VDC Research WebcastINDUSTRIAL NETWORK MARKETSINDUSTRIAL NETWORK MARKETSMarch 2010 User Requirements Update

Chris RezendesExecutive Vice President

Recording Available

These slides are from a webcast presented on 03/18/10

A f ll di di i il bl f d l d tA full audio recording is available for download at:

http://www.vdcresearch.com/market_research/industrial_automation/freeresearch.aspx

1 – 2010 VDC Research Group, Inc.

VDC Research Group

Complimentary Insights & Marketing Data on theIndustrial Automation & Control Markets Available at:

www.vdcresearch.com

2 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Today’s Speaker

• VDC Research Groupp Founded in 1971, continuous, profitable operation for nearly 40 years. Focus on a number of embedded and niche network market segments. 1,000 clients annually …90% technology suppliers, tech investors.

Ch i R d E ti Vi P id t• Chris Rezendes – Executive Vice President 19 years experience in embedded, industrial, defense and other mission

critical and high available technology industries. 14 years experience in senior management and leadership positions at a y p g p p

number of technology solutions and professional services organizations. 2 years DARPA contracting. Chris has advised many of the largest and most respected technology

companies in a number of technology segments worldwidecompanies in a number of technology segments worldwide. Chris is a graduate of Harvard University.

3 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

The recession is changing the timing and scope of industrial networking solution deploymentg p y

What impact is the recession having on your industrial networking p g y gevaluation and deployment plans?

4 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Most current evaluators and operators of industrial networks are expecting to maintain, or increase investmentp g

What is your firm’s spending plans for industrial network y p g psolutions for 2010 and 2011?

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Nearly half of survey respondents are committed to industrial networking solutions g

What is your current position with respect to industrial network solutions y p poperation, evaluation and investment for factory floor applications?

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Wireless evaluation penetration is more than 82%; wireline nearly 97%y

Which network connection method are you investigating?y g g

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While standards evaluation is rising, proprietary evaluation remains a material part of the market p

Which specific wireless network protocols / standards are you p p yevaluating for your next investment / deployment?

8 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Massive growth in Ethernet, and persistent support for control environment ‘standards’ will drive hybrid installsy

Which specific wireline network protocols / standards are p pyou evaluating for your next investment / deployment?

9 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

While the market is shifting toward Ethernet, nearly 27% surveyed see no reduction in reliance on proprietaryy p p y

How will your firm’s reliance on these different network yprotocols change during the next 2 years?

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Progress is being made – perhaps slowly – in discrete control and enterprise integration applicationsp g pp

What is the status of networking key applications?g y pp

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Networking across various levels of control architectures is growing, with sensors at nearly 61% of respondentsg g y p

Which nodes are currently networked, or under evaluation y ,for industrial networking integration?

12 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Industrial network investment turns on secure, reliable access to real time information

What are the primary operational drivers for your investigation p y p y gof and investment in industrial network solutions?

13 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Real and perceived issues share top billing in the list of barriers to adoptionp

What are the primary barriers to your operation deploying industrial p y y p p y gnetworking solutions during the next 2 years?

14 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Customer appear split on the issue of services, but those who need it, need integration supportg pp

What types of support requirements are most important for your firm yp pp q p yas you consider investment in industrial network solutions?

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Value-adding channel position remains small, with ISI and ISV combined cited by less than 38% of respondentsy p

What are your primary sources for your industrial networking solutions investments?

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Summary Observations & Pressing Questions

• How can this demand be mapped along market segment pp g gdimensions? Regional markets? Verticals? Applications? Account types and tiers?

• What are the primary technical product/ solution selectionWhat are the primary technical product/ solution selection criteria? And how do they influence the tension between industrial and commercial grade offerings?

• What are the primary commercial vendor/ supplier selectionWhat are the primary commercial vendor/ supplier selection criteria? And how are they shaping the co-existence of industrial and commercial suppliers in these markets?

• What do price and margin trends look like?• What do price and margin trends look like?

• Given customers’ current requirements, preferences and practices, where are they most likely to go for information? P h i ? S t?

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Purchasing? Support?

How will VDC coverage help clients stay on top of the market?

Industrial Networking Infrastructure Products: g2010- 2014 Market Requirements & Opportunity Analysis • TRACK 1: User Requirements & Channel Analysis Volume 1: Global Wireless Industrial Networking Products Volume 2: Global Wireline Industrial Networking Products

• TRACK 2: Competitive Analysis Volume 1: Global Wireless Industrial Networking Products

V l 2 Gl b l Wi li I d t i l N t ki P d t Volume 2: Global Wireline Industrial Networking Products

STUDY PUBLICATION DATE ACTUAL MARKET SIZE/SUPPLIER SHARE FORECAST MARKET SIZE

Service Year 2010 2009 2010-2014

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Q&A Session

Thank You for Attending this VDC WebcastgFor more information about VDC Research coverage of the global markets for industrial networking solutions – including the 2010 Industrial Networking Infrastructure Solutions Market Intelligence Service, or the recently published g y pConnected Factory Market Opportunities & Requirements study, please contact:

Christopher Rezendes – Executive Vice Presidentcjr@vdcresearch.com | 508.653.9000 x120

Tim Shea – Senior Account Executivetims@vdcresearch.com | 508.653.9000 x146

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