An AVEVA-Like Acquisition That Helps Omron Catch Up
Omron’s US$675 million offer to acquire OnLogic and Interlogic comes at a time fraught with industrial Mergers and Acquisitions (M&A) activity (see ABI Insight “Schneider Electric’s US$23.7 Billion Planned Acquisition of PTC Sends Shots at Industrial Competitors Siemens and Dassault Systèmes” for a recap).
However, Omron's acquisition is a move at the physical layer, not the software layer that industrial automation leaders such as Schneider Electric and Siemens have been busy with. Instead, targeting OnLogic is similar to ABB’s acquisition of Rotork (see ABI Insight “ABB to Acquire Rotork for US$5.5 Billion to Shore Up Intelligent Valve Offering” for more), positioning for the physical grounds of the Software-Defined Automation (SDA) and Industrial Artificial Intelligence (AI) push.
OnLogic management is expected to stay in place and largely operate independently, similar to how Schneider Electric manages AVEVA. Omron’s acquisition would give it access to an Industrial Personal Computer (IPC) manufacturer that has positioned itself for edge AI trends, and recently launched a virtual controller-emphasized IPC, designed for CODESYS.
New Regional Leader in Japan, New Access in the United States
An acquisition like this clarifies Omron's SDA position immensely. Being considered a follower in the SDA market (see ABI Research Software Defined Automation competitive ranking) with an exploratory RedHat partnership that has not seen a public update since 2023 when it launched. Its Sysmac platform is limited in software-defined capabilities as well, so bringing in a company with a CODESYS-native platform makes it more competitive in the SDA race.
Acquiring this native capability gives it access to the SDA market where it has not been able to previously make headway and places it advantageously against its Japanese rival, Mitsubishi Electric, which similarly has no software-defined controller platform. The acquisition also broadens its access to the U.S. market, challenging slow-acting on SDA firms such as Rockwell Automation, with its LogixEdge device for SDA slated to release sometime this year.
Equally beneficial is adopting OnLogic’s Industrial AI strength. OnLogic has not been quiet in its Industrial AI efforts, with dedicated lines of IPCs for Edge AI training and inference. This aligns with Omron’s own strengths in Edge AI, where the Sysmac platform has moved to focus on predictive analytics and Machine Learning (ML) capabilities.
U.S. Automation Players Must Adopt a Serious Posture on Edge AI
For Omron, leaving OnLogic largely independent makes sense. It minimizes operational interruptions, reduces potential for cannibalization and confusion with the Sysmac platform and OnLogic’s, while still benefiting overall from a renewed SDA presence. In the long term, the company’s plan to leverage OnLogic’s control strengths may make it a natural option within the Sysmac platform, as a powerful IPC that can do the functions of a Sysmac controller. The integrations it intends to do in Physical AI through this merger may be challenged in the long run, and being clear as to how integrated OnLogic will be with Omron’s overall Factory Automation platform will be important.
For competitors, this is yet another clear signal that Edge AI capabilities are as important as Cloud AI capabilities. While Model-Context Protocol (MCP) servers and other cloud activities are beneficial to streamlining operations, the real benefits of industrial intelligence will be captured within IPCs that live close to the machine. For U.S.-centric competitors, what was once two fringe players within the country have now become more powerful. Should the acquisition be finalized, Omron will gain a deeper foothold, and OnLogic will benefit from the resources of Omron’s scale.
Colin McMahon
Ryan Wiggin