Global Operational Technology Market - 2022-2029

Global Operational Technology Market - 2022-2029

Market Overview

The global operational technology market size was worth US$ XX million in 2022 and is estimated to reach US$ XX million by 2029, growing at a CAGR of XX% during the forecast period (2022-2029).

Operational Technology (OT) is technology and software that detects or induces changes in industrial equipment, assets, processes and events through direct monitoring and control. Operational technology refers to systems that process operational data (including electronic, telecommunications, computer systems and technical components). OT systems may be required to control valves, engines, conveyors and other machinery to regulate and monitor various process parameters such as pressure, temperature and flow.

OT systems employ various technologies unfamiliar to IT for hardware design and communications protocols. Supporting outdated systems and devices, as well as multiple vendor architectures and standards, are common issues. Operational technology systems must be available since they monitor crucial industrial processes.

Market Dynamics

The demand for operational technology is mainly driven by the increasing economic growth and industrialization in developing countries. It is the most important driver for the market. The high costs involved in the installation and maintenance of operational technologies are a key factor in limiting the growth of this market.

Increasing economic growth and industrialization in developing countries

Due to cheaper labor costs and real estate prices, companies from industrialized economies are eager to expand their operations in emerging economies. Furthermore, growing industrialization in rising economies such as India, Japan, Africa, Brazil, Mexico and Indonesia has resulted in large infrastructure expenditures, luring global firms to set up manufacturing operations.

Global corporations typically use foreign direct investment (FDI) to establish new manufacturing operations in emerging economies. Low manufacturing costs and low-cost labor are the most important factors driving the transformation of developing economies into major industrial centers. However, because these economies rely heavily on labor or a manual workforce for manufacturing, the risks of errors and accidents are significant. The use of modern operational technologies helps to mitigate these risks. Multinational companies can set up greenfield units with the latest operational technologies.

Furthermore, these advances have created a demand for innovative and complex warehouse facilities to integrate and manage supply chains. The spike in investments in emerging economies to improve supply chain competence has created new growth prospects for operational technologies. Various systems, including WMS and MES, have made inroads into the various industries in emerging markets. Developing countries' rapid economic growth and industrialization are key factors driving global operational technology market growth.

High costs involved in installation and maintenance

Establishing modern automated manufacturing plants requires deploying the latest automation technologies such as SCADA, DCS, PAM and HMI. Data collection and analysis with these technologies help reduce errors in operations which improves the quality of products and the efficiency of manufacturing plants. Setting up a modern manufacturing plant requires large capital investments for software, equipment and labor training. It is difficult for new entrants who set up their first plant to invest a large sum. Before implementing industrial automation systems and solutions, new companies must analyze their investment returns.

Moreover, it is not feasible for companies to replace their existing legacy systems due to the high costs of new systems and the lack of interoperability with legacy systems. Legacy systems rely on proprietary protocols for communication, making it difficult to integrate them into systems based on new technologies. Companies also incur high costs in upgrading their existing systems. The automation software used in industries requires continuous maintenance and upgrades. Therefore, installing and maintaining operational technologies costs relegate them to major conglomerates and prevent wider adoption. It is a key challenge for the growth of the global operational technology market.

COVID-19 impact analysis

The global operational technology market experienced a decline in 2020 due to the COVID-19 pandemic. The COVID-19 epidemic started in the early months of 2020 and caused massive economic shocks globally. Manufacturing activities were affected due to lockdowns and movement restrictions put in place by governments to curb the spread of the pandemic. It has affected the production of robots and robotic components.

The operational technology sector is a highly advanced field where growth is derived from value creation through innovation by researching, developing and releasing new products. The pandemic's lockdowns and movement restrictions affected field testing and prototyping of new technologies.

Various end-users, including many manufacturing industries, had to scale down or suspend production due to reduced demand or lockdown restrictions. It led to a reduction in demand for operational technologies, which impacted the revenue of many leading companies operating in the sector. The demand for operational technologies is not expected to fully recover before the end of 2021.

