What is happening to third-party I/O suppliers?
Traditional PLC system suppliers still hold a dominant position in the I/O modules market, facing increasing competition from “non-traditional” PLC suppliers or “third-party” I/O suppliers, which took over one quarter of the world market for remote PLC I/O modules
Although, from a revenue perspective, traditional PLC system suppliers still hold a dominant position in the I/O modules market, they’ve been facing increasing competition from “non-traditional” PLC suppliers or “third-party” I/O suppliers, which took over one quarter of the world market for remote PLC I/O modules, according to the latest I/O module report published by IMS Research.
Unlike large system suppliers, which sell I/O modules simply as part of their total solutions across a wide range of industry sectors, third-party I/O suppliers have been more successful in selling their I/O products to niche industries or specific applications. I/O modules have been sold as an extension of their existing product lines or to further strengthen their expertise in particular markets. This also explains why many I/O modules with advanced features or off-shore technology are very often first established by third-party I/O suppliers.
There have also been external driving forces that have contributed to the business growth of third-party I/O suppliers; the trend to greater implementation of remote I/O modules by OEMs or system integrators has helped. They mix and match controllers and I/O, so they can use the I/O modules best suited to their particular needs and drive down the cost, by sourcing I/O from any vendor for the preferred controller. Furthermore, as more vendors adopt Ethernet for communications between controllers and I/O modules, the door has been opened to open systems where a controller from one vendor can be used easily with I/O from another. This significantly expands the number and types of third-party devices and systems that can be supported by the controllers.
Many third-party I/O suppliers are European, which are now developing more business outside EMEA, particularly in the Americas and in Asia. The existence of third-party I/O suppliers increases competition to traditional PLC I/O suppliers, driving both sides to introduce more features into their products and ultimately enhance the price-performance ratio of I/O. However, third-party I/O suppliers are not expected to take over the dominant position from traditional system suppliers. They will continue focusing on particular markets they are able to dominate, and where they can create sustainable business.
- Edited by Amanda McLeman, Plant Engineering, www.plantengineering.com