Automation's Reset

The Whole Sorry Story and Some Light at the End of the Tunnel

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Rockwell's closely watched process automation initiative, according to Nosbusch, was responsible for $700 million in revenue, up over 2009 and comparing favorably to 2008's record numbers. "The recovery has been sharper and faster than we expected," Nosbusch said. Rockwell's estimated 2011 earnings per share range from $3.80 to $4.20. That's significantly higher than 2010, but, according to CFO Ted Crandall, "our EPS estimate is consistent with a balanced view of the economic conditions."

Other companies are reporting increased sales, increased quotation activity and increased backlogs. This picture is a significantly different one than we painted last December. So, based on reports like these, we're likely to present you with a considerably rosier portrait of the automation industry a year from now.

Making Hay

Some companies used the new, lower valuation of the market to snap up some bargain-priced acquisitions. For example, ABB snapped up K-Tek, Emerson picked up Roxar, Honeywell picked up RMG, and, in a whang-dang-doodle of an acquisition, GE bought Dresser, including Masoneilan, the second largest manufacturer of control valves.

In addition, all of the automation vendors did restructuring, downsizing and layoffs. However, none of the bigger-fish-eat-big-fish acquisitions, such as the rumors of an acquisition of Rockwell by ABB, materialized. Company managements realized that the costs of large acquisitions are much higher in the reorganizations and company culture shifts that accompany those sizeable deals, than they wanted to pay in a very deep recession. Like ABB's purchase of K-Tek, most of the acquisitions were to plug a hole in the product portfolio.

How Do We Do It?

Every year, we find more companies to add to the list. If you spot one we haven't listed and that should be, let us know. Even though we add companies and subtract the ones that have been acquired, we haven't changed our basic methodology of analysis for the past several years.

Here's what we are including in our definition of the 50 largest companies:

  • Process automation systems and related hardware software and services
  • PLC business, as well as related hardware, software, services, I/O and bundled HMI
  • Other control hardware components, such as third-party I/O, signal conditioners, intrinsic safety barriers, networking hardware, unit controllers and single- and multi-loop controllers
  • Process safety systems
  • SCADA systems for oil and gas, water and wastewater, and power distribution
  • AC drives
  • Motion control systems
  • Computer numerical control (CNC) systems
  • Process field instrumentation, such as temperature and pressure transmitters, flowmeters, level transmitters and associated switches
  • Analytical equipment, including process electrochemical, all types of infrared technology, gas chromatographs for industrial manufacturing and related products
  • Control valves, actuators and positioners
  • Discrete sensors and actuators
  • All kinds of automation-related software, from advanced process control, simulation and optimization to third-party HMI, plant asset management, production management (MES), ERP integration packages from the major automation suppliers and similar software
  • Other automation-related services provided by automation suppliers
  • Condition-monitoring equipment and systems
  • Ancillary systems, such as burner management systems, quality control systems for pulp and paper, etc.

What we are not including:

  • Pumps and motors
  • Robotics
  • Material-handling systems
  • Supply chain management software
  • Building automation systems
  • Fire and security systems
  • Processing equipment such as mixers, vessels, heaters, etc., as well as process design licenses from suppliers that have engineering divisions
  • Electrical equipment, such as low-voltage switchgear, etc.

Also, there also are companies we're watching that are not yet in the Top 50, and we've made them "'Honorable Mentions." Some, like Opto22, made the North American list, but aren't yet large enough to make the global list. Others, like Supcon and Hollysys (both rom China) are just making the list. This is truly becoming a global business.

See the Top 50 Global Automation Vendors

See the Top 50 NORTH American Automation Vendors

 


 

Walt Boyes is Control's editor in chief. Larry O'Brien is a research director at ARC Advisory Group.

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