Remote - Winter 2012 - (Page 18)

Feature Article SCADA Market: Charting Strong Growth Amidst Industry Speculation Deepankar Bose, Industrial Automation & Process Control Lead Analyst Muthuraman Ramasamy, Industry Analyst Frost & Sullivan The process industries are always searching for versatile, easily deployable solutions that can reduce manpower with feasible, cutting edge technology. The presence of geographically scattered assets challenges the execution of fast, effective decisions. This requires seamless data retrieving and data mining with accuracy in real time. Frost & Sullivan sees “Digital Operations” as a micro-boom (short-term growth opportunity) for process industries like oil and gas, mining, power, etc. As remote monitoring technologies become pervasive across these industries, SCADA is well positioned to take center stage in driving actionable intelligence and achieving superior operational efficiencies. Despite being challenged by emerging technologies like M2M, SCADA solutions still find a sweet spot in the top three industry verticals (oil and gas, power, and water and wastewater) due to the complexity involved in the target enduser architecture. One of the key trends Frost & Sullivan research is monitoring in the market is the dependence upon third party compatibility with field instruments, including refresh rates for operational excellence and flexibility to synchronize with legacy systems. This trend is driving SCADA solutions to an acute focus on open architecture, which helps the solution be hardware agnostic. Another key trend is that of the control architecture, which is moving from a centralized to a distributed model. Hence, SCADA solutions are developing distributive remote terminal units (commonly known as RTUs) to reduce overall SCADA architecture deployment cost. By incorporating geographic information system (GIS) centric monitoring and wireless operating technology, SCADA solutions have transitioned into next generation solutions. In summary, digital operations is a strong tailwind for sensing markets, which in turn fuels strong growth for the SCADA market. The future market will evolve to intelligence moving to the field, with control moving from centralized to semi-centralized. The growth expected in the oil and gas market is clearly seen by its potential investments of $350 billion per year from 2011 to 2018 to streamline processes. The amount of CAPEX spent on resource extraction is expected to drive the SCADA component market. Unconventional production sources such as bitumen production are anticipated to double by 2018, and deep water production for oil and gas is also expected to grow by 20.0 percent by 2018. The ongoing technology innovation in offshore platforms going subsea will challenge traditional production execution. Controls will move from topside to bottom-side, which will require strong communication and networking technologies for remote control and management. The SCADA solution will see a progressive trend in its functionalities, shifting from just collection and data acquisition to smart and intelligent data management. The emerging trend of universal control systems will continue to evolve and grow as self-healing networks and systems that can manage processes with the least amount of human supervision deliver improved performance. The US market is in resurgence due to the shale gas boom. As horizontal fracking becomes the preferred method of gas extraction, well pads will emerge as distributed control centers for multiple well heads. SCADA will be the middle man, providing communication and data acquisition for these multiple well pads. This scenario will increase RTU sales and provide potential business opportunities for SCADA solution providers. Also, Frost & Sullivan analysis shows that pipeline management (for oil and gas mid-stream) will be the most lucrative option for SCADA solution providers. As shale gas develops into a mainstream energy source for the US market, the pinch will be felt by end-users due to the lack of pipeline connectivity for the well to wheel consumption. The American Natural Gas Association has estimated an annualized expenditure of $8.0 billion per year on greenfield pipelines is required over the next several years to achieve the future state. At this juncture, the market remains biased between commercial-offthe-shelf (COTS) solutions versus vertical solutions. The key differentiation in the future will be delivering industry packs that have the breadth and depth to address specific unmet needs. With many niche solution providers in the market, the market could see potential acquisitions made by industry majors. Infrastructure woes in emerging markets are a core focus for governments to deliver promised growth. From a sheer, basic necessity standpoint, markets like India and China would see extensive money inflows into power infrastructure markets. The capital would go to building power generation capacity and modernizing existing transmission and distribution (T&D) networks. While smart grid does look like a far off dream for these markets, SCADA does see an important play in developed markets. From a T&D standpoint, SCADA faces stiff competition against wireless technologies but remains unchallenged in vast area coverage. A key area of growth opportunity in developed markets is the services play. As critical industries modernize equipment, an emerging area of focus is cyber-security and compliance with regulations. This further drives the need for industry services focused on securing nations’ infrastructure. Frost & Sullivan analysis shows that the total SCADA market (including software, hardware and services) is anticipated to grow at a 7.1 percent compound annual growth rate (CAGR) for the period of 2011-2018. • Technology movement from proprietary technology-based structures to more standardized and open platform-based solutions to ensure seamless communication with various other web-based architectures for data mining and data retrieving. • Cyber-security and defense-in-depth strategies will see an increased focus in the SCADA market. • Business system integration to drive corporate-level key performance indicator (KPI) visibility will drive integration markets. Change is constant. The SCADA market is a telling example of the multi-tier changes affecting the market. As industries become digital and are populated increasingly with “digital natives,” the focus of product development will be on easy-to-use interfaces. The future market could potentially see SCADA data management “as a service” as end-users focus on core activities while outsourcing non-core activities to industry specialists. Hence, the market could see a new breed of solution providers who are completely agnostic, yet deliver incremental business value to the end-users. For more information visit www.frost.com. 18 www.RemoteMagazine.com Growth Prospects for the Market: Critical Issues in Global SCADA Market Strategic Conclusion http://www.frost.com http://www.RemoteMagazine.com

Table of Contents for the Digital Edition of Remote - Winter 2012

Remote - Winter 2012
Editor's Choice
Automated Monitoring Out at the Network Edge
What’s in Your Radio Communication Tackle Box?
When Does Solar Make Sense for Remote Sites?
Utility Networks in Transition
TV White-Space Technology Makes Broadband Affordable for Remote Locations
Challenges of Remote Management over Satellite
SCADA Market: Charting Strong Growth Amidst Industry Speculation
SCADA
Networking
Security
Oniste Power
Environmental Monitoring
Industry News

Remote - Winter 2012