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Industrial Ethernet switch (IES) and other industrial network edge infrastructure providers face numerous challenges in an increasingly dynamic marketplace. While growth in the IES market has descended below its previous double-digit annual rate, suppliers in this space face the need for continued strategic investment to meet emerging demands in areas such as Industrial Internet of Things (IIoT), Industrie 4.0 (I4.0), IT/OT convergence, incremental software capabilities, and industry-specific requirements as the market further diverges into distinct segments. At the same time, legacy industrial network infrastructure providers face the need to respond to traditional IT supplier Cisco’s ongoing inroads into the industrial space.
Cisco’s ascent is readily apparent in ARC’s just-released update on the IES marketplace. This latest analysis reveals both a narrowing of the distance between upper tier IES suppliers as well as Cisco’s rise to the number three market share position overall. Cisco’s larger growth rate in the recent past relative to legacy suppliers such as Belden (Hirschmann/GarretCom), Siemens (including RuggedCom), and Moxa is a function of continued expansion of its industrial offering, ongoing inroads in growth markets such as energy and transportation, its catbird seat at the intersection of IT and OT, and its ready access to the CIOs and IT organizations within target customers.
Cisco, a $48.7 billion (FY2016) developer and manufacturer of IP-based networking products and services, had total Ethernet switch revenues of $14.8 billion across all segments, including enterprise offerings. The company originally entered the industrial market with the Catalyst 2955 series switches that were essentially hardened extensions of its enterprise offering, but that line has been largely superseded in favor of the IE series industrial products. Their current IES offerings emphasize connectivity between IT and industrial automation environments by enabling advanced features and use of IT-based tools for management and security, along with the ability to operate in harsh environments. Ongoing additions to its line of IES offerings continue to extend the company’s reach beyond high-end managed switches and throughout the spectrum of device types and served markets.
From a market share perspective, the company now holds a commanding lead in the managed switch category and North American geographic region, as well as lead positions in industry segments such as aerospace & defense, food & beverage, intelligent transportation and water & wastewater. Note that these figures exclude any Cisco switches sold by partner Rockwell Automation, but the company’s relationships with Rockwell and other automation suppliers provide significant leverage in the IT/OT convergence arena.
Much has been written about the company’s intended migration toward microservices and other software-based revenue streams given increased hardware commoditization in the age of Industrial Internet and Software Defined Networking (SDN), among other market forces. Two recent pertinent non-hardware announcements include Industrial Network Director, a purpose-built, subscription-based Windows management tool for industrial networks, and Fog Director, which is designed to enable large-scale production deployments of IOx-enabled fog applications. Centralized network and device management systems are also among the most recent introductions by legacy industrial players.
Fog computing and unbundling of their IOx fog computing platform is central to Cisco’s IoT/IIoT strategy. Cisco’s alliance with IBM, and the ability to run the Watson IoT agent on Cisco’s IOx-based switches and routers, is one of the most prominent examples of fog computing to date. Cisco has also attracted industrial partners such as Mazak, and most recently Telit ILS, as a result of its recent unbundling of the IOx platform. The company is also active in industry activities such as the Industrial Internet Consortium, AVNU Alliance, ODVA, and Industrial IP Advantage.
Legacy IES suppliers and other providers at the network edge recognize increasing competition from Cisco and other legacy IT suppliers as they continue to encroach upon the OT/automation space. At the same time, industrial network infrastructure suppliers must respond to new market demands in areas such as the need for standalone software capabilities, application-specific standards and requirements, emerging hardware (TSN) and software (SDN) developments, and the need to deliver the connectivity enablers behind Industrial Internet-driven business improvement strategies. These and other characteristics of today’s industrial network edge marketplace will be covered in future blogs in this space.
Material for this blog was drawn from ARC’s just-released Industrial Ethernet Switches Global Market Research Study. Further information is available at: www.arcweb.com/market-studies/industrial-ethernet-switches
Cisco’s ascent is readily apparent in ARC’s just-released update on the IES marketplace. This latest analysis reveals both a narrowing of the distance between upper tier IES suppliers as well as Cisco’s rise to the number three market share position overall. Cisco’s larger growth rate in the recent past relative to legacy suppliers such as Belden (Hirschmann/GarretCom), Siemens (including RuggedCom), and Moxa is a function of continued expansion of its industrial offering, ongoing inroads in growth markets such as energy and transportation, its catbird seat at the intersection of IT and OT, and its ready access to the CIOs and IT organizations within target customers.
Cisco, a $48.7 billion (FY2016) developer and manufacturer of IP-based networking products and services, had total Ethernet switch revenues of $14.8 billion across all segments, including enterprise offerings. The company originally entered the industrial market with the Catalyst 2955 series switches that were essentially hardened extensions of its enterprise offering, but that line has been largely superseded in favor of the IE series industrial products. Their current IES offerings emphasize connectivity between IT and industrial automation environments by enabling advanced features and use of IT-based tools for management and security, along with the ability to operate in harsh environments. Ongoing additions to its line of IES offerings continue to extend the company’s reach beyond high-end managed switches and throughout the spectrum of device types and served markets.
From a market share perspective, the company now holds a commanding lead in the managed switch category and North American geographic region, as well as lead positions in industry segments such as aerospace & defense, food & beverage, intelligent transportation and water & wastewater. Note that these figures exclude any Cisco switches sold by partner Rockwell Automation, but the company’s relationships with Rockwell and other automation suppliers provide significant leverage in the IT/OT convergence arena.
Much has been written about the company’s intended migration toward microservices and other software-based revenue streams given increased hardware commoditization in the age of Industrial Internet and Software Defined Networking (SDN), among other market forces. Two recent pertinent non-hardware announcements include Industrial Network Director, a purpose-built, subscription-based Windows management tool for industrial networks, and Fog Director, which is designed to enable large-scale production deployments of IOx-enabled fog applications. Centralized network and device management systems are also among the most recent introductions by legacy industrial players.
Fog computing and unbundling of their IOx fog computing platform is central to Cisco’s IoT/IIoT strategy. Cisco’s alliance with IBM, and the ability to run the Watson IoT agent on Cisco’s IOx-based switches and routers, is one of the most prominent examples of fog computing to date. Cisco has also attracted industrial partners such as Mazak, and most recently Telit ILS, as a result of its recent unbundling of the IOx platform. The company is also active in industry activities such as the Industrial Internet Consortium, AVNU Alliance, ODVA, and Industrial IP Advantage.
Legacy IES suppliers and other providers at the network edge recognize increasing competition from Cisco and other legacy IT suppliers as they continue to encroach upon the OT/automation space. At the same time, industrial network infrastructure suppliers must respond to new market demands in areas such as the need for standalone software capabilities, application-specific standards and requirements, emerging hardware (TSN) and software (SDN) developments, and the need to deliver the connectivity enablers behind Industrial Internet-driven business improvement strategies. These and other characteristics of today’s industrial network edge marketplace will be covered in future blogs in this space.
Material for this blog was drawn from ARC’s just-released Industrial Ethernet Switches Global Market Research Study. Further information is available at: www.arcweb.com/market-studies/industrial-ethernet-switches