By: Editorial Desk (Based on the HMS Networks Annual Report) June 26, 2026 In the rapidly evolving landscape of factory automation, the backbone of production—industrial communication—is undergoing a definitive transformation. The latest annual market analysis from HMS Networks, now in its twelfth consecutive year, provides a comprehensive snapshot of how machines and devices communicate in 2026. As Industrial Ethernet solidifies its dominance and legacy fieldbus systems continue their steady decline, the industry is reaching a critical inflection point where the focus is shifting from simple connectivity to the complexities of data security and architectural integration. Main Facts: The 2026 Landscape The 2026 report reveals a market that has successfully moved past the supply chain volatility of previous years. Following a period of stabilization in 2025, the industrial networking sector is back on a growth trajectory, with an anticipated compound annual growth rate (CAGR) of approximately 7.7% for newly installed nodes over the next five years. The most striking headline is the continued ascendancy of Industrial Ethernet, which now accounts for a staggering 79% of all newly installed nodes globally—a significant leap from the 76% recorded in 2025 and a monumental shift from the mere 34% observed when HMS Networks first began its tracking in 2015. Conversely, the era of traditional fieldbus technology is effectively closing. These systems now represent only 14% of new installations, down from 17% in the previous year. Wireless connectivity remains a steady, niche pillar of the ecosystem, maintaining a 7% market share, largely driven by the specific needs of mobile robotics and inaccessible sensor environments. Chronology of a Transformation To understand where the industry is going, one must look at the path it has traveled. The journey from 2015 to 2026 reflects a broader digital transformation of the manufacturing floor. 2015–2020: The Foundation of Ethernet. During this period, the industry began a concerted effort to move away from disparate, proprietary serial communication protocols. The adoption of Industrial Ethernet protocols like Profinet and EtherNet/IP began to accelerate as the need for higher bandwidth and integration with enterprise-level IT systems grew. 2021–2023: Acceleration and Convergence. The push toward Industry 4.0 necessitated "smarter" machines. Industrial Ethernet became the standard for new capital expenditure projects, while legacy systems were increasingly relegated to maintenance-only roles in older facilities. 2024: The Stagnation Point. A period of economic headwinds and supply chain constraints slowed the pace of new installations. Inventory bloat in highly automated sectors forced a momentary pause in growth. 2025–2026: Stabilization and Maturity. The market has regained its footing. The focus has shifted from mere protocol adoption to the "what’s next" phase: integrating cybersecurity, TSN (Time-Sensitive Networking), and IT/OT convergence into existing Ethernet-based infrastructures. Supporting Data: Protocol Dominance and Decline The market for wired industrial networking is now characterized by intense consolidation. The top three Ethernet protocols—Profinet, EtherNet/IP, and EtherCAT—now command approximately 75% of the total wired market. Industrial Ethernet Breakdown Profinet: Continues to lead the pack, growing its share to 30% (up from 27% in 2025). EtherNet/IP: Maintains a strong second position, reaching 25% (up from 23%). EtherCAT: Displays robust momentum, climbing to 20% (up from 17%). Others: Modbus TCP remains stable at 5%, while CC-Link IE holds 3%. Powerlink has seen a decline to 1%, reflecting the market’s tendency to favor the dominant three. The Fieldbus Contraction The decline of fieldbus is no longer a slow bleed but a structural transition. Profibus, once the undisputed king of the factory floor, has fallen to 4% of the new installation market, with total new node counts dropping by roughly 9% year-over-year. Modbus RTU remains the sole exception to the general decline, holding steady at 3% due to its ubiquitous, low-cost application in simple serial-to-digital sensor integration. The Wireless Plateau Wireless technology remains at 7%. Despite the immense hype surrounding 5G, the "broad breakthrough" in industrial factory automation remains elusive. High costs and the technical complexity of maintaining private 5G network infrastructures have limited its adoption to high-end, specialized use cases, such as large-scale automated guided vehicles (AGVs) and autonomous mobile robots (AMRs). Official Responses and Strategic Outlook Magnus Jansson, Director of Product Marketing at HMS Networks, highlights the philosophical shift occurring within the engineering community. "Twelve years of market analysis tell a remarkably consistent story," Jansson notes. "The conversion from fieldbus to Industrial Ethernet is now in a late phase. We are reaching a point where almost everything relies on Ethernet. Consequently, the discussion is shifting from ‘Which protocol?’ to ‘What sits on top of that protocol?’" According to Jansson, the industry is pivoting toward higher-level challenges: functional safety, cybersecurity, and the integration of IT/OT systems. "Protocols remain important," he asserts, "but they are becoming the invisible infrastructure. The real value—and the real complexity—now lies in the layers above the physical and link layers." The HMS report underscores that cybersecurity is no longer an optional add-on. Nearly 50% of surveyed industry professionals identify it as a primary integration challenge, and a massive 93% expect profound changes in OT (Operational Technology) cybersecurity practices over the next five years. Regional Variations The global market is not monolithic, with different regions showing distinct technological preferences: Europe: Continues to be a battleground for Profinet and EtherCAT. However, the region is also at the forefront of implementing Advanced Physical Layer (APL) for process automation and Single Pair Ethernet (SPE), driven by the need to digitize sensor data at the edge. North America: Remains the stronghold for EtherNet/IP. The focus here is increasingly on regulatory compliance, with firms aligning their networking architectures with standards such as the Cyber Resilience Act and IEC 62443 to combat rising threats. Asia: Profinet and EtherCAT are experiencing rapid growth in the Chinese manufacturing sector. Simultaneously, CC-Link IE maintains a strong foothold, particularly as it was the first protocol to natively integrate Time-Sensitive Networking (TSN) capabilities. Implications: The Road Ahead The findings for 2026 offer a clear roadmap for manufacturers, systems integrators, and technology providers. The Death of "Protocol-Centric" Thinking: Companies that build their business model solely around proprietary protocol support are facing diminishing returns. The industry is moving toward open, Ethernet-based standards where interoperability is the baseline expectation. Cybersecurity as the New Default: With 93% of industry experts expecting major shifts in OT security, hardware manufacturers must move toward "security-by-design." Future-proofing a factory floor now requires hardware that can handle encryption and authentication at the node level. The Rise of Specialized Connectivity: While general fieldbus use is dying, specialized physical layers like APL and SPE are emerging to handle the massive influx of data from IIoT sensors. These technologies will be the primary growth engines in the next decade, enabling "the intelligence of things" rather than just the "connectivity of things." Data as the Currency: As Ethernet provides the bandwidth, the focus shifts to how that data is managed. The industry is moving toward a future defined by the convergence of IT and OT, where the ability to securely move data from a machine sensor to a cloud-based AI analytics platform determines competitive advantage. As HMS Networks begins its 2027 study, the message is clear: the physical connection of machines is a solved problem. The next decade will be defined by how that connection is secured, how it facilitates data-driven decision-making, and how it bridges the long-standing gap between the factory floor and the enterprise boardroom. 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