THE PUSH TOWARD ETHERNET NETWORKING IN INDUSTRIAL OPERATIONS

Ethernet is a mature communication technology that has been the de facto standard of corporate enterprise systems around the world. Due to its cost-cutting benefits, this technology is now migrating toward the factory floor. Manufacturers of industrial control products, such as distributed/remote I/O, PLC, and DCS vendors, have realized the new opportunities that industrial Ethernet presents. As a result, those manufacturers have begun developing and distributing products designed for Ethernet connectivity.

Natick, Massachusetts -- Users in the automation and manufacturing process industries have taken careful notice of the power of Ethernet in the office. As an office-based network, Ethernet boasts a number of benefits, including ease of use, low-cost network implementations, high bandwidth, and integration with Internet/Intranet. Manufacturers in industrial automation environments believe that the benefits traditional Ethernet offers will transfer well to the factory floor.

Current and Forecast Worldwide Shipment Shares of
Distributed/Remote I/O with Ethernet Connectivity (Dollars in Millions)

For Ethernet-based Network Interfaces:
2002: 15.4%
2005: 23.5%

For All Other Bus/Network Interfaces:
2002: $2504.7
2005: $2855.3

Users cite the following as benefits of an industrial Ethernet system:

I. Improved bandwidth
Recent trends in Ethernet technology have shown a steady migration toward Fast Ethernet (100 Mbps) and Gigabit Ethernet (1000 Mbps). These speeds, which respectively are 10 and 100 times as fast as traditional Ethernet, are attractive to users who transmit large data files over their networks.

II. Integration with Internet/Intranet
Ethernets TCP/IP protocols extend control and monitoring capabilities to remote or satellite operations without the use of gateways.

III. Open connectivity
Ethernet technology is based on an open standard. With Ethernet-based systems, consumers of industrial devices (such as PLCs, DCSs, etc.) are not limited to the device manufacturers own proprietary protocol or network structure. Users are free to mix and match devices from multiple vendors in the same network.

IV. Standardization in infrastructure
One of the most significant advantages of industrial Ethernet is that this network can be implemented corporate-wide: from the device-level to the control-level, back to the enterprise. Such standardization in the network infrastructure will limit the cost of support programs and maintenance expenditures.

V. Reduced learning curve and training costs
Ethernet has long thrived as the major enterprise LAN technology. This long-term success has produced a deep understanding of the systems protocols and components. As a result, many developers and users will not require much time in learning new application programs, thus reducing training costs associated with implementing industrial Ethernet systems.

Ethernet is a mature communication technology that has been the de facto standard of corporate enterprise systems around the world. Due to its cost-cutting benefits, this technology is now migrating toward the factory floor. Manufacturers of industrial control products, such as distributed/remote I/O, PLC, and DCS vendors, have realized the new opportunities that industrial Ethernet presents. As a result, those manufacturers have begun developing and distributing products designed for Ethernet connectivity. Yet, what is the development status of network infrastructure components and sub-systems for enabling industrial Ethernet? Who are the leading vendors and what are their product and service offerings?

Venture Development Corporation (VDC) will analyze the state of industrial Ethernet infrastructure components and sub-systems in its upcoming multi-client market research study titled "Industrial Ethernet: Wireline and Wireless Infrastructure Components and Network Software."

The research program will be packaged in two parts:

- Wireline Industrial Ethernet: Infrastructure Components and Network Software

- Wireless Industrial Ethernet: Infrastructure Components and Network Software

Highlights of the program include:

I. An evaluation of the opportunities for wireline and wireless industrial Ethernet

II. Market segmentations, estimates, forecasts and trend analysis for the following product categories

Wireline Ethernet:

- Networking components (examples include bridges, controllers, I/O devices, gateways, hubs, routers, switches, etc.)

- Interconnect products (examples include connectors, cables, cordsets, distribution boxes, terminal blocks, etc.)

- Network management and analysis software
Wireless Ethernet:

- Networking components (examples include access points antennas, I/O devices, modems, repeaters, etc.)

- Network management and analysis software

III. Market estimate and forecast period

Estimates and forecasts will be provided in unit and revenue terms for the following periods:
- 2003 actuals
- 2004-2006 forecasts

IV. End-user analyses

VDCs report will provide analyses of end-user requirements, including product selection criteria and service and support requirements, for wireline and wireless industrial Ethernet and related infrastructure components.

To download and review this programs formal proposal, please visit VDC at http://www.vdc-corp.com/industrial/works/br03-31.html

About Venture Development Corporation

Venture Development Corporation, a technology market research and strategy firm, was founded in 1971 by graduates of Harvard Business School and MIT. Over the years, VDC has developed and fine-tuned a unique and highly successful methodology for forecasting and analyzing dynamic technology markets. The company has over 30 years of experience in providing market research, strategic analysis and consulting services to technology companies worldwide. The VDC mission is to provide our clients with strategic and tactical information that satisfies real needs and will provide lasting value, fostering client loyalty and respect.

For further information about Industrial Ethernet: Wireline and Wireless Infrastructure Components and Network Software" or any other VDC service contact: Marc Regberg, Vice President, 508-653-9000, ext. 111, msr@vdc-corp.com

Venture Development Corporation
One Apple Hill Drive Suite 206 Box 8190 Natick, Massachusetts 01760
Tel: 508-653-9000 Fax: 508-653-9836 www.vdc-corp.com
E-mail: info@vdc-corp.com

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