Integrating Nearly Everything
While the market for Programmable Logic Controllers (PLCs) and PLC-based Process Automation Controllers (PACs) is mature, it continues to re-invent itself.
The overall market development has followed past trends, but there are selected regional and vertical markets that are growing at above average speed. Regional development is closely linked to overall economic performance. Growth in vertical markets also depends on technological development; while some verticals are mature, increasing performance also enable the PLC based PACs to enter more applications in the process industries.
Over the last few years, integrated safety has become a key differentiator and is among the most important issue for PLCs. In the future, we see even more functions being integrated into PLC platforms. Integration makes life easier for end users as well as OEMs and is a significant competitive advantage.
A clear trend is to integrate cyber security directly into the PLC platform. In the future, energy management functionality will also be integrated. This makes the PLC a platform for basically everything below the CPM layer.
While new features offer differentiation, we expect competition to increase. During the past crisis new entrants from emerging markets have gained market shares in developed economies, as price sensitivity increased. In addition, many companies enlarged their drives- or motion control-focused automation offering by adding PLCs. This creates pressure on established players to integrate even more.
The PLC is here to stay, but PLC hardware is changing and evolving. Classical tasks of a PLC are close to commodity functions, the technology is mature, and differentiation with pure hardware is barely possible in areas like cycle time, processing power, and other traditional measures. In ARC’s view, success strategies include:
- Provide add-on value next to pure hardware specs
- Identify the end user and deliver the right value for each industry
- Integrate everything and push the PAC concepts to new horizons
- Soft factors and other issues such as ease of doing business get more important
- Optimize your own supply chain to generate a more constant revenue stream
- Clear positioning