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SCADA Marketplace

by James G. Barr

Copyright 2022, Faulkner Information Services. All
Rights Reserved.

Docid: 00021127

Publication Date: 2211

Report Type: MARKET

Preview

The term SCADA, which stands for Supervisory Control And Data
Acquisition, refers to a type of computerized control system that monitors
and regulates industrial processes like oil and gas production;
infrastructure processes like water and wastewater treatment; or
facility-based processes like heating, ventilation, and air conditioning
(HVAC). Importantly, SCADA encompasses the principal enabling technologies
behind electric smart grids.

Report Contents:

• Executive Summary
• Market Dynamics
• Market Leaders
• Market Trends
• Strategic Planning
  Implications
• Web Links
• Related Reports

Executive Summary

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The term SCADA, which stands for Supervisory Control And Data
Acquisition, refers to a type of computerized control system that monitors
and regulates:

• Industrial processes like oil and gas production
• Infrastructure processes like water and wastewater treatment
• Facility-based processes like heating, ventilation, and air
  conditioning (HVAC)

SCADA systems form the foundation of SCADA applications. A SCADA
application has two principal elements:

1. The process, system, or machinery to be monitored, which can range
   from an automobile engine to a power plant.
2. A network of intelligent devices that interfaces with the effected
   process, system, or machinery through sensors and control outputs. This
   network, which is the SCADA system, provides the ability to measure and
   control specific elements of the effected process, system, or machinery.¹

SCADA applications can function autonomously, in which case “supervisory
control” is exercised directly by the SCADA applications according to a
set of pre-determined rules. SCADA applications can also function under
human direction, in which case the application provides feedback to a
process operator who then initiates the appropriate actions.

In a larger context, SCADA systems and applications are key components in
“process automation,” performing operations more rapidly than humans can,
at lower cost, and, in some cases, with greater safety and security.

Importantly, SCADA encompasses the principal enabling technologies behind
electric smart grids.

SCADA Vs. IIoT

According to analyst Peter Loshin, “SCADA is sometimes compared with the
industrial internet of things (IIoT), and while there is considerable
overlap, the two terms are different. SCADA vendors tend to provide more
complete, monolithic systems with tight integration across levels and
devices, while IIoT vendors are likely to provide greater interoperability
and more options for deploying systems and devices across an
organization.”²

Importantly, SCADA and IIoT offer complementary capabilities.

Market Dynamics

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Typically, SCADA systems and applications are used to automate complex
industrial processes where human control is either logistically impossible
or impractical.

Figure 1. SCADA Is Instrumental in Electric Generation and
Transmission

Source: altenergymag.com

Use Cases

Major SCADA use cases include:

• Electric generation and
  transmission – Electric utilities use SCADA systems
  (please see Figure 1) to detect current flow and line voltage, to
  monitor the operation of circuit breakers, and to place sections of
  the power grid either online or offline.

• Water and wastewater
  treatment – State and municipal water utilities
  use SCADA to monitor and regulate water flow, reservoir levels, pipe
  pressure, and other critical factors.

• Buildings, facilities, and
  environments – Facility managers use SCADA to
  control HVAC, lighting, and entry/exit systems.

• Manufacturing – SCADA
  systems manage parts inventories for just-in-time manufacturing,
  regulate industrial robots, and monitor process and quality control.

• Mass transit – Transit
  authorities
  use SCADA to regulate electricity to subways, trams, and trolley
  buses; to automate traffic signals for rail systems; to track and
  locate trains and buses; and to control railroad crossing gates.

Market Opportunities

Oil & Gas

Despite climate change concerns and politically-oriented market
manipulations engineered by the Saudis and other OPEC members, the
on-going expansion of oil and gas exploration and related refinery
operations is continuing to fuel SCADA sales. 

Smart Buildings

The increasing demand for “smart buildings,” including “smart factories,”
and, ultimately, smart communities – is contributing to SCADA’s rise.

A smart building is any structure that utilizes automated procedures to
regulate building operations and improve sustainability. These operations
can include:

• Heating, ventilation, and air conditioning (HVAC)
• Lighting
• Access control and security
• Elevators
• Fire safety
• Air and water quality
• Digital signage
• Energy management

With millions of commercial buildings in the US, the opportunity to
replace or retrofit non-smart facilities is enormous, especially as the
effects of climate climate render an overall reduction in energy usage
essential.

Industry 4.0

Characterized by the incorporation of cyber physical systems, the
emergence of “Industry 4.0” or the “Fourth Industrial Revolution” (please
see Figure 2) is accelerating SCADA’s adoption. As defined by the US
National Institute of Standards and Technology (NIST), cyber physical
systems represent “the convergence of networking and information
processing technologies with engineered physical systems.”

Figure 2. Industry 1.0 to 4.0

Source: Wikimedia Commons

According to Shamika N. Sirimanne, Director of Technology and Logistics
at the United Nations Conference on Trade and Development (UNCTAD),
“Industry 4.0 refers to the ‘smart’ and connected production systems that
are designed to sense, predict, and interact with the physical world, so
as to make decisions that support production in real-time. In
manufacturing, it can increase productivity, energy efficiency, and
sustainability.”For example, in a case study of a multinational in the
plastics sector, Industry 4.0, using energy sensors, reduced the power
consumption in one of its plants by around 40 percent, which saved over
$200,000 a year.”³

Market Challenges

Cybersecurity Exposures

While an all-too-familiar observation, it must be said that supervisory
control and data acquisition systems are vulnerable to cyber attacks,
especially as SCADA features a network of vulnerable sensors, computer
systems, and communication links. As with other IT infrastructure, SCADA
providers must convince their customers and prospective customers that
SCADA systems are secure, or risk declining sales.

