Blake has worked as a Market Analyst at Interact Analysis since 2017. Covering the markets for low voltage AC motor drives, predictive maintenance, and mobile hydraulics, Blake has developed expertise in automation systems, industrial digitalization, and off highway-electrification.
It’s a common question among drive system builders; is it better to house drives together in cabinets for simplified maintenance and integration, or to have them located close to the motor they’ll be turning? The former method is undoubtedly the most common arrangement, yet the latter approach – decentralization – is becoming favorable across a range of industries and applications.
It’s important to highlight some quirks in the terminology. Decentralized drives refer to individual drives located near to where a process is taking place, usually on a production line. Decentralized architecture, on the other hand, refers to an entire system of drives that aren’t housed in cabinets. They could be wall-mounted, for example. Both wall mounted and decentralized drives tend to require a degree of protection without a cabinet to shield them from dust, water, and other elements. But true decentralized drives are quite distinct from wall mounted drives as they often come in non-regular shapes designed for fixing to a conveyor system (for example) and will usually have a disconnect switch, key switch and I/O built into the drive itself.
Dedicated decentralized drives offer potential reductions in installation costs, through a reduction in the number of components required to install the drive system. They also provide a reduction in panel size and usually therefore save floor space. Configuration of the drive with its associated motor is also simplified, since the two are typically in close proximity to one another.
Yet while dedicated decentralized drives are clearly a niche product, they are gaining popularity in certain industries like food & beverage. What’s perhaps more interesting, however, is the lack of take-up in the US. While the decentralized drive segment of the overall low voltage (LV) AC drives market is comparatively low, the US accounts for less than 10 percent of those revenues in the last four years. Why is that?
The Americas – what’s going on?
The relative lack of take-up of dedicated decentralized drives in the Americas can largely be attributed to one major factor: Rockwell.
Overall revenues associated with decentralized drives were $23.1m in the Americas in 2019, only slightly larger than for APAC. This is primarily down to the preference of US system integrators and end-users to use wall-mounted drives as a decentralized solution, instead of what we now see as dedicated decentralized solutions.
But what does this have to do with Rockwell?
Put simply, it’s a classic case of “if it ain’t broke, don’t fix it.” Seeing as Rockwell – which has major influence over the drives market in the States – does not carry a dedicated decentralized drive in its portfolio, system integrators have instead used wall-mounted drives as an alternative solution. This is compounded further by the fact Rockwell has a huge share of the PLC market – over half – and since many users buy their drives from the same source as the PLC, this also contributes to their overall dominance.
Conveyor applications – which are among the most common to benefit from a truly decentralized approach – require a feedback encoder which is what differentiates wall-mounted performance drives from wall-mounted general-purpose drives. Rockwell accounts for around 32% of this category in the Americas, which accounts for their status as the normal choice for decentralized solutions.
As the region with the highest prevalence for decentralized drives, EMEA will continue to be the largest market for the foreseeable future. The region’s market was worth $282.9m in 2019. It also doesn’t face the same degree of price pressure as APAC, and has a higher degree of diversity among its supplier base than the US. Vendors like SEW, Siemens, Nord and Danfoss are the world-leading suppliers of decentralized drives, and all are based in Europe.
In APAC, there isn’t the same level of brand loyalty. Users focus heavily on price and, as such, this increases buyer power in the region. There is opportunity within the region though; China’s parcel and express delivery sector has invested significantly in automation, seeing decentralization as a competitive advantage. This could be taken as a signal of the high growth potential for decentralized or motor-mounted drive products in the future.
Which leaves the US. Clearly, in a market of that size, there is potential for growth and this is magnified when compared to EMEA, and the take-up of decentralized drives there, for example. Perhaps the introduction of dedicated decentralized drives from a native supplier may be the fuel needed to kick-start the segment.