Software-Defined Automation: Industrial Automation Security and Code Management Capabilities Will Matter Most to Manufacturers in the Short Run

It is still early days for Software-Defined Automation (SDA) technology and solutions, with spending on SDA representing a small percentage of manufacturers’ total industrial automation budgets. Technology vendors are in the process of designing and releasing solutions, alongside charting the course of functionality roadmaps, and most manufacturers are not mature enough in their industry 4.0 automation systems to be comprehensively leveraging many of the current products offered, whether that be centralized automation management platforms, code management tools, or virtual controllers. It is certainly not expected that all automation deployments from here on out will be architected around SDA, with investment in legacy architecture and physical controllers still likely to play a leading role for the rest of the decade. A lot of work remains for industrial automation vendors to significantly transition manufacturers away from traditional automation solutions and architectures over to software-defined technologies.

Manufacturers are facing a market that has increasingly higher demands in product variety and quality. It is now almost a necessity to engage in digital transformation and deploy Industry 4.0 technologies, all while facing a severe shrinkage in the number of skilled workers available to establish these systems. In the industrial automation industry, these challenges are amplified, with legacy automation systems requiring consistent on-site visits to maintain, trying to balance and integrate a range of proprietary automation hardware/software, which is challenging to do across a single factory, let alone the organization as a whole. This is difficult, even if manufacturers can hold onto the talent required to manage existing systems. However, all too many automation engineers are familiar with the feeling of “I shouldn’t touch that machine, X codes that machine,” only to find out that employee has retired. Retirement rates are becoming a significant challenge in manufacturing markets, with 40% of the working populations in Australia, Canada, and the United States forecast to be older than 55 in 2030. The U.S. Bureau of Labor Statistics reported in January 2024 that U.S.-based manufacturers had more than 600,000 unfilled job openings, and this situation does not look likely to improve (for more on manufacturing labor markets, see ABI Research’s Handling the Baby Boomer Exodus in Manufacturing report (AN-6055)). Overall, the results are spiraling costs, delays in production, and erosion of global competitiveness, and most manufacturers are still trying to solve these issues with legacy automation architecture and solutions.

SDA has the ability to meet these challenges, providing the flexibility to allow beleaguered automation teams to construct next-generation automation systems. However, as highlighted, not all manufacturers are ready to simply sign a check and take the plunge with SDA, there is a significant amount of education and value demonstration to go through. Some features of SDA portfolios are far more likely to attract attention and convince manufacturers to invest than others. 

While there are many capabilities and benefits attached to SDA products offered by vendors; not all of them are currently landing as strong reasons for adoption. Many of these solutions and their functionalities are viewed through a lens of “that’s nice to have,” rather than as an essential framework through which to transition toward Industry 4.0. Technology vendors looking to best position their SDA offerings should focus on the following key capabilities to best attract customers:

1. Industrial Automation Security: The ability to keep automation systems up to date and ensuring their security is increasingly critical, especially as these systems become increasingly connected. The threat of and damage from cyberattacks have never been greater for manufacturers. Capabilities such as SOC 2 Type 2, TÜV Certification in accordance with IEC 62443-4-2, and alignment with the proposed Cyber Resilience Act will all be key selling points for solutions. Alongside this, the ability to provide rapid recovery of automation code and production data following an attack or outage and get production up and running as fast as possible is highly valuable.
2. Reusability of Code and Code Management Capabilities: In the face of shrinking automation workforces, the ability to construct and access comprehensive code bases that can support automation projects with drag-and-drop functionality is key for many companies to ensure the maintenance, scaling, and optimization of their automation systems. These code bases represent an essential form of knowledge capture as automation engineers retire from the industry. Furthermore, allowing engineers to track changes, generate documentation, and work remotely & simultaneously can help facilitate a much leaner staff base.   

Such functionality is highly attractive to manufacturers, meeting them where they are now and not requiring a significant overhaul of existing automation architecture. It addresses challenges that are currently top of mind for many companies, with ABI Research’s Industrial and Manufacturing Survey 1H 2024: State of Play for Digital Transformation (PT-3319) highlighting cybersecurity and not enough individuals graduating from university with the requisite skills as the 2nd and 8th out of 21 urgent priorities, respectively. Manufacturers can optimize their existing legacy systems with software-defined capabilities, easing into the idea of deploying more transformative and impactful solutions and priming them to begin greater adoption of SDA frameworks.

The reality is that in the current market state, while highly valuable and something that should be adopted by manufacturers, AI/Gen AI tools, virtual controllers, and hardware independence are not necessarily viewed as essential by customers. Many manufacturers are set in their ways; already committed to a certain brand of controller, not concerned about hardware footprint, and hesitant to hand over coding responsibility to AI/Gen AI tools. Focusing on these capabilities of the SDA portfolio by vendors will make it harder to drive sales traction with customers if they are positioned as the primary point of value.