Change is afoot in the Data Acquisition Market | Automation.com

Change is afoot in the Data Acquisition Market

June 252012
Change is afoot in the Data Acquisition Market
June 2012
 
By J Timothy Shea, Senior Analyst at VDC Research Group
 
VDC partnered with Automation.com to develop recently published comprehensive demand side and supply-side market intelligence studies for Data Acquisition Solutions comprised of external chassis & module, plug-in data acquisition analog I/O boards and standalone (non-bundled) data acquisition software. The comprehensive research covered eight different external chassis & module products, twelve different plug-in analog I/O board bus architectures/form factors and standalone (non-bundled) data acquisition software which was analyzed within eight vertical market demand side analyses reports and three regional supply-side technology opportunity analysis market studies.
 
External Chassis & Modules
Plug-In Analog I/O Boards
Data loggers
CompactPCI
Distributed remote I/O
ISA
Modular data acquisition systems
PC/104
Paperless chart recorders: <144 mm panel cutouts
PCI
Paperless chart recorders: >144 mm panel cutouts
PCI Express
PC front ends: Other
PCMCIA (PC card)
PC front ends: USB
PXI
Standalone systems
PXI Express
Standalone (non-bundled) DAQ software
VME
 
VPX
 
VXI
 
XMC
 
Based on discussions with 600 respondents and over 90 suppliers of the data acquisition solutions under study VDC was able to develop a deep understanding of how evolving dynamic issues and trends are impacting the marketplace and creating areas of change and increased opportunity; in addition, VDC imparted some key strategies on which suppliers should focus their efforts on so as to maximize their chances of achieving greater success in the $1.45 billion and growing, but fragmented, market in 2011. The overall outlook for data acquisition solutions varies greatly by product platform and bus architecture/form factor, but overall demand for plug-in data acquisition analog I/O boards will continue to lag that of external chassis & modules over the forecast period.
 
Major factors driving increasing demand for data acquisition solutions focused on several key technical requirements and preferences of end users. Among some of the most noteworthy driving factors included, but were not limited to the following drivers:
 
  • A growing need for DAQ systems and boards providing greater performance in technical areas such as higher channel counts, greater converter resolution and faster sample data rates.
  • A growing need to invest in data acquisition solutions which employ the communications networks which provide the greatest bandwidth, interoperability, faster speeds and/or fulfill the unique requirements to meet the needs of a customer’s specific application requirements.
  • A growing desire to work with suppliers, and/or their partners, to develop more meaningful relationships in which the user company and its “partner” co-develop product road maps, service and solution integration road maps and strive to develop a deeper understanding of how the right data acquisition solution can improve customer’s operations and/or solve their respective “pain points”.
  • Although the market for data acquisition solutions is fragmented, suppliers enjoying the greatest success in the future will be those that develop a deep understanding of their customer’s application needs, develop products and services designed to meet those needs at a competitive price/value proposition and will leverage more intimate customer relationships to identify new applications and continue to help the customer solve their operational problems.
 
The market for data acquisition solutions has experienced some interesting changes since VDC covered the market during its 2008 research investigation. Among some of the most noteworthy changes include the following:
 
  • The introduction of new coverage on modular data acquisition systems, which not only represent the largest external chassis & module product segment under study, is expected to experience the fastest growth in demand among all external system level products across all three major geographic regions. VDC defined modular systems as products which use plug-in modules to customize the types of signals that can be input or output from the system whereas other solutions are not designed to be customizable nor modular. Examples of such products include NI’s CompactDAQ, Yokogawa’s MW 100 and Dataforth’s isoLynx System, among others.
  • Demand for paperless chart recorders, as well as data loggers with LCD displays, has also been more robust than VDC’s earlier forecast from its 2008 research. Stronger demand is being driven by continued product improvements and new product design which is providing real-time visibility, agility and flexibility as well as enhanced analytical functionality. The continued trend away from paper based recording is also continuing to fuel above average growth among paperless solutions.
  • The continued migration towards USB and Ethernet based front end solutions offering PC computing power and functionality is continuing at even faster adoption rates than previously forecast as users are increasingly relying on the speed, performance and ease of use provided by products interfacing with these tried and true communication networks to gain access to real-time actionable information.
  • Demand for legacy platforms such as data loggers and standalone systems is expected to lag behind other solutions which offer multi-functional performance, enhanced flexibility, and/or greater real-time information access and delivery.
The need for data acquisition solutions cuts across every industry and application as the requirement to obtain real-world data (i.e. pressure, temperature, flow, etc.) and transform it into actionable real-time information has never been more omnipresent and urgent. VDC’s research determined that demand for data acquisition solutions is greatest markets in the Americas and Asia-Pacific where the deployments of these solutions in applications found in manufacturing - both process and discrete, laboratory/R&D, scientific and military and aerospace markets is more prevalent.
 
Based on expected continued expansion in China and other developing countries in Asia-Pacific region, VDC is forecasting the fastest market growth rates in the Asia-Pacific region. Growth in the military and aerospace segments in several Asia-Pacific countries is seen as these sovereign countries seek to lessen their reliance on the United States for security and China also seeks to continue to grow its influence and presence in the region.
 
VDC does not foresee any major slowdowns in the outsourcing of domestic (i.e. USA) manufacturing and R&D operations to the Asia-Pacific region during the forecast period through 2015. However, VDC does anticipate seeing the initial signs of a resurgence of “made in America” manufacturing push which will not only stem the tide of outsourcing of domestic manufacturing jobs overseas but also see the beginnings of a recovery of manufacturing operations in the United States starting in late 2015 and beyond.
 
