Operational Technology Market Size, Share & Trends Analysis Report By Component (SCADA, PLC, HMI, MES, BMS), By Connectivity, By Deployment, By Enterprise Size, By Industry, By Region, And Segment Forecasts, 2024 - 2030

Operational Technology Market Trends

The global operational technology market size was estimated at USD 190.95 billion in 2023 and is projected to grow at a CAGR of 10% from 2024 to 2030. The operational technology (OT) market is witnessing substantial growth attributed to its crucial involvement in overseeing essential infrastructure such as power grids, water treatment plants, and manufacturing facilities. This surge is propelled by the rising embrace of Industry 4.0, which depends on sophisticated technologies such as AI, big data, and IoT, demanding real-time data gathering and analysis capabilities from OT systems. 

Moreover, the emphasis on industrial automation to bolster efficiency and safety in manufacturing processes is a significant contributor to market expansion. For instance, in February 2024, Schneider Electric, a French multinational company in digital automation and energy management, collaborated with Red Hat and Intel to announce the release of a Distributed Control Node software framework. The DCN framework promotes an open automation approach, empowering industrial enterprises to expand and innovate for the future. Its emphasis on interoperability and portability provides our customers with the flexibility to customize technology according to their specific business requirements.

With the increasing complexity of industrial control systems, there's a growing need for secure and dependable OT systems to safeguard the integrity and functionality of these intricate networks. For instance, in July 2023, Stellar Cyber, a U.S.-based cybersecurity firm, has unveiled XDR customized for operational technology (OT) environments. This addition strengthens their Open XDR Platform, presenting enterprises with a unified solution for identifying, analyzing, and addressing threats across both IT and OT networks. Equipped with OT-specific threat detection rules, the platform grants visibility into OT networks and devices while furnishing response capabilities such as automated playbooks and manual remediation actions. This advancement fortifies interconnected IT and OT networks against cyber threats in an ever-changing sector.

The increasing adoption of digital technologies in the industrial sector is driving the demand for OT security, which aims to protect industrial control systems from unauthorized access, disruption, and potential damage. As OT systems become more interconnected with IT networks and cyber threats grow in complexity, the necessity for OT security is rising accordingly. Ensuring the protection of OT systems has become crucial in preventing cybercriminals from exploiting vulnerabilities and maintaining the continuity and safety of critical industrial processes such as manufacturing, power generation, and water treatment. As industries embrace digital transformation, the integration of IoT devices and cloud-based solutions further amplifies the importance of robust OT security measures. Proactive monitoring, regular updates, and employee training are integral components in safeguarding OT systems against evolving cyber threats.

Market Concentration & Characteristics

The degree of innovation in operational technology is marked by significant advancements driven by digitalization and automation trends. Innovations in OT encompass a wide range of technologies, such as IoT, AI, cloud computing, and edge computing. These innovations enable real-time monitoring, analysis, and control of industrial processes, leading to enhanced efficiency, productivity, and safety. Furthermore, the integration of OT with IT systems allows for seamless data exchange and decision-making across the enterprise. As industries continue to evolve, the degree of innovation in OT is expected to further accelerate, influencing the future of industrial operations.

As operational technology gains traction and evolves, there is a notable rise in M&A activity as companies aim to consolidate their positions, acquire innovative technologies or talent, and expand their market presence. For instance, in January 2023, Schneider Electric and BitSight Technologies, Inc., a U.S.-based company providing computer security services, announced a strategic partnership to pioneer a global operational technology Risk Identification and Threat Intelligence capability. This strategic partnership aims to bolster security in the face of rising cyber threats targeting industrial and operational sites.

Regulation significantly influences the operational technology market by dictating compliance standards and cybersecurity protocols. Compliance requirements drive investment in OT security solutions, fostering market growth and innovation. However, regulatory changes can pose challenges for OT vendors and end-users, necessitating adaptation to remain compliant. Regulation in the operational technology market drives investment in security solutions and promotes standardized practices, enhancing industry resilience. Despite challenges, regulatory alignment fosters a safer and more secure environment for critical infrastructure operations.

A notable challenge for the market is the emergence of substitute technologies that offer comparable functionalities through different means. For instance, advancements in edge computing and cloud-based solutions provide alternative avenues for data processing and analysis traditionally handled by OT systems. Moreover, the evolution of general-purpose computing technologies and IoT platforms presents alternative methods for managing industrial processes and collecting data, potentially reducing the demand for dedicated OT solutions. While these substitutes may not replicate the specialized capabilities of OT systems entirely, they pose competitive alternatives, impacting market dynamics and demand for traditional OT solutions.

