VDC predicts Top 10 Trends for Industrial Networking

January 04, 2011
News

Summary

VDC says real-time Ethernet will dominate, wireless is growing, networking will be built in, a large IT player will buy an industrial networking provider, and more companies are going overseas.

January 4, 2010 - VDC Research Group analysts announced their predictions for the key trends anticipated to shape the 2011 industrial networking solutions market. Real-Time Ethernet Capabilities Will DominateFor a majority of discrete industrial automation applications, Ethernet/IP and PROFInet will serve as primary connectivity solutions for a majority of discrete industrial automation applications. Modbus TCP, ISA SP-100.11a and Wireless HART, on the other hand, will serve as primary connectivity solutions for a majority of process automation applications. "Real" Growth for Wireless Networking SolutionsAfter years of unfulfilled hype and hope, the market for wireless networking solutions will experience a material increase in purchase orders, shipments and revenues. The development of standards, improved technology and security (such as ISA 100 and wireless HART, mesh networking and WPA2, respectively) are removing some of the major barriers to adoption and relieving security and reliability concerns. The family of 802.11 networks will play an increasingly dominant role as the technology improves and acceptance of the networks continues to edge out the legacy narrow band proprietary networks. Mergers & Acquisitions in 2011 Will Shape Industry Structure for the Decade to ComeVDC expects the impact of a number of technical and commercial market convergences will lead to more M&A activity, with an increasing likelihood that a large IT player will make a "large bet" in acquiring an industrial networking solutions provider. Convergence Will Rationalize Product OfferingsTo drive down costs, provide space savings and reduce wire interface, automation suppliers are embedding switch port capability into products, such as network I/O adaptors, PLCs and drives. Several major automation control houses indicated as much as 10% of their overall product portfolios will be comprised of products incorporating switch capability to capture growing demand for Ethernet capability, and expect to offer all their products with embedded switch capability. Internalization of Engineering and R&DLeading automation suppliers are seeking to reduce cost by taking advantage of lower cost overseas talent with similar, or stronger, education and skill sets. Suppliers, intent on staying close to their customer base, are moving their manufacturing operations overseas (particularly to the Asia-Pacific region) and tapping an educated and skilled talent pool at material cost savings.ABOUT VDC RESEARCH GROUPVDC 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. Our clients rely on us for highly segmented research and analysis which is derived from our unwavering commitment to the idea that all markets are collections of smaller market segments and that winning companies must develop and execute strategies that are segment-specific. Learn More

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