A new global report by Schneider Electric exposes the vast financial drain caused by outdated closed automation systems in industry, urging a shift towards open, flexible solutions to boost efficiency and resilience amid evolving market demands.
A new global study conducted by Schneider Electric, a leader in energy and automation, reveals the significant and often hidden financial burdens borne by industrial firms reliant on closed automation systems. The research entitled ‘Open vs. Closed: The $11.28M Question for Industrial Leaders’, undertaken with the analytics firm Omdia, quantifies how such legacy systems siphon off between 7.5% of annual revenue in mid-sized companies to as much as 25% in smaller manufacturers. For large enterprises, this translates into an average loss of $45.18 million each year.
The report sheds light on multiple costly inefficiencies nested within closed industrial automation environments. Among these, the greatest drain arises from operational agility and resilience challenges, amounting to $6.1 million lost due to outdated hardware systems that are inflexible and require expensive modifications. These systems complicate integration efforts and stifle responsiveness, especially crucial in fast-evolving industrial contexts. Additional factors include optimisation and efficiency shortfalls costing $2.28 million, caused by companies having to juggle multiple incompatible platforms that dramatically raise maintenance overheads and increase downtime. Furthermore, $1.2 million is lost annually because of preventable quality failures and inefficiencies in data maintenance linked to siloed information systems that limit real-time access. Finally, sustainability and compliance issues impose $1.7 million in costs as firms retrofit or upgrade hardware to meet evolving regulatory standards.
Drawing insights from interviews with 10 C-suite executives across sectors such as oil and gas, food and beverage, water and wastewater, metals, and manufacturing, alongside a quantitative survey involving 320 participants from sectors including energy, chemicals, mining, metals, and warehousing, the study underscores the broad applicability of these findings. Conducted during September and October 2025, it highlights a common and critical obstacle: hardware complexity. Organisations typically operate across two to over ten different platforms, fostering vendor dependency and requiring specialised technical expertise that stresses already strained workforces facing skills shortages. This fragmentation hampers predictive maintenance capabilities and timely issue resolution, leading to costly downtime and cumulative productivity losses.
The barriers imposed by closed systems are not merely operational but strategic, limiting the agility necessary to adapt to market dynamics. Schneider Electric advocates for a shift towards open, software-defined automation, which is portrayed as a scalable, future-proof solution that modernises legacy infrastructure, accelerates return on investment, and strengthens competitiveness and resilience in industrial operations.
Schneider Electric claims that customers who have embarked on transitioning to open automation platforms are experiencing tangible benefits, often beginning with pilot projects or asset-level trials that expand to full-plant or multi-site deployments. This approach reportedly unlocks fuller data ownership, enhances quality control, and improves cost transparency, all while protecting prior investments.
Gwenaëlle Avice Huet, Executive Vice President of Industrial Automation at Schneider Electric, summarised the imperative succinctly: “Industrial systems must adapt as fast as their markets.” This statement echoes the broader industry sentiment that clinging to complex, closed systems is increasingly untenable for companies seeking to maintain or improve their competitive positions.
In the context of industrial decarbonisation, which requires flexible and integrated control systems to optimise energy efficiency and reduce emissions, the transition to open automation systems could offer additional environmental and regulatory advantages. By enabling better compliance and more effective data-driven decision-making, open automation frameworks may facilitate the operational transformations necessary for meeting ambitious sustainability targets.
Industry data, as presented in the whitepaper and supporting documents, signal that the substantial economic leakage due to outdated automation will only intensify if firms fail to modernise. This places industrial leaders at a crossroads: continue with high-cost, inflexible legacy systems or embrace open automation architectures that promise enhanced agility, cost efficiency, and regulatory readiness in a rapidly evolving industrial landscape.
