” to existing applications, acting as a substitute for an upgrade in which wireline solutions no longer adequate, or as the primary solution for Green Field initiatives in which a company is not beholden to any legacy approach and is seeking best in class solutions, which in many cases may be comprised of both wireless and wireline solutions.
  • Industrial Networking: The Bridge to Competitive Industrial Operations

    1. 1. Industrial Networking: The Bridge to Competitive Industrial Operations<br />FEBRUARY 2011<br />webcast<br />
    2. 2. Recording Available<br />A full audio recording is available for download at:<br />http://www.vdcresearch.com/market_research/embedded_hardware/freeresearch.aspx<br />
    3. 3. Recording Available<br />A full audio recording is available for download at:<br />http://www.vdcresearch.com/market_research/industrial_automation/freeresearch.aspx<br />
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    15. 15. Today’s Speaker<br />Prior to joining VDC, Tim held several marketing positions in the utilities industry, where he was responsible for competitive intelligence, market analysis, and business development activities.<br />Tim has a B.S. in Marketing from Bentley College and an MBA – Cum Laude from F.W. Olin Graduate School of Business at Babson College.<br />Tim has authored several reports within the Industrial Automation space including industrial networking and wireless connectivity, HMI solutions, data acquisition solutions and industrial computing. Tim has written or been featured in articles in a number of industrial control industry publications including Business Week, Wall Street Journal,Electronic Business, Field Force Automation, Control Engineering, Control, Control Solutions, Electronic Design, and Integrated Solutions.<br />Tim Shea<br />Senior Analyst<br />– <br />
    16. 16. <ul><li>Broad based adoption of networking solutions across industrial applications as need for greater real time visibility and flexibility is paramount
    17. 17. Despite a broad range of physical approaches to industrial networking, greatest growth centered around SCADA platforms and distributed remote I/O connections
    18. 18. As a result, demand for networking products strong across all platforms, especially robust for wireless
    19. 19. Selection of and demand for industrial networking products being impacted by growing influence of Enterprise IT technical and commercial preferences</li></ul>Demand for visibility, influence of IT, shaping a healthy, fragmented market<br />
    20. 20. Demand for networking solutions coming from broad application base<br />Supervision layer is still the heart of the market today, but, the project footprint is growing in many directions<br />* Other applications cited include video, communication, security, safety, etc.<br />Note: Percentages sum to over 100% due to multiple responses<br />
    21. 21. As networking adoption grows, volume of data transfer across diverse connections does as well<br />Greatest growth coming from SCADA data and a growing reliance on I/O communications plugged into Ethernet <br /><ul><li>Automation generating more actionable data
    22. 22. Wireline Ethernet serving real-time applications
    23. 23. Wireless overcoming reliability and security concerns
    24. 24. Wireless supporting more diverse applications base</li></ul>Networking (Data Transfer) Between:<br />* Actuators, instruments, sensors, etc.<br />
    25. 25. Robust growth seen across product categories as real-time visibility is the new key<br />Users’ 5 year outlook for investments in wireline network products strong and is explosive for wireless<br />2010 Global $ Shipments: >$2.1 billion<br />2010 Global $ Shipments: <$400 million<br />*Compound Annual Growth Rate of Expected 2014 Procurements Compared to 2009 Procurements<br />
    26. 26. <ul><li>Suppliers can serve the growing application base from brownfield and/or greenfield (including in China) initiatives by carefully mapping the right mix of architectures and platforms best suited to meet segment-specific needs
    27. 27. Growing wireless adoption will open up new applications and customer bases to suppliers savvy enough to develop winning product designs, and easy to access free and for fee front –end services
    28. 28. Influence from Enterprise IT suites will continue to influence the selection of and demand for networking products on the factory floor -- automation suppliers need to understand this world and forge partnerships with key IT suppliers, and their partners
    29. 29. Over 1 in 4 respondents are deploying consumer grade devices in an industrial application within next 12 months -- suppliers need to understand the implications on their business
    30. 30. There is margin in this market, but, it may come as much from excellence in project management as much or more than leadership in product marketing. </li></ul>Implications and Considerations<br />
    31. 31. Thank You for Attending this VDC Webcast.<br />For more information please contact:<br />Bob Perugini – Account Directorbperugini@vdcresearch.com | 508.653.9000x144<br />Tim Shea – Senior Analysttims@vdcresearch.com|508.653.9000x132<br />Chris Rezendes – Executive Vice Presidentcjr@vdcresearch.com| 508.653.9000 x120<br />

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