IoT Analytics, a leading provider of market insight and competitive intelligence for the Internet of Things (IoT) and Industry 4.0, recently released a follow-up research report titled: “Industrial Automation Virtualization: 2021 Adoption Report.”
In this report, 70 global C-level operational technology (OT) executives from different manufacturing companies were interviewed to understand their views on virtualization in the broader context of industrial automation, especially soft PLCs .
Important insights:
- Software-based programmable logic controller (Soft PLC) May bring the plight of innovators to established companies in the industrial automation field and threaten their hard PLC business.
- Our recent research on this topic shows that the threat of interruption faced by existing suppliers is lower than previously assumed, because customers have stated that they will stick to existing suppliers for soft PLC settings.
Key quote:
- Knud Lasse Lueth, CEO of IoT Analytics said:
“Our new research shows that the prospect of virtual and soft PLCs clearly resonates with potential end users. However, interestingly, the research also shows that industrial end users prefer to buy soft PLCs from existing hard PLC suppliers. This changed our thinking that the industry may be disrupted by new entrants.”
- Sharmila Annaswamy, Senior Analyst at IoT Analytics, added: “In our interview, 74% of respondents stated that they may or are likely to consider using existing hard PLC vendors for future soft PLC/virtualized control settings. Therefore, the most mentioned vendors include The current market leaders of hard PLCs, such as Siemens, Rockwell Automation, and ABB, are not surprising.”
Review our 2020 research on software-based PLC
In December 2020, we published a widely read article titled “Soft PLC: The Dilemma of Industrial Innovators.” Among them, we believe that the rise of software-based PLCs in the industrial world can be compared with the rise of digital cameras in photography, and represents the dilemma of potential innovators for existing companies similar to the infamous Kodak example.
This month, we published a follow-up research report entitled: “Virtualization in Industrial Automation: Adoption Report 2021. ”
Our new research shows that the prospect of virtual and soft PLC clearly resonates with potential end users. However, it is interesting that the study also shows that industrial end users prefer to purchase soft PLCs from existing hard PLC suppliers, thus changing our thinking that the industry may be disrupted by new entrants. Soft PLC vendors will still be innovators, but their chances of disrupting most of the market now seem to be low.
“The prospect of virtual and software-based PLCs clearly resonates with potential end users”
The big picture: the company is digitizing its industrial automation setup
Since 75% of the interviewed companies have developed a dedicated digital strategy, modernizing existing industrial automation settings is clearly the focus of most manufacturers. In fact, according to our survey, one third of the automation budget is now used for digital activities. This includes topics such as connecting different assets, performing data visualization and analysis, upgrading control systems to meet increased data requirements, and modernizing equipment and software.
Selected quotes from OT decision makers on their digital strategy
“We are bridging the gap between the operations of various departments. For example, we are fully digitizing design and operations, including project management, material handling, compliance and certification, operations, maintenance and procurement systems, cost control, planning and reporting.” – Director of Operations of an American oil and gas company
“We have an Industry 4.0 roadmap that is only 30% complete. Our strategy is to integrate all our production tools to increase tool utilization (real-time detection of events) and increase productivity (related to our MES and ERP systems) And AI (to build a large database related to products).” -Vice President of Operations of an American electronics manufacturing company
Virtualization of automated workloads is another key theme for today’s industrial companies. Virtualization separates hardware from software and allows workloads to be executed in a distributed manner from the cloud to remote locations. According to our research, 60% of companies have virtualized some of their storage, visualization, supervisory control and data acquisition (SCADA) or control workloads. Although the virtualization of PLCs (that is, the introduction of software-based PLCs) is not yet a priority for most manufacturers, they realize that this is an option and are considering virtualizing control workloads through software-based PLCs. The shift to virtualized control workloads has of course already begun.
Soft PLC: Stick to familiar suppliers
| Definition of soft PLC
Soft PLC (or software-based PLC) = A control system setting in which the control logic software is partially or completely separated from the PLC hardware, allowing the software to execute control logic workloads (for example, commands to close or open valves) on different hardware.
| Definition of virtual PLC
Virtual PLC = Soft PLC deployed in a virtualized computing environment (that is, on top of a hypervisor).
In our interview, 74% of respondents stated that they may or are likely to consider using existing hard PLC vendors for future soft PLC/virtualized control settings. Therefore, the most frequently mentioned suppliers include the current market leaders of hard PLCs, such as Siemens, Rockwell Automation and ABB, which is not surprising.
The three outstanding companies in our interviews are Honeywell (89% of customers may consider using their soft PLC in the future), Yokogawa Electric and Siemens (both 85%).
Why prefer existing suppliers?
When purchasing virtualized or software-based controllers, the clear first decision criterion is that they need to guarantee high availability, extremely high uptime, and extremely short mean time between failures. This is very important, because the downtime of the controller can cause the entire plant to stop production, which can cause millions of dollars in losses within a few minutes.
Cyber security practices and the ability of internal teams to maintain the system are also important decision-making criteria.
Existing suppliers have mostly proven that their existing automation systems meet these standards, so their solutions are considered to be more credible compared to new players in the market (or a combination of commercial hardware and PLC software) Spend.
Suppliers are preparing for the future
Although any large existing manufacturers have not yet launched software-based PLC products that have nothing to do with hardware, they are taking gradual steps in this direction to “test the waters”.
Examples include:
- Rockwell’s latest Control Logix 5580 simulation software allows users to develop and test control codes in a completely virtual environment without any hardware.
- Siemens has expanded its edge products by introducing the Industrial Edge v1.0 platform, which can perform device management, edge applications and remote software upgrades, even for edge devices with container-based (Docker) runtimes.
Schneider Electric also seems to have taken clues from the market. Under its general automation product portfolio, it has recently launched the software-centric industrial automation system EcoStruxure automation expert platform. Based on the IEC 61499 standard, Automation Expert lays the foundation for open, portable and reliable automation. Automation Expert enables its users to completely separate control hardware and software, allowing control logic to be executed at the edge and in the cloud.
These examples show that the existing participants are active and are developing their systems towards a more modular and virtualized setting in the future.
Conclusion and outlook-customers are calling
When we re-examine our so-called industrial innovator’s dilemma, we no longer think that it represents the true innovator’s dilemma. Existing suppliers are ready, and customers are willing to cooperate with them. At the same time, there are some market innovators (we highlighted Beckhoff and Codesys as two interesting examples in our last analysis; the other is Logi.cals in Austria) that may receive more attention in the near future.
Our latest research shows that manufacturers are actively digitizing and virtualizing their industrial automation systems. In addition to control logic, other workloads such as storage, visualization, and SCADA are also rapidly virtualized.
Our research further shows that industrial automation suppliers do not need to worry about profit dilution when introducing virtualization or soft PLC. In fact, some manufacturers say that they are willing to pay more for soft PLCs compared to hard PLC settings because they are expected to save additional costs in system maintenance and may improve reliability.
