System Integrator Giants of 2013

The 100 largest system integrators in the industrial automation business—who they are and what they do.
By Vance VanDoren, PhD, PE June 13, 2013

Applications with tanks require system integration to monitor product flow in; the process (if any) inside; and the movement of product from the tanks. Integrated systems or processes help monitor information of products (like beer) from raw ingredients tIn its second year of production, the 2013 System Integrator Giants (SI Giants) program has assembled the 100 largest system integrators based on system integration revenue for the most recently completed fiscal year. Compared to 2012 SI Giants, the 2013 metrics have significantly increased in response to the number of participating firms, making the group even more “giant” in many ways.

For 2013, all 2,387 system integrators listed in the Control Engineering Automation Integrator Guide (AIG) were asked to provide details about annual revenues, head count, client base, industries and areas served, technical skills, professional affiliations, and product experience. They also were asked about the educational opportunities available to employees and the biggest challenges they face as a company. Respondents reporting the largest system integration-related revenue are shown in the accompanying table.

In the early days of the computer industry, it was said that no one ever got fired for buying IBM, meaning that the largest vendor in the business was never a bad choice. Some would say the same is true in today’s industrial automation industry when it comes to system integrators. Bigger integrators with more personnel and a broader geographic presence are arguably more adept than smaller competitors at implementing large-scale automation systems spread over multiple locations.

In practice, the advantages of hiring a larger integrator versus a smaller one probably depend on the particulars of each project, so the question of whether or not bigger is always better can never be definitively answered. Even the question of which integrators are the largest in the automation industry was a topic of debate before the 2013 System Integrator Giants survey.

A robot is a moving, functional container of integrated systems with sensors, logic, and actuation, usually integrated with a larger production environment. This one was at ABB Robotics Technology Day 2013, in May. Courtesy: CFE Media, Mark T. Hoske

The biggest change from last year is the addition of M+W Automation—the No. 1 system integrator for 2013—moving last year’s leader, Wood Group Mustang, to No. 2. Everything about M+W Automation is, well, giant. Its 800 automation and control engineers outnumber the entire staff at 96 of the other SI Giants, and its $150 million integration-related revenue accounts for more than 12% of the $1.2 billion system integration revenue reported by all 100 SI Giants combined. M+W Automation’s parent company, M+W Group, is even larger, with 2,000 engineers, 7,500 employees overall, and $3.5 billion in overall corporate revenue, nearly equal to the $3.6 billion overall revenue reported by the other 99 SI Giants.

More firms with larger total revenue and larger system integration revenue replied to the SI Giants survey for 2013 than in 2012. Year-to-year total revenue increased 215% to $7.1 billion, and system integration revenue increased 41% to $1.2 billion. As a

The average size of the SI Giants also grew between 2012 and 2013, though mostly from the addition of several larger companies to the mix more than the growth of those returning this year. The average integration-related revenue figure rose from $876,000 to $1.2 million, the average engineering staff rose from 52 to 88 (with 50 automation engineers  on average versus 36 in 2012), and the average revenue per employee rose from $187,000 to $280,000. The median income for automation system integrators in general (as represented by the other 2,287 integrators listed in the AIG) remained in the $5 million to $10 million range. See the staffing information chart for employee counts in other categories, all of which are higher for 2013.

On the other hand, survey results do show some evidence of actual growth in the automation system integration industry, at least in the sense of larger companies forming from mergers and acquisitions. More integrators reported acquiring other companies (9%) than were acquired (4%), suggesting a net gain of capital and resources for the industry.

Engineers represent about 34% of staff totals for the 2013 SI Giants, down from about 38% in 2012. This year’s 100 list includes a higher proportion of larger firms. Courtesy: CFE MediaMore integrators reported acquiring other companies than were acquired, suggesting a net gain of capital and resources for the industry. Courtesy: CFE Media

See affiliations and industries for the 2013 SI Giants continued on page 2.

Professional affiliations

The 2013 SI Giants are more involved in professional and trade organizations focusing on automation-related skills and industries that use automation. Majority of respondents belong to CSIA; RIA has the largest growth opportunity among the 2013 SI Giants.As the professional affiliations chart on shows, this year’s SI Giants have also demonstrated a significant increase in involvement with the various professional and trade organizations that focus on automation-related skills and industries that use automation. And like last year, the survey results show that SI Giants tend to join these organizations more readily than other automation system integrators do.

