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Automation suppliers adopt new models for digitalisation

19 October, 2018

Industrial automation vendors are evolving to offer proprietary digital platforms using the Product-as-a-Service (PaaS) business model, according to a new report from Frost & Sullivan. It says that the trend towards digitalisation among end-users is prompting automation vendors to invest in IIoT (Industrial Internet of Things) technologies, and they are now looking to integrate these technologies to complement their conventional automation systems and to give users better control.

“The advent of Industry 4.0 is disrupting the partnership ecosystem in industrial automation, with start-ups and independent software vendors (ISVs) partnering with automation vendors to develop digital capabilities,” says Rohit Karthikeyan, a senior research analyst covering industrial automation and process control at Frost & Sullivan.

“Automation vendors will aim to standardise their portfolios through M&As and partnerships,” he predicts. “The consolidation of their IIoT portfolios will result in the upselling and cross-selling of automation solutions and create fresh revenue streams.”

F&S reports that automation suppliers are forging strategic partnerships with IIoT providers to add value to their offerings and to become a single point of contact for end-users.

The analyst also sees an increasing role for open-source controllers, with the introduction of “app logic controllers” (ALCs) bolstering the market by allowing end-users to download and use apps to control specific applications.

It also detects a shift from hardware to software and services, with vendors making it easier for their customers to shift to digital technologies by using novel business models such as PaaS, pay-per-use and licensing.

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