Russia’s Industrial Automation Market in 2007
The year 2007, as expected, was a successful year for the entire Russian economy. High oil prices and high domestic political motivation for investment ensured fairly good growth rates in most industries. Investors strove to use the favorable situation to the fullest extent and build future-oriented businesses. This is why investments into high-tech industries and industrial automation increased more rapidly. As compared to Russia’s GDP growth rate of 7.6% and investment growth rate of 20%, the rate at which industrial automation market grew amounted to not less than 30—35%, whereas some market segments skyrocketed at 1.5 to 2 times higher rate.
Apart from the macro economical and political reasons, technological reasons also contributed to the favorable environment: the market was stable, with no revolutions or major shocks. It doesn't mean that product manufacturers didn’t introduce new products and developers didn’t show new horizons to the grateful automation industry community. These events happened but appeared to be fairly predictable, if not planned way ahead. They happened within the frame of the major long-term market trends, which allowed investors and engineers make informed and, more importantly, quick decisions without being disappointed by the consequences.
The market evolved into a form ofS%% solutions: a very pragmatic conservative approach is applied both to economic and technological issues. The growing interest to good old solutions like MicroPC, which were seemingly doomed to die out in the wave of new processors and form-factors, can be a good witness to that. Another example is the unsuccessful launch of Microsoft Windows Vista. An aggressive attack to conquer consumers by the software market leader was not a traditional success.
However, in this article Microsoft should be paid tribute to in another respect — last year Bill Gates’ giant continued its offensive on the market of embedded operation systems. Windows CE and Windows XP Embedded don’t sound as odd names of Microsoft packaged software to most developers. The two-product marketing strategy, reasonable prices and open source as the last addition give the Windows family a great competitive advantage in the most lucrative market sectors. Good investment environment and growth of financial capabilities of Russian companies undermine the competitive advantages of‘free’ Linux clones. At the same time high industry growth rate as a whole ensured financial inflow to niche sectors, which allowed for new prospects for specialized real-time operation systems, like QNX. Considering the high professional level of Russian programmers and colossal trust the consumers have in this product, one can surely say that the QSSL products are going to lead the market in high-responsibility applications and high-availability systems.
Of course Russian industrial automation market was influenced by global corporate trends of 2007 — consolidation and diversification. Throughout the year the market was engaged in mergers and acquisitions. Major players bought specialized companies to both strengthen their production and R&D potential and diversify their offers to widen the product lines and go to new vertical markets. In this framework they tried to gain new benefits by being not only component suppliers but also system solution developers. There are plenty of examples illustrating this two-sided situation: component producers strive to widen their offering with adjacent products or get to new vertical markets with complete solutions (Advantech, Belden, PLANAR, etc.). On the other side, system producers and automation professionals try to buy firms that produce components and technologies used in their systems (GE Fanuc, Siemens, etc). Russian automation companies are not yet powerful enough to afford acting like steel tycoons, but we should note the strengthening of many companies on the domestic market and the fact that more of them went out to the international market. These days nobody is surprised when Russian companies get contracts to automate production abroad and take part in international exhibitions with ready-made competitive products, not just some abstract ideas.
For instance, Fastwel company is well known at all major industrial automation and embedded systems forums throughout the world. Its line of high-reliability computing modules was enhanced last year with new PC/104+ and PC/104-Express boards based on Pentium M processor and OEM producer oriented COM-modules. On the domestic market Fastwel began production of AdvantiX industrial computers, which means that the company wants to move from component production to complete system and solution delivery.
Speaking about the vertical markets, it's impossible not to mention oil and gas industry. This main driver of current Russian economic development has ensured high demand for all components of intrinsically safe system. The companies who has been on the market for a long time delivering diverse product portfolio are especially interesting for consumers. Oil level sensors, intrinsically safe barriers and even Class 1 Ethernet connection modules allowed system integrators to implement even the most complex projects to automate field production, transportation and processing of oil. In this sphere, as in many others, there was growth of consumer interest to complete systems with human-machine interface, allowing the operator to get more information and take timely and adequate process control decisions.
It was no surprise that modular structure, ease of commissioning and start-up and standardization in software and hardware interfaces became trends of the year in hardware in 2007. High popularity of distributed modular monitoring and control systems like WAGO IO and Beckhoff is an outcome of these trends. It must be said that there is an analogous product on the Russian market already. It is called Fastwel IO and it is customized to Russian work environment and has been awarded Russian certifications. One of the trends in the distributed systems in 2007 was the dominant position of Ethernet solutions over the other industrial networks, which are specializing more and more and becoming niche solutions, for example, in transport industry (CAN).
The industrial switch market boom in Russia can be another argument in favor of this tendency. Every producer from cost-effective (Moxa) to highly reliable and expensive (Hirschmann) can find its niche. EKI series from one of the leaders in the world’s automation industry, Advantech, was also welcomed well on the Russian market.
In the field of top-level automation software Microsoft OPC (OLE for Process Control) was an unconditional leader. What was earlier perceived as an innovation and manufacturer add-on, is now seen as a must have — no hardware or software component without OPC support can be popular among consumers. The products that began to support OPC (e.g. Genesis32) earlier are now reinforced.
The nearest future of SCADA systems is evidently linked to the new OPC UA (OPC Unified Architecture) standard of interaction of processes and nodes in a distributed environment, which is going to be adopted by IEC. The new version of the standard is not tied to Microsoft in any way and has many radical improvements and new elements. The adoption of OPC UA standard will be a major event in the field of software communications for process control systems. The launch of the first 3D SCADA, a native 3D engine-driven ICONICS system built into Microsoft Vista, is also very much expected. This system was written as a 64-bit application from the very beginning. This event is also extremely important. The visualization system developers have now got one more dimension to use. Earlier, ready-made IT solutions were pretty slow to reach the process control systems market. Now system integrators can deliver 64-bit calculation-based systems as early as next year.
In the field of embedded systems the market in 2007 still experienced some issues concerning migration from Geode GXI platform to new processors, first and foremost to AMD LX800. Together with mass transition of European companies’ production units to RoHS technologies this fact influenced quality and delivery time of many products negatively. Last year the market at large overcame negative consequences of this transition process and we can hope that business can develop faster in this segment in the nearest future. At the same time we cannot but note the stabilizing impact that Octagon, Fastwel, RTD and other manufacturers’ long-term availability policy caused at the market. These companies still deliver GX1-based cards to their consumers, allowing for seamless transition to new platforms. Similarly, in the high-performance system sector stability is caused by Intel’s wise policy. Long-term availability of the Pentium M and Celeron M embedded series allowed component developers to establish normal production cycle. The same policy allowed system integrators to have guarantees of product line stability and compatibility in both software and hardware components.
Among leading form factors in 2007 one should note PC104 in embedded systems sector and Compact PCI3U in highway-module sector. PC104 was, is and will be popular among the on-board equipment manufacturers. The growth of its usage was supported in 2007 by high rate of Russian space program implementation and the continuing renaissance of aircraft engineering industry. All these factors must continue to influence the industry favorably in 2008. However, the requirements of the said applications grow every year and thus the embedded form-factor patriarch should be renewed with new processors and high-speed serial buses. The expected adoption of PC104-Express standard in 2008 should open the way to implement modern technologies in on-board and specialized systems. As for Compact PCI 3U, the Russian market follows American and European markets where these solutions have already been implemented in wide range of applications including industrial automation, transport, etc. In this field Russian developers’ hopes are connected first and foremost with Fastwel company and its products.
-- Inna Lukasik , General Manager, Control Engineering Russia