Web Sales of Automation Products Will Near $42 Billion by 2005

Web sales of automation products and systems, which totalled $247 million in 1999, will grow by almost 200 times that value to nearly $42 billion by the end of 2004, according to a new worldwide study by the ARC Advisory Group.

Web sales of automation products and systems, which totalled $247 million in 1999, will grow by almost 200 times that value to nearly $42 billion by the end of 2004, according to a new worldwide study by the ARC Advisory Group.

‘Web sales and the implementation of e-business strategies are causing a revolution in the automation business,’ according to ARC Senior Analyst David Clayton (E-Mail:davec@arcweb.com), the author of Web Sales Outlook for Automation Products and Systems – Market Analysis and Forecast through 2004.

‘Not too long ago, just having a home page meant an automation supplier was Internet-savvy. However, the rise of commercial Web sites, intranets, extranets, trade exchanges, and auctions as critical business tools is dramatically changing the face of the automation business.’

In response to unrelenting business pressures, automation suppliers are now embracing Web sales. ‘Despite success stories among commercial product suppliers ranging from Amazon.com to Dell Computer, the historically conservative automation market has resisted the Internet revolution until only recently,’ Clayton said. ‘This resistance finally gave way in 1999, however, as suppliers began embracing Web sales initiatives in earnest.’

The new study shows that although Web acceptance still lags behind the commercial markets, increasing numbers of automation suppliers are realizing the necessity of adopting an e-business strategy incorporating Web sales. Consequently, the Internet is fast becoming the hottest distribution channel for automation products.

It is also quickly changing the way automation suppliers interact with their customers, their business partners, and their own internal knowledge and communication channels.

Larry O’Brien, ARC’s Director of Research, Automation Systems & Solutions, said, ‘Internet-based ordering systems from major suppliers such as Rockwell, Fisher-Rosemount, Siemens, and Honeywell offer users an easily accessible alternative to traditional sales channels for purchasing many low-end automation products and obtaining technical documentation and customer support information, 24 hours a day, 7 days a week.’

ARC has determined that most leading automation suppliers already offer procurement of MRO services over the Internet and have begun adding low-end automation product procurement on their Web sites.

Clayton said, ‘Companies such as automationdirect.com and Software Toolbox see the Internet revolution as an opportunity to gain market share from traditional market leaders. They are using their small size and their focus on software and low-end automation products to offer customers the most convenient and economical means of ordering products, as well as the quickest turnaround on orders through fully automated supply chains.’

‘Automation suppliers of the 21st century must be aggressive in linking customers, suppliers, business partners, and employees via the Internet,’ he said. ‘To succeed, suppliers have to be prepared to use the Internet to handle sales transactions and provide customer service, link employees, and improve information flow to and from business partners.’ In ARC’s view, automation suppliers who do not immediately begin developing an effective e-business strategy for sales, marketing, and customer service, will be hard pressed to remain competitive.

You can read an overview of the study and a press release on the ARC web site: http://www.arcweb.com

The new web sales study is available from ARC for $4,500 USD.