Ethernet drives industrial network growth

VDC Research reports that the worldwide market for industrial infrastructure wireline networking products exceeded $1.8 billion in 2007, and forecasts it will increase at a compound annual growth rate of 24.6% through 2012.


Natick, MA – In its newly released “Supply Side Analysis Reports,” part of its annual “Industrial Networking Global Market Intelligence Service,” VDC Research reports that the worldwide market for industrial infrastructure wireline networking products exceeded $1.8 billion in2007, and forecasts it will increase at a compound annual growth rate (CAGR) of 24.6% through 2012, reaching over $5.6 billion.   
Wireline networking products covered in the VDC reports include:

  • Industrial-grade Interconnect Products– Connectors, cables & cord sets, and distribution boxes.

  • Networking Components– Bridges, console servers, device servers, fiber optic transceivers, gateways (protocol converters), hubs, modems, multiplexers, routers, switches.

  • Network Management Software– Sold separately, most of this software is bundled with hardware shipments.

    <table ID = 'id4521386-6-table' CELLSPACING = '1' CELLPADDING = '1' CLASS = 'right' WIDTH = '200' BORDER = '1'><tbody ID = 'id4521397-6-tbody'><tr ID = 'id4521400-6-tr'><td ID = 'id4521402-6-td'>
    </td></tr><tr ID = 'id4521416-9-tr'><td ID = 'id4521418-9-td'> Current and forecast worldwide shipments of wireline industrial networking infrastructure products, overall and with Ethernet connectivity ($ in millions). Source: VDC. </td></tr></tbody></table>

Shipments of these exceeded $1.2 billion in 2007, and VDC forecasts shipments will increase at a 28.5% CAGR to over $4.5 billion in 2012. The Ethernet share, which was approximately 69% in 2007, is expected to exceed 80% in 2012.
According to VDC, familiarity with Ethernet by IT managers and process control engineers has encouraged increasing numbers of suppliers to develop products with Ethernet connectivity. In addition, increasing competition has led to decreasing prices of Ethernet products, thus encouraging users to consider Ethernet as their wireline networking infrastructure solution for industrial facilities.
The VDC “Supply Side Analysis Report” states that Ethernet-based networks offer several advantages over traditional industrial open standards and proprietary buses/networks, including:

  • Commercial-grade products– Hardened and ruggedized infrastructure products are not needed for all environments in industrial facilities. The availability of Ethernet commercial-grade products allows users installation flexibility, at much more attractive prices.

  • Company-wide uniformity– Ethernet is commonly used in the office and also the plant floor – saving on infrastructure, training, support and other costs associated with supporting multiple network protocols. 

  • Easy integration with Internet/Intranets– Ethernet’s TCP/IP and other protocols extend control and monitoring capabilities to remote locations without the use of gateways.

  • High-Speed and wide bandwidth– Ethernet is available in 10 Mbps, 100 Mbps, and 1 Gbps data rates; Ethernet networks can be implemented at the appropriate bandwidth to enable quick response times and/or transfer of large files.

  • Lower cost connectivity– As shipments of networking products with Ethernet connectivity increase, the cost of the connecting devices and cabling for these is decreasing.  Even when using industrial-grade connectors and cables, the cost for these using Ethernet is less than that of other open standard and proprietary buses/networks.

While Ethernet gains market share, the VDC report claims this is not a strict displacement of the protocols of other wireline buses/networks, as most of the major industrial bus/network organizations have introduced versions of their application layer protocols for Ethernet networks.
VDC expects the industrial networking infrastructure market for Ethernet products is expected to sustain a substantial growth rate over the next four years. However, there is growing competition from wireless networks, which will become more substantial over a longer time period.
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