For example, in 2013 more than half of the SI Giants (57%) reported being members of the Control System Integrators Association (CSIA), up from 43% in 2012. CSIA membership also grew among automation system integrators in general, but not nearly as much. This year, 18.5% of other integrators cited the CSIA as a professional affiliation, up from 17% last year.

It comes as no surprise that an association dedicated to control system integrators would have a significant following among both SI Giants and automation system integrators in general, but exactly why the CSIA should appeal so much more to larger firms is not altogether obvious. There was a time that the CSIA required a minimum annual revenue before a prospective member could join, but that requirement has been lifted. Perhaps smaller integrators still think of the CSIA as an organization just for the “big guys.”

Robotics vs. controls

The organization for robotic system integrators, the Robotics Industry Association (RIA), was cited by 3% of both SI Giants and other integrators. At the 2013 Automate Show, the vast majority of system integrators exhibiting were RIA members (the event was sponsored in part by the RIA), yet only one belonged to the CSIA. Control system integration and robotic system integration industries seem to have little overlap, even though both cover industrial automation.

This divide is also evident in engineering specialties performed by the 2013 SI Giants. Robotics (32%), vision systems (33%), and automated assemblies (33%) are the three least-common specialties performed, while automation and control engineering (95%), installation and start-up (93%), and HMI and operator interfaces (92%) round out the top three. Among automation system integrators in general, automation and programmable logic controller (PLC) skills were not so dominant (56% and 63%, respectively), but still well ahead of robotics and vision systems (32% and 30%, respectively).

Other professional organizations that gained popularity among the SI Giants included Underwriters Laboratories (UL), the Project Management Institute (PMI), and the National Society of Professional Engineers (NSPE). Comparing the 2012 and 2013 SI Giants data, UL increased from 19% to 39%; PMI increased from 11% to 24%; and NSPE increased from 10% to 24%. The International Society of Automation (ISA)  remained in the top five as the third most-cited professional affiliation, with 34% in 2013 vs. 38% in 2012. Rounding out the top 10 affiliations were the National Fire Protection Association (NFPA, 25%), the Control Systems Society (CSS, 20%), the International Society of Pharmaceutical Engineers (ISPE, 18%), the Institute of Electrical & Electronics Engineers (IEEE, 17%), and the American Society of Mechanical Engineers (ASME, 17%).

Most of these professional/third-party organizations are dedicated to the practice of various technical disciplines, which makes sense considering what automation system integrators do for a living. The list of most-cited professional affiliations among other integrators was similar: ISA, IEEE, CSIA, UL, CSS, NFPA, ASME, NSPE, and PMI.

Industries served

Food and beverage, oil and gas, chemicals and petrochemicals, automotive, and water and wastewater are the top five industries for the 2013 SI Giants. SI Giants selected among 33 industries served. Courtesy: 2013 CFE Media SI GiantsISPE was the 2013 SI Giants’ only top 10 professional affiliation associated with a specific industry. It did not make the top 10 list for automation system integrators in general, but even for that group, ISPE was still the most popular of all professional organizations that focus on an industry rather than a technology. Ironically, pharmaceuticals as an industry was not as popular with the 2013 SI Giants or the other integrators listed in the AIG. Only 5% of the 2013 SI Giants serve the pharmaceutical manufacturing industry (see the chart on page 50), up 2% from 2012. Despite the industry’s increased popularity, pharmaceuticals still only accounted for half as much revenue as the most-served industry on the list: food and beverage (10%). The formerly most-served industry, oil and gas, dropped from 11% in 2012 to 8% in 2013. Rounding out the top five were chemicals and petrochemicals (6%), automotive (6%), and water/wastewater (6%), about the same as last year.

It is interesting to note that only one of these top five industries served, automotive, is discrete, and of the top 10, there’s only one more, material handling (4%). The remaining industries are process or hybrid industries: metals (4%), consumer products (4%), and processing (3%). Perhaps the simplest explanation is that the refineries, foundries, and processing plants of process industries generally operate on a much larger scale, with the exception of automotive plants of discrete industries, requiring the largest system integrators. 

Next page shows product experience and engineering specialties; see last page for full list of industries served.

Product experience

Rockwell Automation brands, Wonderware (Invensys), Microsoft, Dell, and Siemens Industry products were cited most often by the 2013 SI Giants. Courtesy: 2013 CFE Media SI GiantsThe divide between the SI Giants and robotic system integrators came up again when the SI Giants were asked about vendor’s products they have integrated in the past 12 months. The most-cited robotics vendors were ABB with 55% popularity and Mitsubishi Electric Automation with 32%. But even those results are probably overestimates of the SI Giants’ involvement in robotics since ABB and Mitsubishi offer other automation products, and the product experience question did not specify divisions.

