On-line sales of automation products and systems will rocket from $247m last year to nearly $42bn by 2004, a new study suggests.

"Web sales and the implementation of e-business strategies are causing a revolution in the automation business," reports David Clayton, a senior analyst with ARC which produced the study*. "Not too long ago, just having a home page meant an automation supplier was Internet-savvy. However, the rise of commercial Web sites, intranets, extranets, trade exchanges and auctions as critical business tools, is dramatically changing the face of the automation business."

The historically conservative automation industry has been hesitant about the e-commerce revolution until recently. "This resistance finally gave way in 1999," Clayton says, "as suppliers began embracing Web sales initiatives in earnest."

The adoption of e-business is changing the way that companies interact with their customers and business partners, ARC suggests. It is also allowing smaller suppliers to compete more effectively with the industry giants.

"Companies such as automationdirect.com and Software Toolbox see the Internet revolution as an opportunity to gain market share from traditional market leaders," Clayton explains. "They are using their small size and their focus on software and low-end automation products to offer customers the most convenient and economical means of ordering products, as well as the quickest turnaround on orders through fully automated supply chains."

Clayton warns that automation suppliers that do not immediately begin to develop an e-business strategy for sales, marketing and customer service, will find it difficult to remain competitive. "Automation suppliers in the 21st century must be aggressive in linking customers, suppliers, business partners, and employees via the Internet," he says.

* Web Sales Outlook for Automation Products and Systems. Details from info@arcweb.com.