Cloud transformation of the global and Russian PLC/ACS/MES markets
Analytical Report (full version)
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Analytical Report (full version)
Cloud transformation of the global and Russian PLC/ACS/MES markets
The global market for ACS/MES and PLCs reached $ 92 billion in 2021, the Russian market accounted for only 0.7% of this amount.
On January 8th, 2022, J'son & Partners Consulting completed a study of the Russian and global ACS/MES and PLC markets and evaluated both "traditional" and cloud components of these markets. The global market volume amounted to $85 billion in 2020 and in 2021, according to preliminary estimates, it grew by 8%, to $ 92 billion. It is expected that in the period 2022–2025, the market will grow faster – by 13% CAGR, due to the accelerated growth of consumption of cloud SCADA applications.
The volume of the Russian market, according to preliminary estimates, amounted to $ 541 million in 2021 (an increase of 8% compared to 2020). Under the positive scenario, it is expected that in the period 2022–2025, the Russian market will grow with a CAGR of 12% in currency terms, that is, at the same rate as the global market.
The global market as a whole shows relatively weak dynamics, since it is formed by two fundamentally different segments: the large but stagnant "traditional" segment and the small but fast-growing cloud segment – Fig. 1.
Thus, the global market for automated process control systems, MES and PLC is undergoing a cloud transformation and the innovations associated with this transformation are aimed at radically expanding the functionality and increasing the role of industrial automation systems, including:
• Introduction of self-learning, that is, we are talking about the transition from working on fixed algorithms to working on algorithms which are modified based on the analysis of accumulated historical data and the use of mathematical models;
• Transition to autonomy (from human participation) in decision-making, when each piece of equipment is able to act as an independent agent, provided there is arbitration (orchestration) between agents.
This will lead to a change in the architecture of the automated control systems and its position in the "pyramid" of control systems – instead of a hierarchical architecture with a clear distribution of functions by levels, low information exchange rates between levels and their hardware-dependent implementation, we will see a flat architecture with functional distribution, intensive information exchange between functional elements and mainly hardware-independent implementation of them, with the exception of hard real-time control functions (Fig. 2).
This hardware-independent functionality will be implemented as part of ecosystems of IIoT platforms and applications, along with top-level functionality – automation of production planning, dispatching and business processes (Fig. 2 top right). This applies both to the existing functionality of graphical display of production data received from the "field segment" and the functionality of deterministic planning of production processes, and, of course, to the functionality of digital doubles, modeling and stochastic planning demanded by digitalization.
That is, IIoT is not an additional segment of the traditional SCADA/MES market, but a new market replacing the existing one, and at the same time covering new functional areas that are generally absent in traditional SCADA/MES. Therefore, the market for IIoT platforms and applications will grow both by adding new functionality and by absorbing the existing SCADA/MES market in terms of data display functions (HMI) and deterministic planning.
Multiplicity of management hierarchy levels, weak information exchange between them.
The role of information management systems is information support for manually executed processes.
On-premise deployment model, static algorithms
Finance, production planning, procurement, sales, marketing, personnel, R & D
Manufacturing dispatch management
Automated process control
The role of information management systems is direct execution of processes
Cloud deployment model, modification of control algorithms based on big data analysis using artificial intelligence technologies
Development of end-to-end processes and control
Finance, procurement, sales, marketing, personnel, R & D, production planning
Financial management aaS
Procurement management aaS
Sales management aaS
Marketing management aaS
Staff management aaS
Project management aaS
Production planning management aaS
Dispatch management aaS
Automated control systems aaS
Programmatically configurable “smart” infrastructure
In this regard, it is important to note that at the initial stage of the development of "cloud" automation, in the period 2021–2025, the most promising segment will be not industrial automation, that is, automation of means of production, but a new segment of automation of the operation of industrial end-use products.
This new segment is already much larger than the first one in terms of PLC consumption, but it often does not have a "superstructure" in the form of an automated control system, that is, the market is open to new players, and the main areas of application are automobile transport and automation of engineering systems of buildings. The transition to a higher manufacturing process automation level at end-use facilities, in particular, higher rates of the use of autonomous cars, will literally blow up this market, which is already quite large in terms of PLC consumption.
