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As the suppliers made the transition to COTS components, they also discovered that the hardware market was shrinking fast. COTS not only resulted in lower manufacturing costs for the supplier, but also steadily decreasing prices for the end users, who were also becoming increasingly vocal over what they perceived to be unduly high hardware costs. Some suppliers that were previously stronger in the PLC business, such as Rockwell Automation and Siemens, were able to leverage their expertise in manufacturing control hardware to enter the DCS marketplace with cost effective offerings.
To compound the issue, suppliers were also realizing that the hardware market was becoming saturated. The lifecycle of hardware components such as I/O and wiring is also typically in the range of 15 to over 20 years, making for a challenging replacement market. Many of the older systems that were installed in the 1970s and 1980s are still in use today, and there is a considerable installed base of systems in the market that are approaching the end of their useful life. Developed industrial economies in North America, Europe, and Japan already had many thousands of DCSs installed, and with few if any new plants being built, the market for new hardware was shifting rapidly to smaller, albeit faster growing regions such as China, Latin America, and Eastern Europe.
Because of the shrinking hardware business, suppliers began to make the challenging transition from a hardware-based business model to one based on software and value-added services. It is a transition that is still being made today. The applications portfolio offered by suppliers expanded considerably in the ’90s to include areas such as production management, model-based control, real-time optimization, Plant Asset Management (PAM), Real Time Performance Management (RPM) tools, alarm management, and many others. To obtain the true value from these applications, however, often requires a considerable service content, which the suppliers also provide. DCS supplier services have also expanded in scope to the point where many suppliers can act as Main Automation Contractors (MACs), providing a single point of responsibility for all automation-related facets of a project
To compound the issue, suppliers were also realizing that the hardware market was becoming saturated. The lifecycle of hardware components such as I/O and wiring is also typically in the range of 15 to over 20 years, making for a challenging replacement market. Many of the older systems that were installed in the 1970s and 1980s are still in use today, and there is a considerable installed base of systems in the market that are approaching the end of their useful life. Developed industrial economies in North America, Europe, and Japan already had many thousands of DCSs installed, and with few if any new plants being built, the market for new hardware was shifting rapidly to smaller, albeit faster growing regions such as China, Latin America, and Eastern Europe.
Because of the shrinking hardware business, suppliers began to make the challenging transition from a hardware-based business model to one based on software and value-added services. It is a transition that is still being made today. The applications portfolio offered by suppliers expanded considerably in the ’90s to include areas such as production management, model-based control, real-time optimization, Plant Asset Management (PAM), Real Time Performance Management (RPM) tools, alarm management, and many others. To obtain the true value from these applications, however, often requires a considerable service content, which the suppliers also provide. DCS supplier services have also expanded in scope to the point where many suppliers can act as Main Automation Contractors (MACs), providing a single point of responsibility for all automation-related facets of a project
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