IMS Research, recently acquired by IHS Inc. (NYSE:IHS), reports that the market for distribution automation and smart grid networking hardware in the Americas is anticipated to grow to nearly $1.7 billion in 2012.
Recent acquisitions indicate increased interest from multinational suppliers looking to gain share in North America as well as expand their smart grid portfolios.
Siemens outbid Belden to purchase RuggedCom around the same time of ABB’s purchase of Thomas and Betts. Both of these acquisitions fundamentally change the supplier landscape for important equipment markets serving the smart grid in the Americas.
Senior Market Analyst Donald Henschel comments, “RuggedCom and Thomas and Betts both held important market share within their respective sectors. RuggedCom has been the clear market share leader in North American substation networking hardware, with around 40 percent of the market in revenue terms, while Thomas and Betts is an established name in North America market for medium voltage switching and power quality hardware.”
These acquisitions indicate targeted strategic efforts by established leaders in the utility equipment market in Europe. Differences in the utility grid layout, utility organisation structure and the preference for regionally-established brand names has constrained share growth in this market for multinational grid automation suppliers from outside the region. While Siemens and ABB may have the product range to support most utility needs in the North American market, utilities here are smaller and often require slower, more constant piece-by-piece sales and support than the large nationalised utilities found in most of Europe.
Henschel adds, “ABB and Siemens have demonstrated their focus on the North American market with these purchases, and it will be interesting to see how they make use of the foothold provided by these established North American names. Utilities in North America are used to personal service even on small business, and recognise certain brands as having long track records for such service.”
Further analysis of these issues is included in two current studies from IMS Research. The $700 million smart grid networking equipment market is covered in Smart Grid Networking – Americas – 2012, to be published in July, while switching, power quality, and other smart grid automation equipment are reviewed in the recently published Distribution Automation Equipment – World – 2012.