Which brands proved popular with the SI Giants? The Product Experience table (online only) shows that Rockwell Automation’s Allen-Bradley brand from 71% in 2012 to 92% this year. The Rockwell Automation brand itself increased to 89%, and Rockwell Software completed the Rockwell hat trick at 86%, up from 55% in 2012.

While the defending champion, Siemens Industry, fell beneath the three Rockwell Automation brands with 79% this year, popularity improved from 71% in 2012. Invensys Wonderware also increased to 80%, up from 68% last year. The biggest gainers in this year’s product experience list were Microsoft (82%) and Dell (81%). Last year, they were 53% and 42%, respectively. These results would suggest that the SI Giants have become even more partial to product vendors offering PLCs, HMI software, and the personal computers (PCs) required to program PLCs and host HMI software.

Engineering specialties

The Engineering Specialties table indicates that HMIs (92%) as a speciality are only slightly more selected by the 2013 SI Giants than PLCs (91%). Only the more generic skills of automation and control engineering (95%) and installation/start-up (93%) placed higher.

Ironically, the SI Giants did not identify PCs as a particularly popular engineering specialty, in spite of their affinity for Dell and Microsoft. In 2013, only 58% of firms listed PCs as an engineering specialty, up 30% from 2012. Keeping consistent with the 2013 SI Giants’ top five ranking of PMI, project management is an engineering specialty offered by 90% of the firms, up from 52% in 2012.

Automation and controls, PLCs, installation and start-up, HMIs and operator interfaces (OIs) are among leading engineering specialties for the 2013 SI Giants. Courtesy: CFE Media

The 2012 SI Giants’ top 10 engineering specialties were virtually identical as were the 2013 top 10  engineering specialties cited by other integrators in the AIG, though this year’s popularity scores for SI Giants were considerably higher than both.

These results also were consistent with the SI Giants’ affinity for the CSIA and Rockwell Automation. All of the top 10 engineering specialties are integral to the practice of automation system integration, Rockwell Automation has significant market share for the products involved (at least in North America), and the CSIA is the control system integrators’ most popular association, just as its name implies.

See what concerns and challenges the SI Giants face in business for 2013 on page 4.

Staffing issues ranked as the highest concern for 2013 followed by the economy, and new client growth, based on 84 write-in responses. See selected comments. Courtesy: 2013 CFE Media SI GiantsChallenges and opportunities

In an open-ended response, by far the challenges most often cited by the survey’s respondents focused on finding, training, and compensating the skilled labor they need. Last year’s top issue, the economy, came in a distant second for 2013. This result seems to reflect the overall optimism about the economy in general and the automation industry in particular as reported by the CSIA in its own recent survey. (See “System integrators worldwide expect revenue growth in 2013.”)

Business seems to be so good that business-growth issues barely registered in respondents’ comments this year. Perhaps the 2013 SI Giants already have their hands full, but there’s a hidden danger in complacency. In response to a separate survey question, the SI Giants estimated their business percentage from existing clients, which showed that a whopping 86% of all respondents rely on existing clients for at least half of their revenue, and 12% rely on existing clients almost exclusively.

Repeat business is desirable, but what happens when projects run out? Presumably, there must come a time when even the most loyal client finds that everything that can be automated has been. But only three of the 2013 SI Giants cited “finding new customers” as a current challenge. Apparently, the rest of the SI Giants plan to cross that bridge when they come to it. Another challenge was geographical expansion. One SI Giant expressed interest in offering more services in more places, compared to 21 in 2012. It could be argued that trying to cover additional territory without opening new offices could be futile since clients would rather hire an integrator that can be on site within a matter of hours rather than days. (See the Areas Served charts online extra.)

More than half (56%) of 2013 SI Giants derive 76% to 100% of current business from existing clients. Courtesy: CFE MediaOnline extra: Answers to “Where does business derive?” may be seen more easily in a table. (Also see the pie chart, above.) Courtesy: CFE Media

After two years worth of data collection from the System Integrator Giants, it remains apparent that system integrators continue to be a key component in the ever-evolving industrial manufacturing landscape.

– Vance VanDoren, PhD, PE, edits the Control Engineering Automation Integrator Guide. Patrick Lynch, project manager, provided data collection/analysis. Edited by Mark T. Hoske, content manager, Control Engineering, mhoske@cfemedia.com and Amanda McLeman, project manager.

More information gathered from this year’s SI Giants on the next page, with survey link.

