Industrial Ethernet growth seen at 84% annually

Despite slowness in many automation markets, installed industrial Ethernet nodes worldwide are expected to increase at a compound annual growth rate (CAGR) of 84.1% over the next five years. The market consisted of 286,800 nodes in 2002, but will likely explode to more than 6 million nodes by 2007, according to a recent study, "Ethernet at the Device Level Worldwide Outlook,"...

02/01/2003


Dedham, MA -Despite slowness in many automation markets, installed industrial Ethernet nodes worldwide are expected to increase at a compound annual growth rate (CAGR) of 84.1% over the next five years. The market consisted of 286,800 nodes in 2002, but will likely explode to more than 6 million nodes by 2007, according to a recent study, 'Ethernet at the Device Level Worldwide Outlook,' by ARC Advisory Group.

'The market's now feeling the effect of the large number of Ethernet product introductions over the past two years. End-users have been accumulating an experience base with these new products, and volume should build substantially in 2003,' says Harry Forbes, an ARC senior analyst and the study's principal author.

Mr. Forbes' report adds that further penetration by Ethernet at the device level will profoundly affect the future architecture of manufacturing automation. End-users have come to realize the potential offered by Ethernet with TCP/IP protocols to endow devices with Web-based access and similar services. This familiarity with Ethernet and its benefits is undoubtedly propelling growth in automation, even when facing challenging economic times and competition from entrenched device networks.

Shipments jump also

Over the past two years, the study found that the aggregate market volume for industrial Ethernet devices grew by more than 50% annually. Most of these increased shipments of Ethernet devices were reportedly caused by numerous product introductions during the past two years, especially by mainstream automation suppliers.

ARC adds that it expects continuing product introductions during the 2003-07 forecast period. Now, however, the growth rate of Ethernet at the device level is likely to be determined by increasing user acceptance and by further penetration of Ethernet as the suppliers' preferred device interface.

This growth ran opposite to struggles experienced by the worldwide automation equipment market during the same period. In fact, overall automation market conditions were so difficult that they caused outright volume shrinkage in some segments closely related to Ethernet devices, such as small PLCs and DCS hardware components.

Growth factors

The study adds that many forces are contributing to the rapid growth of Ethernet networks at the device level. Many factors have already driven its acceptance at higher automation hierarchy levels, where Ethernet is now completely dominant.

However, device-level industrial networks have many distinct requirements, not all of which are fulfilled by today's industrial Ethernet technology or products. This gives continued market strength to the various device networks.

Nonetheless, the study concludes that Ethernet technology isn't standing still. In addition to ongoing research and development efforts within IT sectors and academia, a growing number of suppliers are working to create Ethernet-enabled products tailored for industrial use. Also, some of the larger IT-related suppliers have a renewed focus on the manufacturing sector in the wake of the popping of the Internet bubble market that fed their growth through the late 1990s.

Industrial Ethernet Device Shipments (in thousands of nodes per year)

2002

286.8

2003

548.5

2004

1,057.7

2005

1,978.4

2006

3,541.2

2007

6,063.3

Source: Control Engineering with data from ARC Advisory Group (Dedham, MA), www.arcweb.com





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