End-users in the market include diverse industries such as manufacturing, energy and utilities, oil and gas, transportation, and logistics. These industries depend on OT systems to automate processes, monitor equipment performance, and ensure operational efficiency and safety. Key applications include controlling production lines in manufacturing, managing power distribution networks in utilities, optimizing refinery operations in oil and gas, and tracking inventory and shipments in transportation and logistics. Overall, OT solutions enhance productivity, reliability, and compliance across various sectors.

Component Insights

The Computer Numerical Control (CNC) segment led the market and accounted for 34.1% of the global revenue in 2023. The high market share of CNC machines is driven by increasing demand across diverse manufacturing, automotive, and aerospace industries. These machines automate complex production processes, thereby improving efficiency and productivity. The growth of the CNC segment is fueled by factors such as the escalating need for manufacturing automation, the adoption of Industry 4.0 technologies, and the rising demand for precision components. Moreover, expansions in the automotive and aerospace sectors contribute significantly to the increasing demand for CNC machines.

The Building Management System (BMS) segment is projected to grow at the highest CAGR of 15.2% over the forecast period. This growth can be attributed to the increasing demand for energy-efficient and sustainable buildings, the rising popularity of smart buildings with remote-controllable BMSs, and the widespread adoption of IoT and digital technologies in the construction industry. BMSs monitor and control various building systems, such as HVAC, lighting, and security, leading to improved energy efficiency, reduced operating costs, and enhanced occupant comfort and safety. The surge in energy-efficient construction projects further boosts the demand for BMSs as they contribute to automating and optimizing building systems to conserve energy based on occupancy and weather conditions.

Connectivity Insights

The wired segment accounted for the largest market revenue share in 2023. The growth is attributed to its reliability and security compared to wireless alternatives, making it indispensable for critical infrastructure applications. Its resistance to interference and hacking ensures the protection and stability of essential systems. Moreover, the scalability of wired networks allows for easy expansion to accommodate new devices and applications without compromising performance. Furthermore, wired technology's cost-effectiveness, requiring less infrastructure and simpler maintenance, is anticipated to maintain its growth trajectory in the foreseeable future.

The wireless segment will witness significant growth in the coming years. The increasing demand for remote monitoring and control of industrial assets is a significant driver as businesses seek more flexible and efficient solutions. Moreover, the development of new wireless technologies, particularly 5G, with higher bandwidth and lower latency, will further fuel the expansion of wireless applications in critical areas such as supervisory control and data acquisition (SCADA), distributed control systems (DCS), human-machine interfaces (HMI), industrial sensors, and predictive maintenance. These advancements are expected to propel the wireless segment's prominence as businesses embrace the benefits of reliable and innovative wireless solutions.

Deployment Insights

The on-premises segment accounted for the largest market revenue share in 2023. The high market share can be attributed to organizations prioritizing on-premises solutions due to the need for greater control over their OT security systems, enabling enhanced protection and customization tailored to their specific requirements. Moreover, concerns surrounding security and privacy when storing data in the cloud fueled the demand for on-premises deployments. As many OT systems are not designed for internet connectivity adds an extra layer of difficulty for potential hackers, making on-premises solutions a favored choice for businesses seeking robust and secure operational technology solutions and thus boosting the segment's prominence.

The cloud segment is projected to grow significantly over the forecast period. Cloud-based solutions offer scalability and flexibility, allowing businesses to easily adjust their systems as needed without being constrained by physical location. Moreover, the rising concern for security in OT systems is addressed by cloud-based solutions, as they offer robust protection in secure data centers. Moreover, the growing adoption of IoT devices in OT systems fuels the demand for cloud-based solutions that efficiently manage and utilize the vast amounts of data generated, ultimately leading to enhanced operational efficiency and safety. This confluence of factors drives the adoption of cloud-based solutions in the OT market.

Enterprise Size Insights

The large enterprises segment accounted for the largest market revenue share in 2023. The high share can be attributed to their complex and critical OT environments and greater resources for investing in OT security and compliance. The segment's growth was fueled by the increasing convergence of OT and IT infrastructure, rising demands for OT security and compliance, and the escalating number of cyber threats targeting OT systems. Businesses opted for OT solutions to achieve real-time visibility into their operations, facilitating quicker problem identification and operational efficiency improvements. These solutions also empowered better decision-making by providing valuable operational data and bolstering safety and security measures, particularly in high-risk industries.