Nevertheless, the penetration of IIoT into the means of production is also very active, but somewhat differently, and has a pronounced phasing. At the first stage, which is currently taking place, the implementation of IIoT is limited to the creation of an analytical "add-on" over existing automated control systems, which allows you to implement the functionality of optimization planning, but not autonomous management, that is, it covers only the stages of planning and execution control. This already allows you to get a noticeable and sustainable economic effect, and practically without capital costs. The corresponding software tools are already offered by leading vendors of automated control systems in the form of commercial products in partnership with developers/providers of IIoT platforms, including the SaaS model, and are actively used by the manufacturing industry. The second stage, the implementation of which is expected in the period 2025–2035, that is, beyond the forecasting horizon considered in this study, autonomous management of means of production will be implemented, which will fully automate the management cycle and get the maximum economic effect from the introduction of automation tools.
Thus, the new automated process control system/PLC/MES market should be understood as:
• applications that implement the functions of self-learning automated control systems/MES;
• a virtualized network and computing infrastructure for their execution together with the applications themselves forming a virtual instance of the function that can scale and move "on demand";
• service functions, primarily security functions necessary to ensure SLA;
• hardware PLCs – unlike the traditional market, the constantly modified software part should be separated here, it is no longer part of a single hardware and software complex;
• sensors and actuators – some growth is possible here, as new sensors are added that are necessary for filling digital doubles and modeling (for example, sensors of electric motor speed, vibration, temperature, etc.) and additional actuators, for example, autopilots in transport and CNC in mechanical engineering, as well as new connected objects – objects of final consumption.
At the same time, all components, including hardware, will be provided according to the "as a service" (aaS) model.
According to the forecast provided by J'son & Partners Consulting, it is expected that the global automated control system/MES/PLC market in the period 2022–2025 will grow with a CAGR of 13% and in 2025 will reach $ 173 billion, and the main increase in consumption will be the cloud model of providing functions of ACUP/SCADA and MES – see Figure 3. The only declining segment will be the consumption of perpetual licenses. This outdated model of automated control system/MES software monetization will be replaced by new monetization models, such as payment based on the actual volume of use of the functionality (consumption-based) and the most complex and promising payment model based on the final economic result obtained from the use of this functionality (outcome-based). The main SCADA/MES deployment model will be a hybrid cloud model. The largest volume of consumption of cloud SCADA/MES will fall on the industrial end-use manufacturing process automation.
According to J'son & Partners Consulting estimates, in 2020 the Russian market for automated process control systems (APCS or ACS) and manufacturing execution systems (MES) grew by 17% compared to 2019 and reached $ 501 million, which is 0.7% of global consumption of all types of automated process control systems, while Russia's share of automated process control systems used in industry and electric power industry is 1.7%. According to preliminary estimates, the market grew by 8% to $541 million in 2022. The high dynamics of 2020 is not typical for the Russian market and in order to understand the basic level of growth of the automated control system market, it is necessary to focus on the dynamics of 2021 and on the CAGR of 2018–2020, which is 8%.
According to the positive forecast by J'son & Partners Consulting, it is expected that in 2025 the market volume will amount to $ 926 million, the CAGR in the period 2018–2025 will be almost equal to the world high level for a mature market of 12% (Fig. 4).
The positive forecast is based on the assumption that the main driver of growth will be the rapid growth of penetration of cloud IIoT platforms and applications, the contribution of which will consist both directly in the growth of consumption of cloud IIoT services, and in additional consumption of PLC, the driver for which is the growth of penetration of cloud IIoT platforms. The shrinking segment in the positive forecast will be the hardware-dependent software segment replaced by the cloud, ASUP, monetized according to the "traditional" model of selling perpetual licenses.
