Paradigm Shift

It’s not a mystery, it’s a sociological fact: Automation engineers have begun to disappear at user companies. According to a new ARC Advisory Group study, engineering expertise at user companies has “shrunk to critically low levels,” forcing users of automation to rely on suppliers to provide services to keep automation products working. ARC pegs the pace of growth for the supplier-provided automation services market at 9.1% over the next five years.

Users of automation products increasingly look to suppliers to supervise implementation, which ultimately gives users access to more after-market services, the report says. In turn, those services are part of the strategy that automation suppliers have adopted to shore up hardware margins reduced by increasing use of off-the-shelf components. Demand for automation in China is a major factor spurring the current market. Chinese price consciousness, for example, means that North America and Europe bring in more profit for automation suppliers even though their greatest revenue growth comes from China. For more information, visit www.arcweb.com/res/autosvs.

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