Data Analytics Providers of Overall Equipment Effectiveness Are Deploying Hardware on the Factory Floor to Help Small and Medium Manufacturers Overcome Operational Technology Obstacles

The current market trend for deployment options of Overall Equipment Effectiveness (OEE) is through on-premises solutions, hosted on servers run by the manufacturer and accessed via individual desktops or work cells. This has been the norm for the last 2 decades as manufacturers (depending on the industry) have security and legal concerns about handling data off-site, along with little to no other deployment options over this time frame. In 2024, 69% of OEE deployments were on-premises, with the remainder being Software-as-a-Service (SaaS)-based (see ABI Research’s Manufacturing Data Analytics: Overall Equipment Effectiveness (OEE) market data (MD-OEE-24)). Due to numerous new entrants in the OEE market, this paradigm is shifting, with SaaS-based solutions becoming the dominant deployment method by 2026. In partnership with new entrants in the OEE market, a new trend has been emerging of vendors providing Operational Technology (OT) hardware to accompany the SaaS-based Informational Technology (IT) solutions. Companies such as Amper, Augury, and MachineMetrics are evidence of this change, providing edge hardware to manufacturers that utilize the respective SaaS solutions. The benefit of deploying hardware in tandem with SaaS solutions is to increase the Total Addressable Market (TAM) by including Small and Medium Enterprise (SME) manufacturers into the fold and providing the opportunity to accurately calculate OEE with non-invasive on-premises hardware.

To unpack why data analytics vendors for OEE are looking to deploy hardware on the factory floor in combination with SaaS-based offerings, it is important to understand the pain points of the target audience. Large manufacturers with multiple factories have been long-term users of OEE solutions over the last 2 decades, utilizing top-of-the-line machines, along with competent installations of Internet of Things (IoT) sensors, and edge devices. For the cohort of large manufacturers, data analytics vendors for OEE offering hardware-enabled solutions will not impact operations in any form. The target audience for hardware-enabled solutions are SME manufacturers that look to modernize operations, put data to actionable use, and produce revenue-generating insights from factory floor activities.

The driving forces behind SME manufacturers looking toward vendors that provide hardware-enabled SaaS solutions for OEE are:

• Insufficient Data Capture: The standard method of data capture for OEE calculations are through machine Programmable Logic Controllers (PLC). While all data analytics vendors for OEE will extract data directly from factory floor machines, additional information from edge devices and IoT sensors are secondary in nature. While not explicitly required to calculate OEE percentages, edge devices and IoT sensors are immense data supplements that reinforce the validity of OEE calculations with metrics derived purely from machine PLCs often seen as untrustworthy or non-viable.
• Out of Date Machines: Many SME manufacturers are price sensitive and do not operate top-of-the-line machines. It is not uncommon for SME manufacturers to utilize human-operated machines that are 20+ years old and have no connectivity with SaaS-based applications. This poses a huge challenge from an OT perspective, as significant investment in new machines with the capabilities to feed data into cloud-SaaS based applications does not come cheap.
• Lack of Expertise: Similar to how the largest selling point of SaaS solutions are the negligible Information Technology (IT) overhead paid by the manufacturer as updates and new deployments are handled by the supporting vendor, SME manufacturers are not known for deploying solutions that require extensive knowledge, training, or expertise. SME manufacturers are ambivalent and sometimes adverse to change unless strictly required, and this sentiment about new technology is only exacerbated when correct implementation of IoT sensors or edge devices is not a guarantee.

Global revenue for OEE solutions will grow from US$1.8 billion to US$6.3 billion over the next decade at a Compound Annual Growth Rate (CAGR) of 13.2% see ABI Research’s Manufacturing Data Analytics Market Trends: Overall Equipment Effectiveness (OEE) Market Data Overview: 4Q 2024 (PT-3340)). While this growth will come from multiple facets, including the increasing demand for prescriptive and predictive analytics, which is underpinned by OEE, SME manufacturers adopting SaaS-based hardware-enabled OEE solutions will have a significant impact. Over the next 10 years, the number of factories deploying OEE solutions will increase 2.5X, with an installed base reaching over 1.1 million (MD-OEE-24). To capitalize on the large growth of the OEE industry over the next decade, vendors must be as flexible and accommodating with solutions as possible. The OEE market is a fragmented group of over 40 vendors, all with below 10% of global market revenue share. In order to stand out and be distinguished from the pack, providing OEE calculations to large manufacturers that already have the appropriate OT and IT infrastructure to deploy solutions will not be enough. Offering SaaS-based hardware-enabled OEE solutions to SME manufacturers will open up a new client base with a strong desire to modernize and increase transparency into factory floor operations.

Companies such as Amper, Augury, and MachineMetrics are utilizing this Go-to-Market (GTM) strategy of deploying SaaS solutions, along with factory floor hardware, to cater to SME manufacturers without compromising the existing user base of large enterprise. Moreover, public case studies and research interviews from ABI Research have uncovered that vendors providing hardware-enabled SaaS solutions to SME manufacturers have significant scaling potential, allowing supplying vendors to grow in tandem with the end-using manufacturer. OEE-capable vendors such as Aptean, Crosser Technologies, InfluxData, Itanta Analytics, Limble, and   MaintainX should strongly consider rolling out solutions that incorporate hardware to enhance the data gathering capabilities of manufacturers that do not typically meet the requirements to accurately calculate OEE. In doing so, vendors will be able to extend their reach and supply OEE calculations to manufacturers that may not think they are ready to undertake notable IT and OT changes.