Industrial automation has begun a structural shift as value moves away from control and toward intelligence, according to a new report from Bain & Company, Industrial Automation: From Control to Intelligence.
By 2030, nearly half of industry revenue is expected to rely on AI-enabled offerings, underscoring how value is shifting toward intelligence. Industrial automation is moving away from traditional control systems toward software, data, and AI, effectively turning the industry’s architecture and profit pools from a “pyramid” into an “hourglass”.
More than 80% of industry profit pools are expected to sit at the two ends of the “hourglass” stack, where software, data platforms and AI-enabled layers are projected to account for more than half of the total profit pool, while smart field devices capture an additional 25% to 30%, leaving the traditional control layer under increasing pressure. Control still matters, but it is no longer the profitable core of the industrial automation industry.
Companies that orchestrate data, software and smart devices at scale are already seeing measurable results. These organizations are achieving productivity gains of 30% to 50%, maintenance cost reductions of up to 35%, and longer asset lifetimes.
“What’s changing is not just the technology, but where economic value is created in the market,” said Adrien Bron, leader of Bain & Company’s Advanced Manufacturing & Services practice in the DACH region. “As software, data and smart devices take on a larger role, industrial automation companies will need to rethink how they maintain and continuously enhance differentiation, where they find sources of scale and leadership, and where they can capture value over time.”
AI-enabled solutions alone could unlock up to $70 billion, a 22% growth in new market value by 2030. Bain analysis shows that a small number of use cases – including adaptive robotics, predictive maintenance and knowledge-based systems – account for a disproportionate share of AI’s upside, with much of that value expected to materialize within the next one to five years. In these areas, AI is no longer a differentiator – it is a prerequisite for market access.
Competitive stakes are rising across the industry. Legacy advantages are eroding faster than many incumbents expect. Competition is intensifying from both ends of the stack, with hyperscalers and AI-native players expanding into industrial software and data platforms, while aggressive hardware competitors are compressing margins in core automation components.
The result for automation incumbents is pressure from above and below
At the same time, switching costs are falling as software decouples from hardware and interoperability improves. The risk is not overnight disruption – it’s gradual irrelevance.
Nearly 60% of incremental industry growth toward 2030 is expected to come from vertical-specific offerings, the report finds. Industry-specific solutions that embed process knowledge, data semantics and regulatory requirements will fuel future growth, as companies prioritize vertical depth over horizontal scale.
As intelligence becomes continuous, value creation is likely to shift from point solutions to lifecycle orchestration. Customers increasingly reward partners who stay engaged beyond commissioning – improving performance in ramp-up, operations and optimization. This favors recurring engagement models and firms that remain accountable for outcomes over time.
As industrial automation evolves toward autonomy, competitive advantage will increasingly depend on the ability to connect software, data and smart field devices into integrated solutions. Companies that can orchestrate intelligence across systems, operations and ecosystems will be best positioned to capture value in the next phase of the industry.
Bain & Company’s Adrien Bron and senior partner Michael Schertler will be speaking at Hannover Messe 2026 on the topic From Pyramid to Hourglass: How AI is reshaping industrial automation profit pools on April 21st. More details can be found here.