As in the global market, in Russia, a full-scale digitalization of major branches of the real sector of the economy can become a key driver of quantitative growth and qualitative development of the MES, automated control systems and PLC market. If such an optimistic scenario is realized, the volume of consumption of new-generation automated control systems and MES generated by digitalization may four times exceed the volume of the existing automated control systems and MES market in Russia, and reach $1.9 billion. approximately in 2030. But if the scenario of full-scale digitalization is not implemented, the Russian market of automated control systems and MES in the period 2022–2025. it expects sluggish growth, followed by a possible collapse in 2025–2030 due to the need to decommission the main share of production assets in the manufacturing industry due to their complete physical wear and tear, carried out in a situation where there is no possibility of a recoupable investment in their renewal/replacement.
The forecast structure of the Russian ACS/MES/PLC market considered under the optimistic scenario differs significantly from the global one (For the global market, only the optimistic scenario is considered.). While the main growth driver in the world will be automated control systems and MES for automating the operation of industrial products and a similar trend will be observed in the PLC market, in Russia, in the optimistic scenario, automation of means of production will be significantly more important.
This is due, first of all, to the extremely low level of automation of existing production facilities in Russia, and, accordingly, a large potential for growth in the consumption of automated control systems and MES on their part, and secondly, to the small volume and underdevelopment of the market for automation systems of engineering systems of buildings, potentially being the main consumer of automated control systems for automation of industrial products of final consumption, but characterized by significantly greater inertia in Russia (in the world on the contrary).
It should be noted that for the manufacturing industry, successful large-scale digitalization is, without exaggeration, a matter of its survival in the next 10 years, and for the sphere of operation of buildings and structures, it is only a desirable, but optional element of development. Nevertheless, by the end of the forecast period, if an optimistic scenario is implemented, the impact of digitalization processes in terms of automation of the operation of industrial products of final consumption will already be noticeable.
The study considers automated process control systems not only as automation of production processes, that is, automation at the stage of manufacturing of industrial products, but also as automation of the processes of operation of industrial products, which is becoming widespread as the autonomy concept is developing. Accordingly, the prospects of the automated control system market are considered from the point of view of the transition of manufacturers of industrial products to the concept of cyber-physical product and service systems.
Autonomy at the stage of operation of industrial products is primarily the automation of engineering systems of buildings and structures, the so-called "Smart building". Another, even more massive type of automation objects at the operational stage, which are not means of production of industrial products, are vehicles. The most massive of them are cars that do not yet have developed automated control systems, but they will receive them as driver assistance systems are introduced and, eventually, autonomous driving systems, which will be such specialized automated control systems.
As part of the automated control systems of buildings and structures, household appliances that are not related to engineering systems of buildings are not taken into account. So, controllers of air conditioners, heating boilers, electricians, etc. are taken into account, but refrigerators and washing machines are not.
The choice of such a methodology, including the stage of operation of industrial products, is based on the concept of product and service cyber-physical systems, the peculiarity of which is the presence of the manufacturer's responsibility for the system at the stage of its operation, and providing the consumer with the functions of the system, and not the system itself, while the consumer may be another cyber-physical system.
The market for programmable logic controllers (PLCs) is considered as part of the automated control system market, the estimated volume of which, in addition to PLCs, includes:
• Other components of automated control system hardware, the so-called "field segment” (sensors and actuators);
• Software components of automated process control systems, divided into:
◦ hardware dependent, sold by one-time payment model (perpetual licenses);
◦ hardware independent, provided by cloud model (aaS).
Costs of installation of components of the "field segment", implementation and technical support of hardware-dependent software are not taken into account in the scope of the automated control system market considered in this study.
Cloud IIoT platforms and applications, as a key component of digitalization processes, are considered in two roles: as a replacement of part of the functionality of "traditional" automated control systems, and as their addition with new, primarily analytical functionality, as well as as a new monetization model – regular payments. Therefore, when calculating the total volume of the automated control system market, intersections were taken into account, that is, which part of the cloud IIoT platform market will replace the functionality of "traditional" automated control systems, and which part will be its expansion.
The contribution of cloud IIoT platforms to the formation of additional PLC consumption has also been evaluated.
Due to the presence of a clear separation between control levels in traditional automation systems, revenue from MES functionality is not taken into account for "traditional" automated control systems, but it is taken into account for a new generation of automated control systems – cloud IIoT platforms and applications where such functionality is combined. For example, in the segment of vehicle management for the traditional model, the revenue from the automated control system is assumed to be zero, since revenue from on-premise Fleet Management applications, which are a type of MES, is not taken into account. At the same time, for the cloud model of providing fleet management functionality as part of IIoT platforms and applications, this revenue is taken into account.
