Global Operational Technology Market is segmented By Component (Human Machine Interface, Control System), By Network Technology(Wired, Wireless), By End-User(Oil & Gas, Food & Beverages, Pharmaceuticals, Chemicals, Energy & Power, Metals & Mining, Pulp & Paper, Automotive, Aerospace & Defense, Semiconductor & Electronics, Medical Devices, Machine Manufacturing, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031
Operational Technology Market Size
The global operational technology market size is growing at a high CAGR during the forecast period (2024-2031).
Operational Technology Market Scope
|
Metrics |
Details |
|
Market CAGR |
High |
|
Segments Covered |
By Component, By Network Technology, By End-User, and By Region |
|
Report Insights Covered |
Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, and Other key insights. |
|
Fastest Growing Region |
Asia Pacific |
|
Largest Market Share |
North America |
To Know More: Download Sample
Operational Technology (OT) is technology and software that detects or induces changes in industrial equipment, assets, processes, and events through direct monitoring and control. Operational technology refers to systems that process operational data (including electronic, telecommunications, computer systems, and technical components). OT systems may be required to control valves, engines, conveyors, and other machinery to regulate and monitor various process parameters such as pressure, temperature, and flow.
OT systems employ various technologies unfamiliar to IT for hardware design and communications protocols. Supporting outdated systems and devices, as well as multiple vendor architectures and standards, are common issues. Operational technology systems must be available since they monitor crucial industrial processes.
Operational Technology Market Dynamics
The demand for operational technology is mainly driven by the increasing economic growth and industrialization in developing countries. It is the most important driver for the market. The high costs involved in the installation and maintenance of operational technologies are key factors in limiting the growth of this market.
Increasing economic growth and industrialization in developing countries
Due to cheaper labor costs and real estate prices, companies from industrialized economies are eager to expand their operations in emerging economies. Furthermore, growing industrialization in rising economies such as India, Japan, Africa, Brazil, Mexico, and Indonesia has resulted in large infrastructure expenditures, luring global firms to set up manufacturing operations.
Global corporations typically use foreign direct investment (FDI) to establish new manufacturing operations in emerging economies. Low manufacturing costs and low-cost labor are the most critical factors driving the transformation of developing economies into major industrial centers. However, because these economies rely heavily on labor or a manual workforce for manufacturing, the risks of errors and accidents are significant. The use of modern operational technologies helps to mitigate these risks. Multinational companies can set up greenfield units with the latest operational technologies.
Furthermore, these advances have created a demand for innovative and complex warehouse facilities to integrate and manage supply chains. The spike in investments in emerging economies to improve supply chain competence has created new growth prospects for operational technologies. Various systems, including WMS and MES, have made inroads into various industries in emerging markets. Developing countries' rapid economic growth and industrialization are key factors driving global operational technology market growth.
High costs involved in installation and maintenance
Establishing modern automated manufacturing plants requires deploying the latest automation technologies such as SCADA, DCS, PAM, and HMI. Data collection and analysis with these technologies help reduce errors in operations which improves the quality of products and the efficiency of manufacturing plants. Setting up a modern manufacturing plant requires large capital investments for software, equipment, and labor training. It is difficult for new entrants who set up their first plant to invest a large sum. Before implementing industrial automation systems and solutions, new companies must analyze their investment returns.
Moreover, it is not feasible for companies to replace their existing legacy systems due to the high costs of new systems and the lack of interoperability with legacy systems. Legacy systems rely on proprietary protocols for communication, making it difficult to integrate them into systems based on new technologies. Companies also incur high costs in upgrading their existing systems. The automation software used in industries requires continuous maintenance and upgrades. Therefore, the costs of installing and maintaining operational technologies relegate them to major conglomerates and prevent wider adoption. It is a key challenge for the growth of the global operational technology market.
COVID-19 Impact on Operational Technology Market Growth
The global operational technology market experienced a decline in 2020 due to the COVID-19 pandemic. The COVID-19 epidemic started in the early months of 2020 and caused massive economic shocks globally. Manufacturing activities were affected due to lockdowns and movement restrictions put in place by governments to curb the spread of the pandemic. It has affected the production of robots and robotic components.
