Earlier this week, Power Technology Research had the pleasure of attending SPS in Nuremberg. This conference is one of the two major European events for Industrial manufacturers and our objective was to identify the key industrial drivers behind T&D equipment installed in the sector. Some of the key topics we found interesting were:

Communication Overload: With a Utility-perspective in mind, coming in from the prior week at European Utility Week, our initial impression was that “Industrie 4.0” was further down communication standardization path and had some lessons to share; however we were surprised at the sheer volume of independently operating communications standards present at the show. In fact, this volume has increased considerably over the last decade. With the emergence of 5G and a renewed push from the telecommunication sector, the complexity of standards will only increase for industrial users who will most likely be the first to risk implementation. Inherently, there is risk that this trend could be replicated for utilities who are the customers to those same standards users at SPS. Impacts of handing this communication variety will certainly increase infrastructure spending while opening up some room for a standardization companies operating at the head-in, when speaking about smart meters, or other centralized control layer.

Single solution providers: There is a paradigm shift in the industrial automation industry in the case of end user and machine builder demand. Traditionally, industrial end-users and machine builders would purchase a component within the required specs and then integrate, commission and maintain it within their systems. However, over the past several years it has become more common for the supplier to integrate a component themselves and then provide essentially a “plug and play” sub-system for the end-user’s machine. One example of this would be in the case of an electro-mechanical actuator. Instead of the end users purchasing and installing a ball screw to operate with the motor, the ball screw supplier would offer a complete actuator solution which includes the motor, ball screw and often the controller. The supplier would then commission and provide service for their products and move towards vertically integrating their product offering within their company.

The real question is – what is really driving this shift? PTR believes that this is in large part due to a push from suppliers to be complete solution providers for each of their clients in order to integrate additional revenue streams. This trend is expected to continue and will drive market consolidation as automation vendors purchase component suppliers in order to expand their sub-system product portfolios. SPS has played a critical role in this shift since the tradeshow acts as a platform for not only commercial transactions and partnerships but also the general exchange of information and ideas. Overall, SPS remains to be one of the leading industrial automation and electronics trade show in Germany. In 2016, the event brought in in over 63,000 visitors and 1600 exhibitors and is expected to continue be a pivotal medium for innovation over the next several years.

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