Back in mid November I blogged about the Spectris acquisition of N-TRON and commented on how I would not be surprised if there was going to be increased M&A activity in the coming months and years.
Although I had no inside track on this most recent development I can say it did not come as a total surprise either. Frankly I thought that RuggedCom would have been the next company scooped up in the wireline networking products Pac-Man game given their strong financial performance and strong portfolio of products. Regardless of the target I would have wagered a small bet that the acquiring would not have been an “industrial” networking products company, but I do not want to tip my hand “too much” on who might be the said acquirer in question.
Belden Hirschmann’s brand through this acquisition has solidified its position as one of the top two dominant players in the wireline Networking Component products segment for use in industrial facilities (based on VDC’s preliminary data).
Although supplier shipments are not yet finalized for VDC’s ongoing 2010 Track 2: Competitive Analysis, Volume 1: Wireline Industrial Networking Products report (ETA 1/2011), it looks like Cisco will retain its #1 position as the share leader in the overall wireline networking component products segment for use in industrial facilities. Included in VDC’s networking components product category are device servers, gateways, modems, routers, and managed and unmanaged switches (this category excludes cables and connectors where Harting is the 800 pound gorilla).
But the real driver for the acquisition appears to be Belden’s desire to expand its presence in the burgeoning smart grid and security solutions segment, in addition to adding a recognized brand of ruggedized networking products including switches, routers, converters, serial communications and security software to its existing portfolio of high-availability networking solutions. GarrettCom also serves markets such as of power generation & distribution, chemical, oil & gas, surveillance and security, other harsh industrial application environments and transportation, market segments in which Belden Hirschmann’s brand has been an active, but not necessarily a dominant, player.
Based on the analysis from VDC’s soon to be published Track 1: User Requirements and Channel Analysis, Volume 1: Wireline industrial Networking Products report the demand for wireline connectivity has never been higher, and the procurement outlook for switches (managed and unmanaged), gateways and routers was seen as being especially robust. VDC's findings, based on feedback from over 300 respondents purchasing and/or specifying wireline industrial networking products, indicated the dominant market segments utilizing wireline networking products included power generation, petrochemical & oil refining, oil & gas, water/waste water and food & beverage users. As an aside, VDC’s soon to be published Track 1: User Requirements and Channel Analysis, Volume 2: Wireless Industrial Networking Products report was even more robust with 540 respondents.
Over my last 13 years at VDC the industrial automation space was statistically the “least dynamic” of the five practice areas for which VDC provides extensive and high quality market intelligence coverage (other practices include enterprise mobility, RFID and AIDC, embedded hardware and embedded software). But in light of all these recent Pac-Man type events and the growing product/technology convergence occurring in the networking segment, it appears that industrial automation space is exhibiting the type of dynamic activity that one may normally expect to see in the enterprise or consumer segments. These are indeed exciting times to be a Senior Analyst covering the industrial automation space.
The exciting discussion on the growing trends towards suppliers embedding switch capability into their industrial automation devices such as PLCs, drives, etc. and the impact on the industrial switch market is a story for another blog on a different day,
Drop me a line if you have any thoughts or questions on which company may be the next networking products takeover target or if you are interested in learning more about our Track 1 report results. Or if you just want to chew the fat on how great the New England Patriots are doing this year, I would love to hear from you.
Comments