Industrial Automation
Industrial Automation Software
The Industrial Software Stack
From the machine upward: what each layer does, who owns it, and how the economics change with distance from the factory floor.
Design and simulationModel the product and the plant before either is built: CAD, PLM, CAE, digital twins
Products: Siemens NX and Teamcenter, PTC Creo and Windchill, Altair, Bentley infrastructure tools
Who owns it: Siemens, PTC, Bentley, Hexagon
Economics: Recurring subscription and ARR; the highest-margin layer
Operations and asset performancePlan, schedule, and optimize production and asset maintenance across the plant
Products: AspenTech, AVEVA, Hexagon asset performance, Roper vertical applications
Who owns it: Emerson (AspenTech), Schneider (AVEVA), Hexagon, Roper
Economics: Recurring; sticky through plant lifecycles
MES and MOMExecute and track manufacturing orders on the floor: genealogy, quality, throughput
Products: Siemens Opcenter, Rockwell Plex and FactoryTalk, Tulip (private)
Who owns it: Siemens, Rockwell
Economics: Mixed license and subscription; the hardware vendors' route upward
SCADA and HMISupervise and visualize live plant operations; historians store the process record
Products: AVEVA PI historian, Siemens WinCC, Ignition (private)
Who owns it: Schneider (AVEVA), Siemens, Inductive Automation (private)
Economics: License plus maintenance; increasingly subscription
Control hardwareRun the machines deterministically: PLCs on discrete lines, DCS in continuous plants
Products: Siemens Simatic, Rockwell Logix, Emerson DeltaV, Mitsubishi and Omron controllers
Who owns it: Siemens, Rockwell, Emerson, ABB, Honeywell, Mitsubishi Electric
Economics: Product margin, but installed bases annuitize into spares, services, and upgrades
Sensing and edgeMeasure what is happening: vision, sensors, metrology, identification
Products: Keyence sensors and vision, Cognex vision, Zebra scanning and Matrox, Hexagon metrology
Who owns it: Keyence, Cognex, Zebra, Hexagon
Economics: Hardware margins, but the best of it (Keyence) earns software-like economics
Software vs Hardware Economics
Trailing twelve month operating margins for a software and vision cohort against a hardware cohort. The roughly 20 point gap is why every large vendor has been buying software.
Software and vision cohort36.3%Hardware cohort16.8%
The Software Convergence M&A Wave
How the hardware incumbents bought their way up the stack, from Siemens and Mentor Graphics in 2017 to the Altair and AspenTech deals completed in 2025.
| Year | Acquirer | Target | Value |
|---|---|---|---|
| 2017 | Siemens | Mentor Graphics | about $4.5B |
| 2018 | Schneider Electric | AVEVA (majority) | combination with Schneider software |
| 2021 | Rockwell Automation | Plex Systems | about $2.22B |
| 2022 | Emerson | AspenTech (majority) | about $6B plus contributed businesses |
| 2023 | Schneider Electric | AVEVA (remaining stake) | about GBP 9.5B enterprise value |
| 2025 | Siemens | Altair Engineering | about $10B |
| 2025 | Emerson | AspenTech (remaining stake) | about $7.2B for the minority |
Industrial Software Franchise Scale
How large the named software books are, in dollars for the bar. PTC and Bentley are ARR; Siemens is recognized software revenue; Rockwell Software and Control is a reporting segment, not a pure software stock.
Siemens Digital Industries: Automation vs Software
Digital Industries total minus the disclosed software line. Software is the smaller slice; implied automation is the rest. Altair sits inside the software book from the 2025 close.
Rockwell Automation Segment Sales
Fiscal 2023 to 2025. Software and Control is controllers plus software, not ARR. Total company sales were 8.34 billion dollars in fiscal 2025 after the 2024 destock.
Industrial software annual recurring revenue growth
Latest disclosed ARR growth rates. Definitions differ by vendor, so the comparable signal is the growth rate, not the dollar stock. AVEVA led this cut at 12 percent.
Emerson Intelligent Devices vs Software
Quarterly split of the two named segments. Software's share of the pair reached about 37 percent in 2026-Q1 after the AspenTech take-private. This is reported segment sales, not ARR.
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