Industrial Ethernet devices set for high growth

Wednesday, 05 February, 2003

The worldwide market for industrial Ethernet devices is expected to grow at a Compounded Annual Growth Rate (CAGR) of 84.1 per cent over the next five years. The market was 286.8 thousand nodes in 2002 and is forecasted to be over 6.06 million nodes in 2007, according to a recent ARC Advisory Group study.

The study notes the market is 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, according to the US-based ARC group.

Growing market acceptance
The study notes that further penetration of Ethernet at the device level is "a key factor, which will profoundly affect the future architecture of manufacturing automation." Furthermore, the study notes "end users have come to realise the potential offered by Ethernet with TCP/IP protocols to endow devices with web-based access and similar services." This, says ARC is why Ethernet "...has propelled its growth in the automation space despite challenging times and competition from entrenched device networks..."

During the last two years, the aggregate market volume for industrial Ethernet devices has grown at over a 50 per cent annual rate. This is quite different from the struggling worldwide market for automation equipment during the same period. These market conditions were so difficult that they caused outright volume shrinkage in some segments closely related to Ethernet devices, i.e., small PLC's and DCS hardware components, the study reveals.

ARC says most of the increase in shipments of Ethernet devices can be attributed to a very high level of product introductions during the past two years. In other words "...the growth rate of Ethernet at the device level is likely to be determined both by increasing user acceptance as well as by further penetration of Ethernet as the preferred device interface chosen by suppliers..."

Meeting the needs of manufacturing
According to the recently released study, a large number of forces are contributing to the rapid growth of Ethernet networks at the device level. Many of these same factors have propelled its acceptance at higher levels in the automation hierarchy as well, where Ethernet is now completely dominant.

Device-level industrial networks have requirements that in many ways are distinct and not all of these requirements are addressed by current industrial Ethernet technology.

However, says ARC, Ethernet technology is not standing still. In addition to ongoing research and development efforts within the IT sectors and academia, a growing number of suppliers are working to create Ethernet-enabled products tailored for industrial use.

Furthermore, the study shows that 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.

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