New Study Reveals $11.28M Annual Opportunity for Industrial Companies to Boost Competitiveness by Modernizing Closed Automation Systems
Hidden cost penalties: closed industrial systems cost mid-sized industrial companies 7.5% of revenue through downtime, inefficiencies, and compliance retrofits every year
Rigid infrastructure slows response: 77% of systems need physical updates; fragmented platforms increase complexity and delay action
Open, software-defined automation offers a way forward: by decoupling software from hardware, it enables faster decisions, real-time insights, and competitive resilience
Schneider Electric, a global energy technology leader, today unveiled new global research titled “Open vs. Closed: The $11.28M Question for Industrial Leaders.” The report reveals that closed industrial automation systems are quietly eroding competitiveness, costing mid-sized organizations an average of 7.5% of their revenue.
The research, conducted by Global Analysts firm Omdia, highlights how these costs stem from operational inefficiencies, downtime, compliance retrofits, and delayed production, issues often masked by the perceived reliability of legacy automation systems. For large enterprises, losses average $45.18 million, while smaller manufacturers face even steeper proportional impacts, losing up to 25% of annual revenue.
Traditional, hardware-defined automation systems, built for static environments, struggle to meet today’s dynamic industrial demands. Their rigidity turns routine updates into costly technical projects, while proprietary architectures limit data access, reducing visibility and responsiveness.
At the core of the challenge is hardware complexity. Most companies operate across 2 to 10+ distinct platforms, each with unique maintenance needs. This fragmentation drives vendor dependency; 30% of issues require specialized support, and this strains workforce efficiency due to niche technical expertise required at a time when companies are facing workforce and skills shortages. Siloed systems also hinder predictive maintenance and fast issue resolution, leading to costly downtime and lost productivity. These inefficiencies scale across operations, limiting agility.
The research underscores an urgent need for transformation. Open, software-defined automation offers a scalable, future-ready solution that modernizes legacy systems, accelerates ROI, and strengthens industrial competitiveness and resilience.
By decoupling software from hardware, manufacturers gain the flexibility to integrate multi-vendor systems, adapt quickly to market shifts, produce small batches efficiently, and close engineering skill gaps. Real-time data becomes actionable, driving smarter decisions, boosting productivity, and reducing costs at scale.
Schneider Electric customers are already realizing these benefits. Many begin with pilot projects or asset-level trials, then expand to full-plant or multi-site deployments, unlocking full data ownership, improved quality control, and greater cost transparency, while protecting existing investments.
“This research echoes what our customers tell us every day: industrial systems must adapt as fast as their markets,” said Gwenaëlle Avice Huet, Executive Vice President, Industrial Automation, Schneider Electric. “It’s particularly encouraging that smaller enterprises, the backbone of our economy, stand to gain the most in annual savings that can be reinvested in innovation and growth. Open, software-defined automation is a proven solution that empowers industrial players of all sizes build resilience, drive innovation, and thrive amid rapidly shifting consumer demands, regulatory pressure and market volatility.”
Key cost areas break down into four critical parts, annually:
- $6.1M in Operational Agility & Resilience losses. Inflexible hardware systems hinder responsiveness to market shifts, as 77.4% require physical modifications for functionality updates, while multiple vendor platforms create integration complexity. Modification costs range from $25K–$50K per hour, rising to $250K/hour for $1B+ companies.
- $2.28M in Optimization & Efficiency costs. Maintenance burdens, downtime, and talent gaps as hardware complexity drives operational inefficiencies. Companies manage 2-10 different industrial systems on average; 29% deploy 10+ hardware platforms, each with unique management requirements.
- $1.2M in Preventable Quality Failure and Costly Data maintenance. Proprietary systems create data silos and limit integration. Only 28% of companies access real-time insights; half report that 20–39% of critical data isn’t available in real time.
- $1.7M in Sustainability & Compliance Costs. Regulatory changes demand costly hardware retrofits, driving up compliance expenses.
Anna Ahrens, Principal analyst, Omdia, added: “In response to mounting pressures, industrial leaders are deploying tactical solutions to sustain their core priorities of growth, competitiveness, and trust. In a world where product lifecycles shrink, supply chains fracture, and talent gaps widen, agility and flexibility aren’t optional. They are survival. Every quarter a business delays addressing the cost of closed automation ecosystems is another $1M+ in lost value: the money that could be reinvested in grow and innovation.”
###
Press contact: global.pr@se.com
Related Spokespeople
Gwenaelle AVICE HUET
Executive Vice President, Industrial AutomationGwenaelle Avice Huet leads the Industrial Automation business for Schneider Electric and has served on its Executive Committee since 2022. She is responsible for Schneider Electric’s global portfolio of automation and control solutions, which revolutionize industrial efficiency using robotics, Artificial Intelligence (AI), IoT, digital tools, machinery, and software.Gwenaelle joined Schneider Electric in 2021 as Senior Vice President of Corporate Strategy, before entering the Executive Committee as Chief Strategy and Sustainability Officer. For two years, she led Schneider Electric’s full business portfolio across Europe as Executive Vice President of Europe Operations, representing the company’s contribution to the development of the EU’s agenda to accelerate Europe’s green and digital transformation.Before joining Schneider Electric, Gwenaelle worked at ENGIE (formerly GDF SUEZ) in various roles, from Senior Vice-President of European and Regulatory Affairs, to leading the Renewable Energies business. In her last role, she was on the Executive Committee of ENGIE, serving as the Chief Executive Officer of ENGIE North America and in charge of the Global Business Line on Renewable Energies.Gwenaelle started her career at the French National Centre for Scientific Research and the French Atomic Energy Commission on nuclear energy before joining the World Bank in Washington, D.C. as a consultant. She also worked for the service of the French Prime Minister within the General Secretary of European affairs with responsibility for energy and competitiveness matters, and as the advisor on energy and climate change for various ministers.Gwenaelle also serves on the Board of Air France – KLM. She holds a degree in Physics and Chemistry from the Ecole Normale Supérieure Paris-Saclay, a post-graduate diploma in Molecular Chemistry from France’s Ecole Polytechnique, and an engineering degree from the Corps des Ponts et Chaussées. She has also been nominated as a Young Global Leader by the World Economic Forum. She is based in Europe.Read more
Attached files
Contact press
Schneider Electric Global Media Relations
global.pr@se.com
Adoption of Wiztrust's Blockchain Certification Platform
From October 2nd, 2019, in order to secure its communication, Schneider Electric certifies its contents on Wiztrust. You can check the authenticity on the website Wiztrust.com for Corporate communications.
