Operational Technology Market Size Share Forecast to 2027 | MarketsandMarkets
Posted: Apr 07, 2022
The global operational technology market was valued at USD 157.9 billion in 2022 and is projected to reach USD 216.3 billion by 2027; it is expected to grow at a CAGR of 6.5% from 2022 to 2027. The major drivers of the market include the surging adoption of Industry 4.0, rising emphasis on industrial automation in manufacturing processes, increasing government involvement in supporting industrial automation, growing emphasis on regulatory compliances, increasing complexities in the supply chain, and surging demand for software systems that reduce time and cost. The operational technology market has been segmented by component, networking technology, industry, and geography.
Drivers: Strategic initiatives by governments to promote adoption of operational technologies
Governments worldwide are becoming aware of the significant potential of operational technologies; therefore, they are supporting and funding R&D for technologies such as IIoT and industrial 3D printing. The governments of various 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.
Restraint: High installation and maintenance costs
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. The setting up of these 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. Moreover, 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.
Opportunities: Rapid industrial growth in emerging 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 are 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. However, as manufacturing in these economies is dominantly driven by labor or a manual workforce, the chances of errors and accidents are quite high.
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Challenges: Rise in instances of automated cyber attacks
Cyberattacks have always been a major threat to the 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 cyberattacks. Earlier, cyberattacks 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. Automated cyberattacks 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. 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 cybersecurity assessments of ICS. Cybersecurity 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, according to CERT. Hence, automated cyberthreats act as a challenge for the growth of the operational technology market. To prevent cyberattacks, governments of various countries are making investments and plans to implement cybersecurity and support businesses to grow.
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