- https://guardian.ng/business-services/outdated-closed-automation-draining-11-28m-yearly-from-industrial-firms-study/ – Please view link – unable to able to access data
- https://www.se.com/ww/en/about-us/newsroom/news/press-releases/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems-69259900e0e13174a60d9603 – Schneider Electric’s global research, ‘Open vs. Closed: The $11.28M Question for Industrial Leaders,’ reveals that closed industrial automation systems are eroding competitiveness, costing mid-sized organisations an average of 7.5% of their revenue. The study, conducted by Omdia, highlights costs stemming from operational inefficiencies, downtime, compliance retrofits, and delayed production, issues often masked by the perceived reliability of legacy systems. Large enterprises face losses averaging $45.18 million, while smaller manufacturers lose up to 25% of annual revenue. The research underscores the need for transformation, advocating for open, software-defined automation to modernise legacy systems and enhance industrial competitiveness and resilience. ([se.com](https://www.se.com/ww/en/about-us/newsroom/news/press-releases/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems-69259900e0e13174a60d9603?utm_source=openai))
- https://www.se.com/ww/en/insights/next-generation-automation/universal-automation/how-open-software-defined-automation-turns-inefficiency-into-opportunity – Schneider Electric’s research, ‘Open vs. Closed: The $11.28M Question for Industrial Leaders,’ reveals that closed industrial automation systems are eroding competitiveness, costing mid-sized organisations an average of 7.5% of their revenue. The study, conducted by Omdia, highlights costs stemming from operational inefficiencies, downtime, compliance retrofits, and delayed production, issues often masked by the perceived reliability of legacy systems. Large enterprises face losses averaging $45.18 million, while smaller manufacturers lose up to 25% of annual revenue. The research underscores the need for transformation, advocating for open, software-defined automation to modernise legacy systems and enhance industrial competitiveness and resilience. ([se.com](https://www.se.com/ww/en/insights/next-generation-automation/universal-automation/how-open-software-defined-automation-turns-inefficiency-into-opportunity?utm_source=openai))
- https://www.se.com/sa/en/download/document/Schneider_SDA_White_Paper/ – Schneider Electric’s whitepaper, ‘Open vs. Closed: The $11.28M Question for Industrial Leaders,’ presents data and insights from 10 C-suite interviews across industries, including oil and gas, food and beverage, water and wastewater, metals, and other manufacturing. It also includes findings from a quantitative survey of 320 participants in energy and chemicals, manufacturing, mining, metals and minerals, warehousing, and water, wastewater, and waste industries. The document provides detailed analysis and recommendations for industrial leaders to address the challenges posed by closed automation systems. ([se.com](https://www.se.com/sa/en/download/document/Schneider_SDA_White_Paper/?utm_source=openai))
- https://www.globenewswire.com/news-release/2025/11/26/3194869/0/en/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems.html – Schneider Electric’s global research, ‘Open vs. Closed: The $11.28M Question for Industrial Leaders,’ reveals that closed industrial automation systems are eroding competitiveness, costing mid-sized organisations an average of 7.5% of their revenue. The study, conducted by Omdia, highlights costs stemming from operational inefficiencies, downtime, compliance retrofits, and delayed production, issues often masked by the perceived reliability of legacy systems. Large enterprises face losses averaging $45.18 million, while smaller manufacturers lose up to 25% of annual revenue. The research underscores the need for transformation, advocating for open, software-defined automation to modernise legacy systems and enhance industrial competitiveness and resilience. ([globenewswire.com](https://www.globenewswire.com/news-release/2025/11/26/3194869/0/en/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems.html?utm_source=openai))
- https://www.pandct.com/news/new-study-reveals-1128m-annual-opportunity-for-industrial-companies-to-boost-competitiveness – Schneider Electric’s global research, ‘Open vs. Closed: The $11.28M Question for Industrial Leaders,’ reveals that closed industrial automation systems are eroding competitiveness, costing mid-sized organisations an average of 7.5% of their revenue. The study, conducted by Omdia, highlights costs stemming from operational inefficiencies, downtime, compliance retrofits, and delayed production, issues often masked by the perceived reliability of legacy systems. Large enterprises face losses averaging $45.18 million, while smaller manufacturers lose up to 25% of annual revenue. The research underscores the need for transformation, advocating for open, software-defined automation to modernise legacy systems and enhance industrial competitiveness and resilience. ([pandct.com](https://www.pandct.com/news/new-study-reveals-1128m-annual-opportunity-for-industrial-companies-to-boost-competitiveness?utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative is based on a recent press release from Schneider Electric dated 26 November 2025, indicating high freshness. ([se.com](https://www.se.com/ww/en/about-us/newsroom/news/press-releases/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems-69259900e0e13174a60d9603?utm_source=openai))
Quotes check
Score:
10
Notes:
The direct quotes from Schneider Electric’s Executive Vice President, Gwenaëlle Avice Huet, and Omdia’s Principal Analyst, Anna Ahrens, are unique to this report, suggesting originality. ([se.com](https://www.se.com/ww/en/about-us/newsroom/news/press-releases/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems-69259900e0e13174a60d9603?utm_source=openai))
Source reliability
Score:
10
Notes:
The narrative originates from Schneider Electric, a reputable global energy technology leader, and cites Omdia, a respected global analyst firm, enhancing its credibility. ([se.com](https://www.se.com/ww/en/about-us/newsroom/news/press-releases/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems-69259900e0e13174a60d9603?utm_source=openai))
Plausability check
Score:
10
Notes:
The claims are consistent with industry knowledge regarding the inefficiencies of closed industrial automation systems. The study’s methodology, including interviews with 10 C-suite executives and a survey of 320 participants across various industries, supports the plausibility of the findings. ([se.com](https://www.se.com/ww/en/about-us/newsroom/news/press-releases/New-Study-Reveals-11-28M-Annual-Opportunity-for-Industrial-Companies-to-Boost-Competitiveness-by-Modernizing-Closed-Automation-Systems-69259900e0e13174a60d9603?utm_source=openai))
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is fresh, original, and originates from a reliable source. The claims are plausible and supported by credible research, indicating a high level of confidence in the report’s accuracy.