The sources of initial data for a qualitative assessment of the trends and prospects of the automated control system market are scientific works on this topic and analysis of trends in the development of product portfolios of leading vendors of automated control systems and PLC.
Quantitative assessments not only in Russia, but also around the world were carried out by J'son & Partners Consulting independently. Data from Mordor Intelligence, Pyramid Research and a number of other analytical agencies were used to evaluate the "traditional" ACS/PLC market.
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"Cloud transformation of the global and Russian PLC/ACS/MES markets"
1. METHODOLOGY AND BOUNDARIES OF THE STUDY
2. CONCLUSIONS AND RECOMMENDATIONS
3. GLOBAL ACS/PLC MARKET
3.1. ASSESSMENT OF THE VOLUME AND DYNAMICS AND DEVELOPMENT FORECAST
3.2. DRIVERS AND BARRIERS OF THE MARKET DEVELOPMENT
3.3. KEY TECHNOLOGICAL AND BUSINESS DEVELOPMENT TRENDS
3.4. APPROACHES AND TECHNOLOGIES FOR ENSURING CYBER SECURITY OF ACS/PLC
4. INTERNATIONAL CLASSIFICATION OF EDGE DEVICES AND TECHNICAL ANALYSIS OF PLC
4.1. APPROACHES TO THE CLASSIFICATION OF EDGE DEVICES IN THE WORLD
4.2. PLC TECHNICAL ANALYSIS
5. RUSSIAN ACS/PLC MARKET DEVELOPMENT PROSPECTS
5.1. POTENTIAL CAPACITY OF THE ACS/PLC MARKET IN RUSSIA, TAKING INTO ACCOUNT THE PROSPECTS OF DIGITALIZATION OF THE REAL SECTOR OF THE ECONOMY: GENERAL AND IN THE CONTEXT OF KEY VERTICALS (AREAS OF APPLICATION)
5.2. POSITIVE AND CONSERVATIVE FORECASTS OF THE DYNAMICS OF THE AUTOMATED PROCESS CONTROL SYSTEM AND PLC MARKET IN 2021–2025: GENERAL AND IN THE CONTEXT OF KEY VERTICALS (AREAS OF APPLICATION)
5.2.1. Positive scenario
5.2.2. Conservative scenario
5.3. DRIVERS AND BARRIERS TO THE DEVELOPMENT OF THE ACS/PLC MARKET IN RUSSIA
5.3.1. Barrier 1 – high level of industrial equipment wear
5.3.2. Barrier 2 – non-acceptance of new business models and enterprise management technologies
5.4. KEY TECHNOLOGICAL, GENERAL INDUSTRIAL AND BUSINESS TRENDS IN THE RUSSIAN ACS/PLC MARKET DEVELOPMENT
List of figures
Fig. 1. Volume, dynamics and structure of the global market for "traditional" and cloud APC, fact for 2018–2020, forecast for 2021–2025, million dollars
Fig. 2. Volume, dynamics and structure of the global market for IIoT platforms and applications ("cloud" ACSs), fact for 2018–2020, forecast for 2022–2025, million dollars
Fig. 3. Volume, dynamics and structure of the global PLC market including PLC included in ACSs, fact for 2018–2020, forecast for 2021–2025, million dollars
Fig. 4. Innovations in the field of manufacturing automation and operation of industrial products
Fig. 5. Innovations in the automation architecture for manufacturing processes and operation of industrial products
Fig. 6. Transformation of industrial automation systems as part of the digital transformation of industrial facilities
Fig. 7. Distributed IIoT system cyber security architecture
Fig. 8. A cyber security system organized over software-driven networks on the example of the 5G network
Fig. 9. The concept of an end-to-end network and compute layer (distributed private communication and cloud computing)
Fig. 10. A cross-domain cyber security system integrated with a 5G network
Fig. 11. A pilot project for deployment of 5G RAN and end-to-end network layers, China Southern Power Grid, China Mobile and Huawei, 2020
Fig. 12. A pilot project for deployment of 5G RAN and network layers with MEC, Saudi Aramco, Saudi Telecom Company, Huawei, 2020
Fig. 13. Global market for Managed NFV in a distributed system of data centers, including MEC, million dollars, estimate for 2020, forecast for 2021–2025
Fig. 14. Russian market for Managed NFV in a distributed system of data centers, including MEC, million dollars, forecast for 2021–2025
