Operational Technology Market Forecasts to 2028 – Global Analysis By Type (Field Devices, Control System), Offering (Hardware, Services, Software/ Platform), Networking Technology (Wired, Wireless) and By Geography

According to Stratistics MRC, the Global Operational Technology Market is accounted for $151.04 billion in 2021 and is expected to reach $267.37 billion by 2028 growing at a CAGR of 8.5% during the forecast period. Operational technology is a category of hardware and software that monitors and controls how physical devices perform. An important feature of operational technology is the ability to monitor and control physical devices remotely. Operational Technology has become a common, crucial element of critical infrastructure systems since it is widely used in power plants, refineries, nuclear plants, etc. Earlier was only used in industrial control systems for manufacturing, transportation, and utilities, and also the technologies had networking limitations. The conventional operational technology which was only used in industrial control systems is now being replaced by operational technology with the technological advancements in communication and networking resulting in the emergence of the trend for smart operational technologies. This has provided administrators to perform their tasks remotely within the network and get work done in the real time.



Market Dynamics:

Driver:

Strategic Inventiveness by Governments

The governments of numerous countries are supporting IIoT innovations, as they expect themselves to become potential adopters of the technology. They are financially supporting new IoT research projects and implementations to build and run smart cities in the future. Governments worldwide are undertaking initiatives and providing funding to educational institutions, research centers, and research and technology organizations to further explore the possibilities of operational technologies. Administration's universal are becoming responsive to the significant potential of operational technologies; therefore, they are supporting and funding R&D for technologies such as IIoT and industrial 3D printing. Governments of APAC countries are actively undertaking projects and initiatives to digitalize manufacturing facilities. For instance, the Government of South Korea, along with its nine economy-related ministries, unveiled measures to boost the small- and mid-sized manufacturing companies in South Korea and establish 10 industrial zones and smart factories by 2022 to upgrade its manufacturing industry.

Restraint:

High Installation and Maintenance Costs 

The setting up of manufacturing plants requires large capital investments for equipment, software, and training. Investing such a large amount is difficult for new entrants who are setting up their first plant. As such, these companies have to carry out an in-depth analysis of their return on investments before implementing industrial automation systems and solutions. The establishment of new automated manufacturing plants requires the deployment of the latest automation technologies such as SCADA, DCS, PAM, and HMI. Gathering data with the help of SCADA helps in reducing errors in calculations while improving the quality of products and production efficiency of manufacturing plants. Besides, it is not feasible for several companies to replace their existing legacy systems owing to the high costs of new and advanced systems and the lack of interoperability in legacy systems, which rely on their proprietary protocols to communicate, making it difficult to connect them to systems based on new technologies. The additional costs incurred by manufacturers to upgrade their existing systems are high.

Opportunity:

Speedy Business Growth in Developing Economies

Companies from developed economies are looking to expand their operations in emerging economies due to cheap labor costs and lower real estate rates. Additionally, rapid industrialization in emerging economies, such as India, Japan, Africa, Brazil, Mexico, and Indonesia, has resulted in significant investments in infrastructure development, which, in turn, is attracting global companies to these economies to set up manufacturing plants. The FDI by global companies is generally used for setting up new manufacturing plants in emerging economies. The predominant contributing factor behind the conversion of developing economies into major manufacturing hubs is the low manufacturing cost and low-cost labor. Additionally, these developments have created a requirement for advanced and sophisticated warehousing facilities to integrate and manage supply chains. The surge in investments toward enhancing the capability of supply chains in emerging economies has opened new growth opportunities for operational technologies. Various solutions, such as WMS and MES, have penetrated the industries in developing countries.

Threat:

Increase in Occurrences of Automated Cyber Attacks

Automated cyber-attacks mainly target industrial control systems such as distributed control systems (DCS), supervisory control and data acquisition (SCADA) systems, and human-machine interfaces (HMI), as these can be hacked easily. Cyber-attacks have always been a major threat to companies adopting digitalization. The large-scale integration of technologies, cloud, digitalization, and automation implies a high risk of cyber threats. Though the security of these automated systems has increased to a significant extent, they are still prone to cyber-attacks. Earlier, cyber-attacks were carried out by individuals, which then upgraded to a group of people undertaking synchronized attacks. Presently, it has reached the stage wherein automated attacks are carried out by machines. These systems are less secure owing to their installation in remote locations, inadequate firewall safety, and lack of strong connectivity networks. Industrial Control Systems-Computer Emergency Response Team (ICS-CERT) conducts onsite cyber security assessments of ICS. Cyber security breaches reported to the US federal agencies by the Computer Emergency Response Team (CERT) increased rapidly in energy, water & wastewater management, food, and agriculture, dams, critical manufacturing, and emergency services segments, CERT. Hence, automated cyber threats act as a challenge to the growth of the operational technology market. To prevent cyber-attacks, governments of various countries are making investments and plans to implement cyber security and support businesses to grow.

