As noted here in November, independent system integrators aren't the only source of system integration services for industrial automation projects. Several of the automation industry's leading equipment suppliers are getting into the system integration business as well. In fact, a recent study from ARC Advisory Group—“Automation Supplier Provided Services”—reports that the service sector is the fastest growing segment of the overall automation market, especially services provided by automation suppliers.
Users increasingly depend on suppliers who offer more value-added services—not only system integration per se, but services required during the operational phase of the plant, such as asset management, condition monitoring, loop tuning, performance management and overall maintenance outsourcing. Vendors who can provide automation throughout the lifecycle of a plant from design to demolition are becoming known as Main Automation Contractors (MACs).
The demand for MACs and vendor-supplied services is strong. The ARC study reports that the worldwide market approached $14 billion last year and is predicted to increase by more than $10 billion over the next five years, reaching $24.9 billion in 2011 for a compound annual growth rate of 12.3 percent. Mature markets such as North America and Europe, and the slower growth Middle East and Africa constitute the bulk of the market for automation services. However,revenue growth will be concentrated in the developing economies of China, the rest of Asia and Latin America.
One reason for this trend is that labor has become a global issue driving outsourcing and services growth, and suppliers are bringing vertical industry expertise to their service offerings. Additionally, the influx of less experienced workers into the world of automation and manufacturing is spurring extremely high growth in training segments, with automation suppliers and users stepping in to fill the need.
But even with increased training, manufacturers are finding it difficult to cover all of their service needs with in-house talent. “From the retiring wave of baby boomers in North America to the shortfall of qualified engineers in Asia and other parts of the world, the labor shortage is the primary factor behind growth in demand for services,” says Larry O'Brien, research director, process automation at ARC Advisory Group and the study's principal author.
The study says that ABB enjoys the greatest share of the automation service market worldwide with Siemens and Honeywell coming in next. Other key players include Rockwell Automation at No. 6 worldwide and No. 2 in North America. A Rockwell Automation representative recently told Control Engineering Magazine that its services business is “rapidly growing.”