ARC Sees Industrial Ethernet Devices Worldwide Market Growing 51.4% Annually.

DEDHAM, Mass. -- The worldwide market for Industrial Ethernet Devices is expected to grow at a Compounded Annual Growth Rate (CAGR) of 51.4 percent over the next five years. The market totaled 840 thousand units in 2004 and is forecasted to total just over 6.7 million units in 2009, according to ARC Advisory Group's new "Industrial Ethernet Devices Market Outlook Study". This market study includes revenue for Industrial Ethernet Switches which had worldwide sales of $124.4 million in 2004 and is expected to grow to $939.8 million in 2009 for a CAGR of 49.9%.

This new study is expanded to include both Ethernet Devices and a "deep dive" into Industrial Switches. Compared to other ARC studies, it is really two reports rolled into one. An added chapter includes survey findings from end users experienced with industrial Ethernet. Fifty four (54) profiles are provided covering suppliers of devices, switches and embedded systems, and industrial networking organizations.

Ethernet provides users an industrial network that has a lower total cost of ownership with improved adaptability for their changing business needs. This, combined with widespread availability and market familiarity, continues to drive Ethernet's use in industrial automation applications for a broad range of industries.

"Ethernet technology is rapidly penetrating the device level of the automation hierarchy. This provides one of those rare opportunities where a new technology can upset the supplier landscape," according to Research Director Ralph Rio ([e-mail]), principal author. Rio continued, "Those suppliers who pay close attention to the market dynamics will benefit."

Ethernet Devices Supported by a Vast Infrastructure

The aggregate market for industrial Ethernet devices has grown substantially during the last few years in spite of a difficult market for automation equipment in most areas. The use of commercial-off-the-shelf (COTS) technologies makes the application of Ethernet to industrial networking significantly easier for pilot projects, system extensions, application development, and new automation systems. Devices and systems that support Ethernet and the Internet Protocol suite leverage the vast IT infrastructure. This includes a variety of products including switches, firewalls, network management tools, development tools, and messaging standards.

Industrial Switches and Environmental Protection

While some may start with a cheap office grade switch purchased at a local retail computer outlet, they soon learn the importance of reliability in an industrial environment. One trip to the plant manager's office to explain why a $30 home office switch brought down production becomes a hard lesson. Protection for a factory environment includes heat, vibration, power line noise, dust, and other factors. Currently, nearly all industrial Ethernet switches are rated IP20 to IP40. ARC forecasts an increase in the need for IP67 to IP68 as industrial networking expands deeper into process control applications for those industries where liquids are present.

User Survey Clarifies Who Buys What

Industrial Ethernet brings together a complex mix of participants. Plant Engineering, IT, and independent Systems Integrators become involved. The user survey helps clarify who is key in the design, purchase, installation and maintenance of an industrial network. User preferences for Industrial Ethernet have a few surprises. The ARC user survey shows that price, while a consideration, has not proven to be a key differentiator.

The report is specifically prepared to provide strategic information to industry executives responsible for planning, marketing, purchasing, and developing their company's plant automation business.

Additional information on this study can be found at: www.arcweb.com/res/Ethernet.

Note to Editors: This document can be used with attribution to ARC Advisory Group. For a graphic titled "Industrial Ethernet Device Shipments in thousands of units" please contact mailto:[e-mail] .

About ARC: Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. No matter how complex your business issues, our analysts have the expert industry knowledge and first-hand experience to help you find the best answer. We focus on simple yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax [phone], E-mail [e-mail], Web www.ARCweb.com.