Fig. 15. Russian ACS/PLC market. Potential size and prospects of digitalization of the real sector of the economy, estimate for 2030 compared with the actual data for 2020
Fig. 16. Russian cloud-based IIoT platforms and applications. Potential size and prospects of digitalization of the real sector of the economy, estimate for 2030 compared with the actual data for 2020
Fig. 17. PLC segment in Russia. Potential size and prospects of digitalization of the real sector of the economy, estimate for 2030 compared with the actual data for 2020
Fig. 18. Consumption structure in the segment of "traditional" ACSs by application field, fact for 2020, forecast for 2030, %
Fig. 19. Consumption structure in the segment of cloud DCS (IIoT platforms and applications) by application field, fact for 2020, forecast for 2030, %
Fig. 20. Consumption structure of PLCs by application field, fact for 2020, forecast for 2030, %
Fig. 21. Achievable economic effect in the real sector of the Russian economy from digitization (automatic end-to-end management optimization) and its distribution between business and society, forecast for 2030, million dollars
Fig. 22. Contribution of production and management technologies in Russia by economic effect, forecast for 2030, billion dollars
Fig. 23. Volume, dynamics and structure of the Russian market for "traditional" and cloud ACSs, fact for 2018–2020, positive forecast for 2021–2025, million dollars
Fig. 24. Volume, dynamics and structure of the Russian market IIoT platforms and applications ("cloud" ACS), fact for 2018–2020, positive forecast for 2021–2025, million dollars
Fig. 25. Volume, dynamics and structure of the Russian PLC market including ACS, fact for 2018–2020, positive forecast for 2021–2025, million dollars
Fig. 26. Consumption structure in the segment of "traditional" ACSs by application field, fact for 2020, positive forecast for the period to 2025, million dollars, %
Fig. 27. Consumption structure in the segment of cloud DCS (IIoT platforms and applications) by application field, fact for 2020, positive forecast for the period to 2025, million dollars, %
Fig. 28. Consumption structure of PLCs by application field, fact for 2020, positive forecast for the period to 2025, million dollars, %
Fig. 29. Volume, dynamics and structure of the Russian market for "traditional" and cloud ACS, fact for 2018–2020, conservative forecast 2021–2025, million dollars
Fig. 30. Volume, dynamics and structure of the global market for IIoT platforms and applications ("cloud" ACSs), fact for 2018–2020, conservative forecast for 2021–2025, million dollars
Fig. 31. Volume, dynamics and structure of the Russian PLC market including ACSs, fact for 2018–2020, positive forecast for 2021–2025, million dollars
Fig. 32. Consumption structure in the segment of "traditional" ACSs by application field, fact for 2020, conservative forecast for the period to 2025, %
Fig. 33. Consumption structure in the segment of cloud DCS (IIoT platforms and applications) for applications, fact for 2020, conservative forecast for the period to 2025, %
Fig. 34. Consumption structure of PLCs by application field, fact for 2020, conservative forecast for the period to 2025, %
Fig. 35. Machinery fleet in Russia, thousand pcs, 1992–2013
Fig. 36. Dynamics of the age structure of manufacturing equipment in Russian mechanical engineering, 1980–2013
Fig. 37. Dynamics of manufacturing equipment wear in Russian mechanical engineering, % of the total number of assets, 1992–2013
Fig. 38. Dynamics of capacity utilization level in the context of certain types of engineering products, % of the working time, 1980–2013
Fig. 39. Penetration level of the main business process automation means in large companies in Russia, % of the total number of large companies, 2015
Fig. 40. Principles for the development of IIoT-ecosystems
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