The operational technology sector is a highly advanced field where growth is derived from value creation through innovation by researching, developing, and releasing new products. The pandemic's lockdowns and movement restrictions affected field testing and prototyping of new technologies.
Various end-users, including many manufacturing industries, had to scale down or suspend production due to reduced demand or lockdown restrictions. It led to a reduction in demand for operational technologies, which impacted the revenue of many leading companies operating in the sector. The demand for operational technologies is not expected to fully recover before the end of 2021.
The COVID-19 pandemic has posed numerous challenges for the global operational technology market in the short term. However, due to the rapidly growing adoption of automation, robotics, and technological innovation across various industries, new opportunities have opened up for the operational technology market in the long term. The market will continue to grow significantly in the coming years.
Operational Technology Market Segmentation Analysis
The global operational technology market is segmented into components, network technology, end-user, and regions. The active technology market is segmented into human-machine interface and control systems based on components. Control system is leading within this segmentation since it is the most widely adopted component for operational technology. Control systems allow for fine-tuning of various operating parameters to achieve maximum efficiency. Control systems also allow for easy integration with existing hardware.
Operational Technology Market Geographical Shares
Asia-Pacific is leading in the global operational technology market. The region accounts for the largest market share globally, primarily due to the rapid industrialization and strong economic growth of major emerging economies such as China, India, Vietnam, Indonesia, Malaysia, and Thailand.
The rising demand for smart tools due to increased automation in industries; growing adoption of technologies such as Industry 4.0, smart factories, IoT, and IIoT; and the increasing need to optimize productivity and reduce operational and maintenance costs are the major factors driving the growth of the operational technology market in the Asia-Pacific region.
Various governmental initiatives such as China's Made in China 2025, Japan's Industrial Value Chain Initiative (IVI), South Korea's The Manufacturing Innovation Strategy 3.0 (Strategy 3.0), and India's Samarth Udyog Bharat 4.0 are expected to play a significant role in industrial advancement and, as a result, provide growth opportunities for the operational technology market. The Asia-Pacific region is expected to maintain a leading position in the operational technology market in the coming years.
Operational Technology Companies and Competitive Landscape
The global operational technology market is competitive due to various operational technologies and solutions that cater to different types of industrial and commercial requirements. Some of the major players contributing to the growth in the segment are Siemens, ABB, Honeywell International Inc., General Electric, Schneider Electric, Rockwell Automation, Inc., Emerson Electric Co., Fuji Electric Co., Ltd., Yokogawa Electric Corporation and Mitsubishi Electric Corporation. The major players in the operational technology market adopt several growth strategies such as joint ventures, the launch of new products, and collaborations, along with mergers and acquisitions, thereby contributing to global growth in the industry.
Siemens
Overview: Siemens is an engineering conglomerate that designs and implements power and energy solutions. The company develops and builds fossil fuel power plants and power-generating components and offers gas turbines, steam turbines, generators, gas turbines, steam turbines, compressors, fans, instrumentation and controls, electrical systems, wind turbines, fuel cells, fuel gasifiers, turbochargers, and environmental systems.
The company serves power, oil, and gas, air separation, building complexes, ceramics, chemicals, food and beverage, manufacturing, marine, metals, pulp and paper, textiles, and sugar industries. The company operates in various locations globally, such as Canada, Mexico, the United States, Brazil, Saudi Arabia, China, and other countries. Siemens was founded by German engineer Werner von Siemens in 1847 and is headquartered in Munich, Germany.
Product Portfolio
- SIMATIC is the company's range of central processing unit (CPU) based control systems for industrial operations. SIMATIC features closed-loop PID control and can be integrated with artificial intelligence (AI) and machine learning (ML) technologies. The SIMATIC technology is scalable for the automation of complex industrial tasks.
Key Developments:
- In 2021, Siemens started implementing a single-point access and user management control system on its latest version of SIMATIC CPUs. The step was undertaken to simplify operational procedures and increase user-friendliness.