The SMEs segment is poised for significant growth in the operational technology market. OT solutions enable SMEs to enhance efficiency and productivity by automating tasks and processes and reducing costs. Real-time data provided by OT solutions empower better decision-making, optimizing resource utilization, and maintaining a competitive edge. Moreover, SMEs benefit from improved visibility and control over operations, swiftly addressing issues and reducing risks. Enhanced customer service is another advantage, as OT solutions provide real-time data on customer interactions, facilitating quicker issue resolution and improved customer service quality.

Industry Insights

The discrete industry segment accounted for the largest market revenue share in 2023. This growth can be attributed to the segment's diverse industries, including mining & metals, oil & gas, energy & power, chemicals, pulp & paper, and pharmaceuticals, which rely heavily on operational technology. Adopting operational technology enables these industries to automate processes and gather valuable data for optimizing their operations. Moreover, the increasing adoption of automation and digitization, the pressing need to enhance operational efficiency and productivity, adherence to safety regulations, and the importance of data collection and analysis for informed decision-making are driving the segment's growth in the market.

The process industry segment is estimated to grow significantly over the forecast period. The segment's growth is driven by the wide array of industries encompassed within the process industry, including food & beverages, oil & gas, energy & power, chemicals, and pharmaceuticals. These industries rely heavily on operational technology to control and monitor their operations. Moreover, the adoption of operational technology in the process industry segment is further fueled by its ability to enhance resource utilization, minimize downtime, and enable data-driven decision-making. As these industries continue to expand and innovate, the demand for advanced operational technology solutions is anticipated to witness substantial growth, contributing to the overall progression of the operational technology market.

Regional Insights

North America dominated the market and accounted for a 37.7% share in 2023. The region's prominent position in the operational technology market can be attributed to its thriving industrial sectors, including manufacturing, energy, and transportation. These sectors actively embrace operational technology solutions to enhance their efficiency, safety measures, and productivity levels. Moreover, the rising adoption of cloud-based OT solutions, the flourishing growth of the Industrial Internet of Things (IIoT) market, the development of innovative OT security solutions, and the expansion of the OT market into new verticals are driving the growth of the market in the region.

U.S. Operational Technology (OT) Market Trends

The operational technology (OT) market in the U.S. is expected to grow significantly over the forecast period. In the U.S., advancements in technologies such as Industrial Internet of Things (IIoT), artificial intelligence (AI), and edge computing are driving the adoption of sophisticated OT solutions.

Europe Operational Technology (OT) Market Trends

In Europe, a strong focus on sustainability and energy efficiency is fueling significant investment in advanced Operational Technology (OT) solutions across industries like manufacturing, energy, and utilities. This emphasis is driving transformative changes as businesses seek to optimize operations and reduce environmental impact through innovative technologies.

The UK operational technology (OT) market is experiencing significant growth driven by the pervasive integration of Industry 4.0 technologies across industries, heralding advancements in automation, connectivity, and data analytics to enhance operational efficiency and productivity.

The operational technology (OT) market in Germany held a significant share of the European market. Benefiting from the nation's strong industrial base, emphasis on technological innovation, and strategic positioning as a frontrunner in advanced manufacturing, Germany influences OT trends and developments across the continent.

Asia Pacific Operational Technology (OT) Market Trends

The operational technology (OT) market in Asia Pacific is anticipated to register the fastest CAGR over the forecast period. China is anticipated to be the largest market in the region, followed by India and Japan, owing to the rising adoption of smart manufacturing technologies, the increasing demand for cybersecurity solutions, and the proactive government initiatives promoting the adoption of OT solutions. These countries possess substantial industrial sectors and strong governmental support for adopting operational technology solutions. For instance, in July 2023, Dragos, Inc., an industrial cybersecurity company, partnered with Macnica, Inc., a prominent IT distributor in Japan, to introduce Dragos, Inc's advanced OT cybersecurity solutions to Japanese enterprises. The partnership aims to enhance the protection of critical infrastructure and manufacturing control systems of businesses in Japan against cyber threats. Thus, Asia Pacific is poised to offer lucrative prospects and a dynamic landscape for advancing the operational technology market.

China operational technology (OT) market is expected to grow significantly over the forecast period. The nation's rapid industrialization contributes significantly to the anticipated growth of the operational technology market in China. Moreover, government-led initiatives aimed at modernizing infrastructure and promoting innovation in key sectors are expected to further drive this expansion.