Distributed Control Systems (DCS) segment is expected to be the largest during the forecast period

An important alteration in consumer purchasing behaviour has caused the increased execution of real-time WMS software solutions for efficient order processing, picking, packaging, shipment tracking, and route planning. WMS helps companies quickly adapt to the changing customer requirements in the e-commerce and online shopping space. Additionally, the employment of WMS helps manage warehouses at an optimum level, with increased productivity and efficiency of warehouse operations and reduced product delivery time.

The energy & power segment is expected to have the highest CAGR during the forecast period

The energy demand is increasing constantly; though, the problems of environmental impact and scarcity associated with conventional sources might lead to a probable energy crisis, which makes optimizing the production processes necessary for the industry. Manufacturers face growing cost pressures and increasing demand for diverse product portfolios, coupled with regulatory and safety guidelines. Technologies such as MES, PAM, and HMI help manufacturers standardize their workflow and minimize lead times by eliminating the time required for the approval of various associations and the FDA. MES also maintains data and processes that need to be followed for regulatory compliance during production. Using MES helps in eliminating the need for maintaining records on paper. PAM and machine condition monitoring enable the proper functioning of systems used in the manufacturing process by providing continuous maintenance activities in these industries.

Region with highest share:

The Asia Pacific is projected to hold the highest market share, rising demand for smart tools, owing to increasing automation in industries; growing adoption of technologies such as Industry 4.0, smart factory, IoT, and IIoT; and the increasing need to optimize productivity and reduce operational and maintenance costs. Government support in various APAC countries to drive industrialization is one of the important factors that will boost the demand for operational technology in the coming years. Various initiatives have been taken by the governments in the region. For instance, China's "Made in China 2025," Japan's "Industrial Value Chain Initiative (IVI)," South Korea's "The Manufacturing Innovation Strategy 3.0 (Strategy 3.0)," and India's "Samarth Udyog Bharat 4.0," are likely to play major roles in industrial advancement and consequently create growth opportunities for the market.

Region with highest CAGR:

North America is projected to have the highest CAGR, owing to the acceptance of smart automation technologies and a significant number of established operational technology players present in the region. Furthermore, the players in North America are emphasizing modernizing their facilities with advanced technologies which are further boosting the market growth. The growth is accredited to the growing in demand from process industries and non-process industries which are witnessing a significant rise in their operational activities.



Key players in the market:

Some of the key players profiled in the Operational Technology Market include ABB, Accenture, Advantech Co., Ltd., Cognizant, Emerson Electric Co., FANUC INDIA Private Limited, General Electric Company, Hewlett Packard Enterprise Development LP, Honeywell International Inc., Huawei Technologies Co., Ltd., John Wodd Group PLC, Oracle, Rockwell Automation, Inc., SCADAfence, Schneider Electric, Siemens, Wipro Limited, Wunderlich-Malec Engineering, Inc., Yokogawa India Ltd.

Key developments:

In September 2021: Yokogawa Electric Corporation announced a major upgrade to its Exaquantum Safety Function Monitoring (SFM) software, an OpreX Asset Operations and Optimization solution that helps identify whether actual operating performance meets safety design targets.

In October 2019: ABB entered into a partnership with Operational Technology Cyber Security Alliance (OTCSA). This partnership focused on security for operational technology in critical infrastructures and Industrial Control Systems (ICS). This solution will deal with the cybersecurity issues in systems and solutions for infrastructure and industry. Both the companies will mutually benefit, which will help them expand their market.

In December 2019: SCADAfence partnered with Fortinet for developing a solution for Operational Technology (OT) security. This solution set the benchmark for the future developments and helped the company gain trust and reliability among customers..

Types Covered: 
• Field Devices
• Control System
• Services 

Offerings Covered:
• Hardwar
• Software/Platform

Networking Technology Covered:
• Wired
• Wireless
  
Deployments Covered:
• On Premise
• Cloud
• Hybrid

Organization Sizes Covered:
• Large Enterprise
• Small and Medium Size Business

Components Covered:
• Human- Machine Interface
• Control Systems

End Users Covered:
• Process Industry
• Discrete Industry
• Utilities
• Telecommunications

Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan       
o China       
o India       
o Australia 
o New Zealand
o South Korea
o Rest of Asia Pacific   
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025 and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements

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• Competitive Benchmarking
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