Proving the Business Case for the Internet of Things

Automation services market to generate more than $24 billion in 2020: Frost & Sullivan

Iain Morris
August 21, 2014
The implementation of greenfield projects in the oil and gas industry, as well as expansion projects in chemicals, are spurring momentum in the global automation services market for process industries, according to new research from Frost & Sullivan.

The market-research company says the declining availability of a skilled workforce is encouraging the outsourcing of operation and maintenance services to automation companies, while competitive pressures are also compelling process industries to engage automation solution providers in order to realize operational improvements.

Frost & Sullivan reckons the automation services market generated revenues of $16.4 billion in 2013 and predicts the revenue figure will hit $24.29 billion in 2020.

Consulting services, project engineering and installation services are all expected to constitute automation opportunities over the forecast period when it comes to greenfield projects, while demand for maintenance, support and operational improvements will spur activity in the brownfield sector.

“The automation services market is primarily driven by engineering, procurement and construction firms, Tier 1 automation providers and system integrators,” saidNaveen Kumar Ramasamy, a senior analyst with Frost & Sullivan. “End users will accept automation solution providers, in particular, as reliable service partners in the long term as they seek more comprehensive single-window services.”

Despite this finding, Frost & Sullivan notes that system integrators have been able to move up the service value chain and become value-added resellers thanks to increasing strength and capabilities, and points out that demand for end-to-end lifecycle services from automation solution providers has taken a knock in price-sensitive emerging markets such as India, China, Brazil and Vietnam.

Meanwhile, the escalating number of cyber threats is curbing use of remote monitoring in some developed countries, says the market-research company.

“To address opportunities in a specific end-user vertical in a specific region, global automation market participants must concentrate on building service-based organization capabilities in the short-term and consolidate the resources in the ecosystem during the medium-term,” said Ramasamy. “They will reap the benefit of this sustained revenue stream during the long term of the forecast period, that is, in five to seven years.”
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