 

The need to obtain data from real-world phenomena such as pressure, temperature, flow, current, level, strain gauge and many more sensor inputs is required across a plethora of consuming industries and market segments. The top fifteen consuming industries ranked in descending order based on 2011 worldwide data acquisition platform shipments were as follows:

 
External Chassis & Modules
Plug-In Analog I/O Boards
Electric Power
Military/Aerospace
Automotive
Electric Power
Military/Aerospace
Testing Laboratories
Environmental Monitoring
Automotive
Testing Laboratories
Medical/Health
Pharmaceutical
Semiconductor
Electrical Products
Electrical Products
Water/Waste Water
Oil/Gas
Consumer Electronics
Food & Beverage
Food & Beverage
Consumer Electronics
Oil/Gas
Petrochemical
Petrochemical
Pharmaceutical
Medical/Health
Water/Waste Water
Chemical
Universities
Primary Metals
Environmental Monitoring
*Top five consuming industries comprised almost 48% of external chassis shipments and 55% of board shipments
*Top ten consuming industries comprised over 69% of chassis shipments and 75% of plug-in board shipments
 
There are a number of major application classes for which VDC segmented the market for data acquisition solutions serving the above consuming industries. The top ten major application classes ranked in descending order based on 2011 worldwide shipments were as follows:
 
External Chassis & Modules
Plug-In Analog I/O Boards
On-Line Process Manufacturing
Military/Aerospace
Off-Line Production Testing/QC
On-Line Process Manufacturing
Scientific
On-Line Discrete Manufacturing
Military/Aerospace
Off-Line Production Testing/QC
On-Line Discrete Manufacturing
Scientific
Laboratory/R&D
Laboratory/R&D
Industrial Maintenance
Design Validation Testing
Electronic Testing
Electronic Testing
Design Validation Testing
Functional Testing
Structural Testing
Structural Testing
 
VDC obtained feedback from 600 respondents identified as users and related stakeholders (end users, OEMs, channel, etc.) to learn more about the key factors that are driving their investment decisions in the various data acquisition solutions under study. VDC believes that suppliers need to make a concerted effort to truly understand their customer’s application needs, their operational requirements and conflicts, and to design products and services at mutually beneficial value propositions which can help the customer to be more competitive in their own business.
 
Feedback from survey respondents indicated that the requirements of users of external chassis & modules and plug-in data acquisition analog I/O boards are similar, yet nuanced. Not surprisingly, accuracy topped the list of most important product features that respondents considered when making an investment in an external chassis & module and/or plug-in analog I/O board solution. Suppliers are well advised to consider the top 15 product features ranked in descending order based on respondents surveyed.
 
 
VDC determined that a user’s commercial requirements and preferences are in many cases just as important in the investment decision-making process as their technical requirements. A supplier should focus their efforts on developing best-in-class cutting edge products but still may have difficulty achieving greater success in the market if they overlook some of the tangibles such as price or applications support and the intangibles.
 
 
The competitive landscape in the data acquisition solutions marketplace, especially the external chassis segment, is almost as fragmented as the consuming industries and application segments the suppliers themselves seek to serve. Although in several instances the leading players were companies providing a broader product portfolio in terms of platform types – external chassis, plug-in boards and/or standalone data acquisition software, there were almost just as many instances in which a supplier which possessed a narrow product focus enjoyed relatively large market share and/or business volumes. National Instruments dominated the top ten suppliers of each major product platform category and enjoys very strong brand name recognition.
 
External Chassis & Modules
Plug-In Analog I/O Boards
National Instruments
National Instruments
HBM
GE
Yokogawa
VTI Instruments
Bruel & Kjaer
Agilent Technologies
Campbell Scientific
Advantech
Agilent Technologies
Pentek
Dewetron
ADLink Technology
Hioki E.E. Corp.
DynamicSignals
Fluke Corporation
Acromag
Invensys Eurotherm
Measurement Computing Corp (IOTech)
*Top five suppliers comprised over 41% of external chassis shipments and almost 61% of plug-in board shipments
*Top ten suppliers industries comprised almost 55% of chassis shipments and over 76% of plug-in board shipments
 
The real key for suppliers seeking success in these cluster segments is to develop and follow one of two basic strategies. One, to develop the broadest product offering possible given their financial and product development capabilities (including leveraging re-label agreements, as applicable) and support that product offering with best-in-class service and application level support. Two, remain focused on offering a narrow product focus designed to serve the need of niche market segments and develop expertise which is not easily imitated or copied by other competitors.
 
Success in terms of increasing dollar volume shipments and attractive gross margin can be enjoyed by savvy suppliers looking to serve the markets for data acquisition solutions. The probability of experiencing that success will be increased by firms that develop effective strategic game plans of attacking the market and execute on intelligent tactical initiatives designed to exploit the opportunities presented in a large and growing, yet fragmented, market which spans across many different industries and applications.
 
In the final analysis, VDC determined that the overall market for data acquisition solutions is large and growing, yet highly fragmented based on disparate requirements and preferences of a plethora of customer segments, each which possess varying applications needs, technical performance requirements, and commercial requirements. However VDC determined that many of these customer segments can be classified into meaningful clusters that can be well served by different data acquisition solutions in a more effective manner. VDC’s market intelligence found some useful strategies on how to capitalize on serving these market clusters cost effectively and with volume and gross margin objectives.
 
ABOUT THE AUTHOR
 
J Timothy Shea, Senior Analyst, can be reached at VDC Research Group, Natick, MA; 508-653-9000, x-132, [email protected]
 
VDC Research Group (VDC) is a technology market research and strategy consulting firm that advises clients in a number of technology markets. Using rigorous primary research and analysis techniques, the firm helps its clients identify, plan for and capitalize on current and emerging market opportunities. Our products and services consist of research reports, annual research programs and custom research and consulting services. Founded in 1971, the firm is located in the Boston area.
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