Financial Investment

SCADA systems can be pricey. Consider just software, for example.
According to Nucleus Command Systems, “Basic SCADA software costs can
range from a one-time fee under $1,000 to over $10,000 just to place a
runtime version on your computer.”⁴

Market Leaders

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In a crowded field, the major firms vying for leadership in the SCADA
market include:

• Siemens (Germany)
• ABB (Switzerland)
• Emerson Electric (US)
• Rockwell Automation (US)
• Schneider Electric (France)
• Honeywell International (US)
• General Electric (US)
• Mitsubishi Electric (Japan)

Market Trends

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Market Expansion

According to multiple market research firms, SCADA providers should enjoy
increasing sales between now and the end of the decade.  Based on the
forecasts of four prominent firms (please see Table 1), the SCADA market
should experience an average compound annual growth rate (CAGR) of around
8 percent.

Cloud SCADA

SCADA is moving increasingly to the cloud. As analyst Paul Balsom
reports, “In a cloud-based SCADA system, sensors report information
wirelessly using cellular or satellite networks. Operators can access the
system from any [locale] using a connected phone or tablet. Cloud SCADA
allows employees at a control facility and maintenance crews in the field
to view the data they need.

“The benefits of a cloud-based system start with constant access to
real-time data. The ability to monitor and control the equipment from any
location means a faster response time to problems. Crews will know about a
water main break within moments, and supervisors can reroute the flow if
possible.

“SCADA in the cloud also comes with cost savings over locally-based
models. The utility doesn’t purchase and maintain a dedicated server or
software. Instead, the SaaS provider handles implementation and upgrades
resulting in lower operating costs and smaller up-front investments.”⁵

Strategic Planning Implications

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In procuring SCADA systems and applications, insist on sufficient
security!

Supervisory control and data acquisition (SCADA) networks contain
computers and applications that perform key functions in providing
essential services and commodities (e.g., electricity, natural gas,
gasoline, water, waste treatment, transportation) to all Americans. As
such, they are part of the nation’s critical infrastructure and require
protection from a variety of threats that exist in cyber space today. By
allowing the collection and analysis of data and control of equipment such
as pumps and valves from remote locations, SCADA networks provide great
efficiency and are widely used. However, they also present a security
risk.

To help mitigate that risk, the US Department of Energy suggests some
essential steps to secure SCADA networks. These steps include:

1. Identify all connections to SCADA networks.
2. Disconnect unnecessary connections to SCADA networks.
3. Harden SCADA networks by removing or disabling unnecessary services.
4. Implement the security features provided by SCADA system vendors.
5. Implement internal and external intrusion detection systems, and
   establish 24-hour-a-day incident monitoring.
6. Perform technical audits of SCADA devices and networks, and
   any other connected networks, to identify security concerns.
7. Conduct physical security surveys and assess all remote sites
   connected to SCADA networks to evaluate their security.
8. Establish policies and conduct training to minimize the likelihood
   that organizational personnel will inadvertently disclose sensitive
   information regarding SCADA system design, operations, or security
   controls.

With respect to item 6, technical audits of SCADA devices and networks
are critical to ongoing security effectiveness. Many commercial and
open-source security tools are available that allow system administrators
to conduct audits of their systems/networks to identify active services,
patch level, and common vulnerabilities. The use of these tools will
not solve systemic problems, but will eliminate the “paths of least
resistance” that an attacker could exploit. Analyze identified
vulnerabilities to determine their significance, and take corrective
actions as appropriate. Track corrective actions and analyze this
information to identify trends. Additionally, retest systems after
corrective actions have been taken to ensure that vulnerabilities were
actually eliminated. Scan non-production environments actively to
identify and address potential problems.⁶

Web Links

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• ABB Group: http://www.abb.com/
• ASIS International: http://www.asisonline.org/
• Emerson Process Management: http://www.emersonprocess.com/
• General Electric: http://www.ge.com/
• Honeywell: http://www.honeywell.com/
• Mitsubishi Electric: http://www.mitsubishielectric.com/
• Rockwell Automation: http://www.rockwellautomation.com/
• Schneider Electric: http://www.schneider-electric.com/
• Siemens: http://www.siemens.com/

References

¹ Bob Berry. “SCADA Tutorial: A Fast Introduction to SCADA
Fundamentals and Implementation.” Version 1.2. DPS Telecom. April 1,
2008.

² Peter Loshin. “SCADA (Supervisory Control and Data
Acquisition).” TechTarget. December 2021.

³ Shamika N. Sirimanne. “What Is ‘Industry 4.0’ and What
Will It Mean for Developing Countries?” United Nations Conference on
Trade and Development. May 3, 2022.

⁴ Ken Baker. “Four Key Questions to Help Keep Your SCADA
Software Costs Low.” Nucleus Command Systems. August 3, 2022.

⁵ Paul Balsom. “Cloud-Based SCADA Delivers Enhanced Security
and Energy Savings with Pump Optimization.” High Tide Technologies, LLC.
August 26, 2022.

⁶ “21 Steps to Improve Cyber Security of SCADA Networks.” US
Department of Energy.

About the Author

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James G. Barr is a leading business continuity analyst
and business writer with more than 30 years’ IT experience. A member
of “Who’s Who in Finance and Industry,” Mr. Barr has designed, developed,
and deployed business continuity plans for a number of Fortune 500
firms. He is the author of several books, including How to
Succeed in Business BY Really Trying, a member of Faulkner’s
Advisory Panel, and a senior editor for Faulkner’s Security
Management Practices. Mr. Barr can be reached via e-mail
at jgbarr@faulkner.com.

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