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Services are the fastest-growing part of automation

01 October, 2004

Services are the fastest-growing part of the automation market, and could soar in value from $9.2bn last year, to almost $15bn by 2008. This prediction is made in a new report* from the ARC Advisory Group which suggests that the global services business will grow at a compound annual rate of 9.1% over the period 2003-2008.

"The vast pools of engineering expertise that used to exist at major user companies have shrunk to critically low levels," ARC reports. "Many of the automation services that are required throughout the lifecycle of a plant or factory can no longer be performed."

For this reason, end-users are turning to their equipment suppliers to help them keep their plants running. For their part, the suppliers are looking to their service and software offerings to make up for losses they are suffering in the hardware business where the adoption of standard, off-the-shelf products has cut margins and eliminated most of the competitive advantage that they used to build into their hardware.

"More suppliers today are taking on the task of supervising entire automation implementation projects, acting as the main automation vendor or supplier that co-ordinates activities between the systems integrators, smaller suppliers, and the user," explains the report`s main author, ARC research director Larry O`Brien. "This simplifies things for the user because the main automation supplier provides a single point of responsibility for the success of the project."

Suppliers are also offering users an increasingly broad spectrum of after-market services. For example, many now provide "real-time performance management" products, and services to help users to obtain the best performance from their plants.

* Supplier-provided automation services worldwide outlook




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