Online extra text, with more tables, charts, and links

Geographical coverage

In the U.S., Northeastern states are least served by the 2013 SI Giants. Courtesy: 2013 CFE Media SI GiantsReader traffic recorded by the Automation Integrator Guide’s online search engine indicates that integrators could find more business by moving into areas that are currently underserved. The “Areas Served” graphic shows that most of the U.S. is already reasonably well covered, though there’s a slight gap in the Pacific region (AK, WA, OR, CA, and HI). Last year, readers made it the second most-popular region behind East North Central (OH, IN, IL, MI, WI) in terms of places where an integrator’s help was needed. But when asked to specify the areas that they serve, the SI Giants ranked the Pacific region just about last by a small margin.

But in Europe (see additional geographic charts at the bottom), there’s a more significant mismatch between where readers would like to have an integrator’s services and where integrators are actually working. More readers have been looking outside of the European Union (Norway, Russia, Turkey, etc.) than inside, but the SI Giants expressed considerably more enthusiasm for serving the European Union (47%) than the rest of Europe (29%).

Educational opportunities

The SI Giants also reported opportunities of a different sort in the “Mentor and Education” chart online. No doubt motivated by their staffing problems, SI Giants provided their employees with a variety of professional development programs to enhance their careers. Like last year, the most popular were: 1) Paid attendance to conferences/tradeshows (91%), 

More than half of the 2013 SI Giants offer tuition reimbursement and more than 90% pay for conference and tradeshow attendance. Courtesy: 2013 CFE Media SI Giants

2) Paid training and testing leading to professional certifications (89%) and 3) Attend webcasts during business hours (86%). The second might explain why SI Giants are so willing to join professional organizations like ISA, NFPA, and PMI (all offer individual certifications in their disciplines). SI Giants were somewhat less interested in simply paying for their engineers to join; only 73% included “Paid membership to societies” among the professional development opportunities offered.


Staffing comments
Biggest concerns for 2013: write-in comments

Attracting and retaining talented programmers and engineers continues to be our top priority. We have experienced phenominal growth in automation systems integration projects and continue to see increasing need for additional staff.  With the “automation economy” heating up, we see increasing competition to attract and retain quality employees.

Challenge: Because our goal is to continue to grow this places a stong emphasis on recruiting and retaining our professionals.  We seek to realize growth through retention and organic growth.

Our biggest concern for 2013 is the constraint to increase our skilled workforce. There is an extremely high demand for our automation and safety-related engineering services, and the development process to grow people to expert status takes years. There is a continuous deficit in the industry’s workforce that cannot keep up with the continuous demand for the services we provide.

Recruiting talent in this industry is an ongoing challenge for two reasons: 1) Demographic retiring with needed experience. 2) Universities and colleges are not producing engineers/technologist in this field as past demand decreased over last 30 years with manufacturing moving off shore. This has left a deficit as a nation.

Lack of available skilled workers is far and away the biggest challenge for the System Integrator Giants for 2013. Courtesy: 2013 CFE Media SI GiantsSystems integration firms are ramping up very quickly to deal with the impact of low cost natural gas and oil resources (and their derivative products) located in North America. Many companies are vying for the same resources, and cost of those resources is increasing. This results in more proactive hiring practices, which leave companies exposed to an economic upset such as the downturn in 2008. A large market retraction is something that we will be on guard for.

Comments on economy

Another downturn in the economy: The last one had a significant impact on customer spending and our financial condition and caused us to make some tough decisions regarding engineering and administrative staffing.

Our biggest concern is the cyclical nature of our engineering engagements, where we see many companies moving in concert when delaying or accelerating projects, presumably responding to common macro-economic factors. This poses a challenge in resource management and heightens the need for accurate forecasting.

Political climate will hinder our business. We rely on many large companies for our revenue and they are seeing tightening regulation and tax implications for there products.

Comment on client demands for lowest bid

Inconsistent and poor upfront planning by customers with orders based upon price and not value.

Technology comment

SCADA system security and practices are the biggest concern.

See additional tables and charts from the SI Giants 2013 below:

Food and beverage, oil and gas, chemicals and petrochemicals, automotive, and water and wastewater are the top five industries for the 2013 SI Giants. SI Giants selected among 33 industries served. Courtesy: 2013 CFE Media SI Giants

Parts of Asia are as well-covered as Europe by the 2013 SI Giants. Courtesy: 2013 CFE Media SI GiantsIn non-U.S. North, Central, and South America, the greatest opportunity is in South America, according to 2013 SI Giants. Courtesy: 2013 CFE Media SI Giants