Acquisitions Impact the Manufacturing Shop-Floor Software Market

Natick, Massachusetts - GE Fanuc, Rockwell Automation, Honeywell, Brooks Automation and Agilisys have expanded their manufacturing execution system (MES) portfolio through the recent acquisitions of leading shop-floor software vendors. With these global giants positioning themselves to provide end-to-end solutions, what will the impact be on smaller players in the market?

According to analyst Taylor Smith, "The ability to offer complete solutions will be a competitive differentiator for leading industrial automation providers. However, most shop-floor solutions still require a high level of customization in order to interface with an organizations existing ERP system. These customization requirements will continue to drive demand for smaller, specialized software vendors developing application-specific solutions for integration with leading ERP providers."

In fact, small suppliers with less than 1% market share still make up over 35% of all global shipments.

Global Shipments of Manufacturing/Shop-Floor Control Applications Software by Supplier Share (Percent of Revenues)

2002 Total: $88.2 million

Invensys: 10.00%

GE Fanuc: 6.90%

Applied Materials: 6.70%

Honeywell Industry Solutions: 6.50%

Rockwell Automation: 5.20%

Motorola: 5.10%

Epicor Software: 4.00%

Brooks PRI Automation: 3.50%

Agilisys: 3.10%

Syspro: 2.80%

QAD: 2.70%

USData: 2.20%

Epic Data: 2.10%

Accu-Sort: 2.00%

COSS Systems: 1.70%

Other: 35.50%

Some of the more significant acquisitions include:

GE Fanuc

- One of the world's leading suppliers of industrial automation equipment, the company recently enhanced its software offerings through the acquisition of leading manufacturing software provider Intellution in November 2002, and Mountain Systems, Inc. in July of 2003. The acquisition improved GE Fanuc's vertical market reach with Intellution's installed base in consumer goods and food and beverage industries.

Rockwell Automation

- Two recent acquisitions to improve the company's production management solutions include Propack Data - a vendor of production management software for the life sciences industries - and Interwave Technologies - a consulting firm focused on manufacturing execution.

- A strong background in providing the hardware needed for industrial automation supports Rockwell's position to be a total solution provider.

Agilisys

- Agilisys' acquired Brain, a German ERP vendor, at the start of 2003 and in June acquired Future Three - a specialist in electronic data interchange (EDI) for the automotive industry.

- The combined installed base of solutions between Agilisys and Future Three thrusts the total number of worldwide automotive implementations to over 2,400 for the new company, forming one of the leading solutions providers for the automotive industry.

Brooks PRI Automation

- The acquisition of PRI Automation in 2002 increased Brook's position as a provider of MES solutions with the addition of Promis - a leading MES for the semiconductor industry.

- While the company may be considered a relatively young player in the manufacturing software market with only about five years of substantial software offerings, Brooks has been catching up fast with numerous acquisitions such as FASTech, AutoSimulations, Domain Manufacturing, and previously mentioned PRI.

Founded in 1971, VDC is a technology market research and consulting firm that specializes in industrial and commercial electronics, computing, communications, software and power systems markets. For further information about "Global Markets for AIDC Systems Application Software, Volume IV: Manufacturing Shop-floor Application Software" contact: Taylor Smith, AIDC Analyst, 508-653-9000, Extension 131, [email protected]

Venture Development Corporation, http://www.vdc-corp.com , 508-653-9000

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