The COVID-19 pandemic has posed numerous challenges for the global operational technology market in the short term. However, due to the rapidly growing adoption of automation, robotics and technological innovation across various industries, new opportunities have opened up for the operational technology market in the long term. The market will continue to grow significantly in the coming years.

Segment Analysis

The global operational technology market is segmented into components, network technology, end-user and regions. The operational technology market is segmented into human-machine interface and control systems based on components. Control system is leading within this segmentation since it is the most widely adopted component for operational technology. Control systems allow for fine-tuning of various operational parameters to achieve maximum efficiency. Control systems also allow for easy integration with existing hardware.

Geographical Analysis

Asia-Pacific is leading in the global operational technology market. The region accounts for the largest market share globally, primarily due to the rapid industrialization and strong economic growth of major emerging economies such as China, India, Vietnam, Indonesia, Malaysia and Thailand.

The rising demand for smart tools due to increased automation in industries; growing adoption of technologies such as Industry 4.0, smart factories, IoT and IIoT; and the increasing need to optimize productivity and reduce operational and maintenance costs are the major factors driving the growth of the operational technology market in the Asia-Pacific region.

Various governmental initiatives such as 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 expected to play a significant role in industrial advancement and, as a result, provide growth opportunities for the operational technology market. The Asia-Pacific region is expected to maintain a leading position in the operational technology market in the coming years.

Competitive Landscape

The global operational technology market is competitive due to various operational technologies and solutions that cater to different types of industrial and commercial requirements. Some of the major players contributing to the growth in the segment are Siemens, ABB, Honeywell International Inc., General Electric, Schneider Electric, Rockwell Automation, Inc., Emerson Electric Co., Fuji Electric Co., Ltd., Yokogawa Electric Corporation and Mitsubishi Electric Corporation. The major players in the operational technology market adopt several growth strategies such as joint ventures, the launch of new products and collaborations, along with mergers and acquisitions, thereby contributing to global growth in the industry.

Siemens

Overview: Siemens is an engineering conglomerate that designs and implements power and energy solutions. The company develops and builds fossil fuel power plants and power-generating components and offers gas turbines, steam turbines, generators, gas turbines, steam turbines, compressors, fans, instrumentation and controls, electrical systems, wind turbines, fuel cells, fuel gasifiers, turbochargers and environmental systems.

The company serves power, oil and gas, air separation, building complexes, ceramics, chemicals, food and beverage, manufacturing, marine, metals, pulp and paper, textiles and sugar industries. The company operates in various locations globally, such as Canada, Mexico, United States, Brazil, Saudi Arabia, China and other countries. Siemens was founded by German engineer Werner von Siemens in 1847 and is headquartered in Munich, Germany.

Product Portfolio

SIMATIC is the company's range of central processing unit (CPU) based control systems for industrial operations. SIMATIC features closed-loop PID control and can be integrated with artificial intelligence (AI) and machine learning (ML) technologies. The SIMATIC technology is scalable for the automation of complex industrial tasks.

Key Developments:

In 2021, Siemens started implementing a single-point access and user management control system on its latest version of SIMATIC CPUs. The step was undertaken to simplify operational procedures and increase user-friendliness.

Why Purchase the Report?

Visualize the composition of the operational technology market segmentation by the component, network technology, end-user and region, highlighting the critical commercial assets and players.

Identify commercial opportunities in the operational technology market by analyzing trends and co-development deals.

Excel data sheet with thousands of global operational technology market-level 4/5 segmentation data points.

PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.

Product mapping in excel for the critical product of all major market players

The global operational technology market report would provide access to an approx.: 58 market data tables, 65 figures and 250 pages.

Target Audience 2022

Operational technology manufacturing companies

Manufacturing companies

Industry Investors/Investment Bankers

Education & Research Institutes

Research Professionals