These slides are from a webcast presented by Chris Rezendes, Executive Vice President at VDC Research on 03/18/10. During this webcast we address how industrial operators’ experiences from the latest recession are shaping the industrial markets' investment in visibility, connectivity, agility and profitability for 2010-2012. A full audio recording is available for download at: http://www.vdcresearch.com/market_research/industrial_automation/freeresearch.aspx

1. VDC Research Webcast
INDUSTRIAL NETWORK MARKETS
March 2010 User Requirements Update
Chris Rezendes
Executive Vice President

2. Recording Available
These slides are from a webcast presented on 03/18/10
A f ll audio recording is available for download at:
full di di i il bl f d l d t
http://www.vdcresearch.com/market_research/industrial_automation/freeresearch.aspx
1 –  2010 VDC Research Group, Inc.

3. VDC Research Group
Complimentary Insights & Marketing Data on the
Industrial Automation & Control Markets Available at:
www.vdcresearch.com
2 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

4. Today’s Speaker
• VDC Research Group
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 Founded in 1971, continuous, profitable operation for nearly 40 years.
 Focus on a number of embedded and niche network market segments.
 1,000 clients annually …90% technology suppliers, tech investors.
• Ch i Rezendes – E
Chris R d Executive Vi P id t
ti Vice President
 19 years experience in embedded, industrial, defense and other mission
critical and high available technology industries.
 14 years experience in senior management and leadership p
y p g p positions at a
number of technology solutions and professional services organizations.
 2 years DARPA contracting.
 Chris has advised many of the largest and most respected technology
companies in a number of technology segments worldwide
worldwide.
 Chris is a graduate of Harvard University.
3 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

5. The recession is changing the timing and scope of
industrial networking solution deployment
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What impact is the recession having on your industrial networking
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evaluation and deployment plans?
4 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

6. Most current evaluators and operators of industrial
networks are expecting to maintain, or increase investment
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What is your firm’s spending plans for industrial network
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solutions for 2010 and 2011?
5 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

7. Nearly half of survey respondents are
committed to industrial networking solutions
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What is your current p
y position with respect to industrial network solutions
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operation, evaluation and investment for factory floor applications?
6 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

8. Wireless evaluation penetration is more than 82%;
wireline nearly 97%
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Which network connection method are you investigating?
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7 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

9. While standards evaluation is rising, proprietary evaluation
remains a material part of the market
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Which specific wireless network protocols / standards are you
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evaluating for your next investment / deployment?
8 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

10. Massive growth in Ethernet, and persistent support for
control environment ‘standards’ will drive hybrid installs
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Which specific wireline network protocols / standards are
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you evaluating for your next investment / deployment?
9 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

11. While the market is shifting toward Ethernet, nearly
27% surveyed see no reduction in reliance on proprietary
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How will your firm’s reliance on these different network
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protocols change during the next 2 years?
10 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

12. Progress is being made – perhaps slowly – in discrete
control and enterprise integration applications
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What is the status of networking key applications?
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11 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

13. Networking across various levels of control architectures
is growing, with sensors at nearly 61% of respondents
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Which nodes are currently networked, or under evaluation
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for industrial networking integration?
12 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

14. Industrial network investment turns on secure,
reliable access to real time information
What are the primary operational drivers for your investigation
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of and investment in industrial network solutions?
13 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

15. Real and perceived issues share top billing
in the list of barriers to adoption
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What are the primary barriers to y
p y your operation deploying industrial
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networking solutions during the next 2 years?
14 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

16. Customer appear split on the issue of services, but
those who need it, need integration support
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What types of support requirements are most important for your firm
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as you consider investment in industrial network solutions?
15 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

17. Value-adding channel position remains small, with ISI and
ISV combined cited by less than 38% of respondents
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What are your primary sources for your industrial networking
solutions investments?
16 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

18. Summary Observations & Pressing Questions
• How can this demand be mapped along market segment
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dimensions? Regional markets? Verticals? Applications?
Account types and tiers?
• What are the primary technical product/ solution selection
criteria? And how do they influence the tension between
industrial and commercial grade offerings?
• What are the primary commercial vendor/ supplier selection
criteria? And how are they shaping the co-existence of
industrial and commercial suppliers in these markets?
• What do price and margin trends look like?
• Given customers’ current requirements, preferences and
practices, where are they most likely to go for information?
Purchasing? Support?
P h i ? S t?
17 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

19. How will VDC coverage help clients stay on top of the market?
Industrial Networking Infrastructure Products:
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2010 - 2014 Market Requirements & Opportunity Analysis
• TRACK 1: User Requirements & Channel Analysis
 Volume 1: Global Wireless Industrial Networking Products
 Volume 2: Global Wireline Industrial Networking Products
• TRACK 2: Competitive Analysis
 Volume 1: Global Wireless Industrial Networking Products
 V l
Volume 2 Gl b l Wi li I d t i l N t
2: Global Wireline Industrial Networking P d t
ki Products
STUDY PUBLICATION DATE ACTUAL MARKET SIZE/SUPPLIER SHARE FORECAST MARKET SIZE
Service Year 2010 2009 2010-2014
18 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice

20. Q&A Session
Thank You for Attending this VDC Webcast
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For more information about VDC Research coverage of the global markets
for industrial networking solutions – including the 2010 Industrial Networking
Infrastructure Solutions Market Intelligence Service, or the recently published
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Connected Factory Market Opportunities & Requirements study, please contact:
Christopher Rezendes – Executive Vice President
cjr@vdcresearch.com | 508.653.9000 x120
Tim Shea – Senior Account Executive
tims@vdcresearch.com | 508.653.9000 x146
19 –  2010 VDC Research Group, Inc.
Industrial Automation & Control Practice