The operational technology (OT) market in India is expected to grow substantially over the forecast period. The nation's escalating adoption of digital technologies and a strong emphasis on industrial automation are driving significant growth in the operational technology market in India. Government initiatives such as Make in India further bolster this growth trajectory by promoting manufacturing and technological innovation within the country.

Middle East & Africa (MEA) Operational Technology (OT) Market Trends

In the Middle East and Africa (MEA) region, operational technology trends encompass the seamless integration of OT with IT infrastructure, leveraging advanced connectivity and data analytics to optimize operational processes and facilitate informed decision-making. Furthermore, significant investments in smart infrastructure development and ambitious digital transformation initiatives are fundamentally reshaping key industries such as oil and gas, utilities, and transportation, catalyzing efficiency gains, cost reductions, and sustainable growth across the region.

Key Operational Technology Company Insights

Prominent firms have adopted new launches and developments, followed by expansions, mergers and acquisitions, contracts, agreements, partnerships, and collaborations, as their primary business strategy to increase their market share. The companies have used various techniques to enhance market penetration and boost their position in the competitive industry. For instance, in March 2023, Rockwell Automation, an Automation company in the U.S., has revealed its acquisition of Knowledge Lens, a Bengaluru-based company specializing in services and solutions. Knowledge Lens utilizes digital technologies, advanced data science, artificial intelligence, and engineering expertise to extract actionable business insights from enterprise data. This acquisition marks Knowledge Lens's joining of Rockwell Automation's leading digital services business, Kalypso, which aims to expedite transformative outcomes for manufacturers globally.

Recent Developments

• In February 2024, Wipro Limited, an Indian IT and consulting firm, and International Business Machines Corporation entered an expanded multi-year partnership aimed at developing joint solutions to advance the implementation of robust, reliable, integrated, and enterprise-ready AI solutions. The goal of this collaboration is to make AI consumption efficient, agile, reliable, and sustainable, ultimately driving the adoption of enterprise-level AI.

• In February 2024, GE Vernova, a business unit within General Electric (GE), launched GridOS Data Fabric, a pioneering solution for grid orchestration that addresses the complexities of energy data dispersion and management faced by utilities. This innovative platform integrates energy data from various sources, facilitating coordinated decision-making and supporting grid modernization efforts for a smarter, more resilient energy infrastructure.

• In May 2023, Red Hat collaborated with ABB, a prominent player in electrification and automation technology in Switzerland, to transform industrial edge computing. This collaboration aims to enable agile OT platform architecture and extend operational consistency across hybrid and edge cloud environments with ABB Ability Edgenius on Red Hat Device Edge and Red Hat OpenShift.

• In December 2023, Fortinet, Inc., a cybersecurity company in the U.S., introduced its latest integrated operational technology, services, and security solutions. These enhancements solidify Fortinet's position ahead of the competition in the OT security market. The Fortinet operational technology Security Platform is an inclusive collection of cybersecurity solutions, products, and services tailored for industrial networks. It is bolstered by real-time OT threat intelligence.

Operational Technology Market Report Scope

Global Operational Technology Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global operational technology market report based on component, connectivity, deployment, enterprise size, industry, and region.

• Component Outlook (Revenue, USD Billion, 2017 - 2030)

  • Supervisory Control and Data Acquisition (SCADA)

    • Programmable Logic Controller (PLC)

    • Remote Terminal Units (RTU)

    • Human-machine Interface (HMI)

    • Others

  • Distributed Control System (DCS)

  • Manufacturing Execution System (MES)

  • Functional Safety

  • Building Management System (BMS)

  • Plant Asset Management (PAM)

  • Variable Frequency Drives (VFD)

  • Computer Numerical Control (CNC)

  • Others

• Connectivity Outlook (Revenue, USD Billion, 2017 - 2030)

  • Wired

  • Wireless

• Deployment Outlook (Revenue, USD Billion, 2017 - 2030)

  • Cloud

  • On-premises

• Enterprise Size Outlook (Revenue, USD Billion, 2017 - 2030)

  • SMEs

  • Large Enterprises

• Industry Outlook (Revenue, USD Billion, 2017 - 2030)

  • Process Industry

    • Oil & Gas

    • Chemicals

    • Pulp & Paper

    • Pharmaceuticals

    • Mining & Metals

    • Energy & Power

    • Others

  • Discrete Industry

    • Automotive

    • Semiconductor & Electronics

    • Aerospace & Defense

    • Heavy Manufacturing

    • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa (MEA)

    • Kingdom of Saudi Arabia (KSA)

    • UAE

    • South Africa