Networks, Acquisitions Lead 2011 Automation Prognostications

Jan. 11, 2011
Humans have always desired to know the future.
Ever heard of the Delphic Oracle, for example? If I could peer accurately into the future, this job would just be a hobby. I can't, but there are perceivable trends that provide some clues to the industry direction.We conducted two surveys preparing for this month's look at innovation in automation and manufacturing. I reached out to the chief technologists at companies who search out the latest technologies and develop the products you all use to improve your manufacturing and production operations (see Sourcing Tomorrow's Automation Innovations). We also surveyed you, the readers of Automation World. Contributing Editor James Koelsch's report of your comments can be seen here.In the spirit of the season, here are some "Gary's Prognostications" based on these surveys and other reading and conversations. Technology trends to watch include networking, virtualization, mobility, manufacturing intelligence and analytics, and visualization. Look for workflow applications with business processes. An industry trend is consolidation through acquisition.If networking is not in your skill set, then it's time to learn more about it. Ethernet is huge. This technology has pretty thoroughly infiltrated industrial automation. Wireless networking is still growing slowly. Look for it to continue to grow and diversify. Wireless sensor networks will continue to grow, but look for it to be WirelessHart for process applications and ZigBee for building. I don't expect to see much from the ISA100 effort for quite some time. That committee seems to be buried in politics and procedural issues. Not to mention trying to develop a technology and a standard simultaneously.On the software side, look for increasing power of computers and software to improve analytics. The nirvana of turning data into actionable information for better business decisions is near. Look for more power to be available this year. Look also for greater adoption of "Software as a Service"—also known as cloud computing, or hosted applications—to increase. Information technology managers are growing more comfortable with the technology as security is proven. Price and flexibility are the drivers here.Major automation suppliers will continue to acquire smaller companies in 2011 as they strive to fill out portfolios and strengthen their presence in key industrial segments. ABB and GE, among others, are investing in energy technologies. Honeywell Process Solutions, Invensys Operations Management, Rockwell Automation and Siemens are all on the acquisition hunt.AcquisitionsWhile we're talking about acquisitions, I love debating the future with Jim Pinto (see Pinto's Prognostications 2011). Jim has a belief that companies reach a certain size and then must be acquired, because they cannot grow fast enough. He got this idea from the Greiner Curve (www.mindtools.com/pages/article/newLDR_87.htm) and a subsequent article in the Harvard Business Review. I don't have space to analyze the entire curve here, but I have a couple of observations to respond to his view that Invensys Operations Management (IOM) and Rockwell Automation are in that size that requires their acquisition.The Greiner Curve identifies six phases with crises precipitating transitions from phase to phase. The last phase, the one Pinto identifies with revenues, states, "Growth may continue through merger, outsourcing, networks and other solutions involving other companies." I've interviewed many people and observed actions. I think Rockwell is actually doing most of those (except the merger idea, but they won't tell me that ahead of time). I think the future of IOM depends upon factors outside its management—namely what happens at the corporate level.While I think it is possible for large companies to innovate, excitement and growth in an industry comes from entrepreneurs with new ideas and energy. Where will this come from this year? Will it be you?

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