The SCADA market is projected to grow at a CAGR of 6.01% during the forecast period to reach a market size of US$34.519 billion by 2027, from US$22.946 billion in 2020.
SCADA (Supervisory Control and Data Acquisition) consists of multiple computers, user interfaces, and networked data communications for the monitoring machines and the operation processes. The control system with the integration of hardware and software elements enables firms to regulate and monitor the operational processes either locally or remotely while monitoring, collating, and analysing data in real time. Further, the system directly interacts with devices such as pumps, valves, sensors, motors, and the human-machine interface software. The demand for SCADA in is high in industrial enterprises, since it not only aids in the rapid processing of data rapidly, which helps in smart decision-making but also aids in communicating the issues among systems to alleviate downtime, while also maintaining high efficiency. SCADA offers multiple advantages, like interoperability, communications, scalability, and support, which attract a diverse set of firm owners, like oil and gas, transportation, recycling, energy, food and beverage, and many others, enabling them to adapt these systems as their foundation. The SCADA market is segmented based on architecture, component types, end-user industry, and geographical regions.
The rise of IoT and Industry 4.0 to augment the growth of the market
The integration of IoT and SCADA aids in enabling an overall understanding of the operational processes in their entirety, in a much more convenient manner. Conventionally, SCADA requires the manual generation of analytic reports, but with this integration, the process can be automated efficiently to get quality insights in lesser time. With the arrival of IoT, modern SCADA witnessed an upgradation with several appealing metrics like data analytics and scalability, hence, improving the overall market for SCADA. With the increasingly stringent requirements for compliance, the demand for effective production processes, product quality, and supply chain, along with the need for constant process optimization are adding fuel to the growth of the market. Similarly, the growth of digitalization is another factor fuelling the growth in the market. For instance, according to a survey conducted by SAP SE back in 2020, of the total 400 C-level healthcare executives across the world, about 70% showed a willingness to digitization of their operational processes. It is believed that achieving real-data insights are crucial for future value-based businesses.
Multiple strategic deployments by the public as well as private firms in the market to drive growth
To meet the growing demand for operational process management and data analytics, many firms have been gearing up their statistical approaches to enhance their operations as well as their presence in the market. For instance, PVVNL (Paschimanchal Vidyut Vitran Nigam Limited), which is a power distribution company, in September 2021, announced its plans to launch a SCADA service in Noida to enhance its network reliability, improve consumer satisfaction, reduce costs, and improve safety standards of the workers. Another example of this is the launch of a GEO SCADA service in July 2021 by Schneider Electric, which is a global provider of digital transformation in energy management and automation. This technology was launched as a managed service to help the consumer share the responsibility of maintaining and managing its telemetry system along with Schneider. Further, this service also aids in enhancing the architecture of internal support, which leads to the facilitation of the domain experts to focus solely on the development of the estate.
The continuous decline in oil prices causes restraint in the growth of the market
The prices of oil and gas prices have been on a decline globally since 2011. Due to this decline, the oil and gas companies have witnessed a dip in revenue, profits, as well as operating margins, leading to a decline in capital investments toward infrastructure projects. Process automation is a part of such infrastructure projects as the construction of the new pipeline, hydrocarbon exploration, and development of refineries. Thus, the decline in capital investments has affected the overall process automation and the instrumentation ecosystem. This volatility in the prices of oil is anticipated to affect infrastructure investments since it lowers investment returns. Therefore, this factor makes a high impact on the SCADA market and is thus, restraining the growth of the market as the oil and gas industry is a key end-user of SCADA systems.
The COVID-19 pandemic slowed the SCADA market down. The mandated lockdown and social distancing, along with the subsequent closure of production facilities across the world due to inclining active cases affected the productivity of several firms negatively. The lack of manpower, stringent border controls, reduced air transport availability, and port closures, were a few factors that adversely affected the market and caused a slowdown. As a result, these factors led to a recession in the economy worldwide. Due to limited funds amidst this crisis, many projects were paused at future dates, hence, decreasing the market growth. However, post the pandemic, the market is beginning to show positive growth owing to growth in demands for semiconductors in multiple industries to meet the demand for rapid adoption of automation.