Software-Defined Automation-as-a-Service Drives New Opportunities for the Cloud Ecosystem

For industrial automation suppliers Siemens, Emerson, and now Schneider Electric, Software-Defined Automation (SDA) has become an opportunity to introduce annual subscriptions to their repertoire. Subscription licensing offers a transition of control expenditure from fixed assets to operating expenses for manufacturers. While industrial control moves to the cloud with Emerson, Schneider Electric, and newcomer ConSynSys offering cloud-based, as-a-Service solutions, it coincides with what may be an overexcited Artificial Intelligence (AI) build-out. SpaceX-owned xAI is leasing out unused data center capacity, calling into question the amount of cloud computing needed by these companies for their models.

Industrial automation will continue to become software-defined, with manufacturers taking on new systems to drive greater flexibility in their operations. As manufacturers become more comfortable with digital solutions, the next step is to move into the cloud. Production software further up the automation pyramid has spearheaded this movement, with Manufacturing Execution Systems (MESs) making their way to the cloud as well. The growth of cloud automation systems provides a new opportunity for Cloud Service Providers (CSPs).

At the same time as manufacturing heads to the cloud, major AI builders that have been building data centers seem to have hit a wall. Between the xAI-Anthropic deal, and Meta considering selling its infrastructure capabilities as Meta Compute, laggards in the frontier model market share may end up with too much capacity on their hands, and a growing interest in cloud-based automation may be a good place to park it.

While Industrial AI may appear to be a boon for CSPs to make greater headway into manufacturing, the overall trend is pulling AI out of the cloud toward the edge. For the evolving architecture of SDA, the converse is true, with more industrial automation suppliers looking toward hyperconverged infrastructure to power virtual control. Secure, private clouds from reputable providers could become important partners for the future of automation, especially as they move toward an as-a-Service model.

CSPs are positioned to capture this trend because cybersecurity and flexibility are already necessities of the business, and reducing unsecured surface will become mission-critical to SDA adoption, even as software exposure increases. At the very least, there will be a race to capture its share of hybrid infrastructure.