The fragmented nature of the industrial automation, facility control, and industrial IoT markets often results in very long sales cycles that are very technologically complex. There are a few ways to look at this: on the good side, customers tend to be pretty loyal which often means retaining their IIoT solution in the long-term.
The downside is that one company cannot provide every single requirement for industrial automation and IIoT and this can lead to complications for customers who have not consolidated their IoT and automation strategies into a cohesive plan. Let’s take a bit more of a deeper look.
1.) Long customer retention
Once finished, a typical industrial facility operates for at least 10-15 years before it needs an overhaul. Individual machines, larger infrastructure, automation products, and the facility’s process knowledge base is built over a long period of time and tend stay put for a very long time. The same goes for any automation and data analytics investments that the factory makes, as they are usually rolled up into the larger knowledge base.
2.) Lack of unified technology standardisation
The automation industry today uses somewhere between 50 and 70 different communication protocols. And due to long intervals between infrastructure overhauls, some of these protocols have been around since the 1960s! For example,MODBUS/RS485 was first used since 1970 and though most serial ports have been disabled on today’s modern computers, they are easily available on latest automation products. Due to pressure from industrial customers, some large automation providers have moved to a more common physical layer—Ethernet LAN for wired and 2.4 GHz for Wireless—but still use different messaging—EtherCAT, Ethernet/IP, PROFINET, MODBUS TCP/IP and more.
All these protocols were developed by large corporations with one goal in mind: tieing the customer to their product offerings and services. A customer that uses Ethernet/IP based PLC from GE cannot use Profinet PLC from Siemens without significant investment. This has led to an entirely new market of businesses that provide protocol converters. Without the upfront time of planning which technology standards are being used, customers can end up locked into an ecosystem completely separated from tools that could be of some benefit.
3.) Multiple levels of organizational involvement
There are 5 technology layers of automation and control:
- Sensors and actuators
- Field communication
- Data processors and collectors
- Programmable controllers
- Data visualisation and control
Each of these layers has technology that is provided by different organizations. Sensors from OMEGA, interface with transmitters from Acromag that feeds data into a PLC from Beckhoff with SCADA system running on OPC server from Matrikon. Whew, still with us? That was a lot of names, components, and integrations. See the issue? If a facility wanted to look into changing out one of those parts of the process, there’s a huge amount of due diligence necessary to make sure that the technology stack isn’t interrupted. Similarly, multiple organizations get involved when setting up a new industrial complex or expanding an existing one. For example, a “turnkey” solution for an oil refinery requires:
- Multiple product vendors providing hardware
- System integrators who physically install the hardware
- Software companies creating SCADA and control software are required
All of that is typically installed anywhere between 3 months to 24 months depending on the size of the refinery. “Turnkey” doesn’t always mean quick. Infact, it’s usually the opposite. A few billion dollar industrial complex can have 10-40 third party companies that provide installation, software, automation systems maintenance, and other pieces of complex automation puzzle. System integrators and automation software developers further have built expertise on specific domains. A third party vendor focused on oil and gas cannot execute projects associated with automobile shop floors. This segregation of technology companies and service provides further add to automation market mix.
4.) Variations in data interaction
Every user interacts with industrial data differently. This becomes a bit of an issue when user interfaces changes so differently from application to application. A the visual data shown on-screen for condition monitoring data streams is very different from productivity monitoring system. Even though underlying backend, sensors, and data acquisition system may be the same, the user interface will vary.
5.) Additional layers introduced by IIoT
IIoT has introduced two additional layers into control and automation process: data analytics and business software integrations. Analytics has the ability to completely transform how facility managers operate and maintain industrial assets. Insights generated from advanced cloud based analytics tools are fed into business software tools from companies like SAP, Oracle, IBM, Microsoft as well as newer ones like Salesforce. This has led to the emergence of companies providing IIoT platforms that collect information from assets, process it and push that info into various business tools.
For all the benefits that these new technologies bring, they also amount to another layer of complexity for the consumer. Factories now need to ensure that the data that they’re capturing makes sense to the IIoT software that they are feeding it into, otherwise the data collected can lead to false assumptions and loss of efficiency and profit.
Where do we go from here?
Traditionally, consolidation of all of these complexities have been governed by giants like, GE, Siemens, ABB, Honeywell, Rockwell Automation, Schneider, Mitsubishi, Emerson, and Yokogawa. These organizations have purchased companies outright to gain access to markets and customers rather than simplify the process. However, this era of domination at the top end of the market is coming to an end.
At some point in next 5-7 years, the popularity of IIoT capabilities will force markets to slowly start converging towards unified standards for communication and data collection. Examples of this can be found as the consumer internet already communicates using a unified protocol such as RESTful API. IIoT systems have started adopting this for communication with the internet. Industrial field buses are already converging on Ethernet as standard physical layer. Since the industrial internet of things can enter the manufacturing build-out at multiple levels, facilities will be able to add the strength and flexibility of IoT wherever they need it. The giants won’t disappear though, because they are giant. We can expect to see companies like GE and Siemens to continue to acquire new software companies to stay competitive in the IIoT industry. The consolidation will be driven by acquisition for technology and smart manpower in areas of augmented reality, virtual reality, artificial intelligence, machine learning, and robotics.
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