IT/OT Convergence - How Big Is It?

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Apr 25

Manufacturers today are witnessing the blurring of lines between information technology (IT) and operational technology (OT). IT/OT convergence refers to the integration of enterprise IT systems with the industrial OT systems on the factory floor. This trend is increasingly on the radar of manufacturing executives and CIOs, promising improved efficiency, real-time insights, and strategic advantages. In this article, we explore what IT/OT convergence is, why it’s happening now, how IT and OT teams are adapting, the impact on operations and strategy, and the market implications – backed by recent data and industry examples.

What is IT/OT Convergence?

Information Technology (IT) typically refers to the hardware and software that manage data, networks, and applications in an enterprise setting. These include business systems like ERPs, CRMs, cloud infrastructure, and enterprise software. Operational Technology (OT) refers to the hardware and software that monitor and control physical devices, machines, and processes on the factory floor (e.g. industrial controllers, SCADA systems, production line equipment). Traditionally, IT and OT have operated in separate domains – IT focused on data and transactions, and OT focused on physical operations.

IT/OT convergence is “the integration of IT and OT technologies, processes, and organizational structures to optimize industrial operations”, according to IoT Analytics. In essence, it means combining IT systems that manage data with OT systems that control physical processes. For example, connecting a plant’s assembly-line sensors and PLCs (OT) with cloud analytics and enterprise dashboards (IT) is an instance of IT/OT convergence. By doing so, companies gain real-time data from operations and can leverage flexible, scalable IT infrastructure to improve those operations. This integration enables better visibility into production, enhances security through centralized monitoring, and increases adaptability of manufacturing processes to changing needs.

It’s important to note that IT and OT historically had different priorities and cultures. IT departments prioritize data availability, agility in software updates, and cybersecurity, while OT teams prioritize safety, reliability, and uptime of equipment. This divergence led to siloed teams – for instance, an IT team might roll out a software patch immediately, whereas an OT team might be wary of updating a production system that is running fine for fear of downtime. IT/OT convergence seeks to bridge these silos so that both sides work in tandem.

Market Impact and Spending Trends

The convergence of IT and OT is also reflected in how companies are allocating budgets and how the market for related technologies is growing. By looking at overall technology spending and the subset relevant to IT/OT integration, we can gauge the scale of this trend:

According to IoT Analytics, the addressable IT+OT convergence market (2023) was about $720 billion, compared to roughly $5.14 trillion in total enterprise IT and OT spending. The chart breaks down enterprise tech spending in 2023 This $720 billion includes approximately $93 billion spent on data center infrastructure in industries with heavy OT footprints, $385 billion on IT software in those industries, and about $242 billion on OT-specific software and hardware (such as industrial automation systems). In other words, while enterprises globally spent over $5 trillion on IT and OT combined, only a share of that (around 14%) represents the addressable market where IT and OT directly intersect. This is the space vendors and organizations are targeting for convergence – things like industrial IoT platforms, integrated software for manufacturing execution, digital twin tools, edge computing, and so forth.

It’s worth noting that the $5.14 trillion figure for total IT+OT spending in 2023 aligns with other estimates of global IT spending. Gartner, for example, reported global IT spending (traditional IT categories) at about $4.7 trillion in 2023. The difference can be attributed to OT expenditures that are not typically counted in IT budgets – for instance, factory equipment and industrial control systems investments. Manufacturing is a significant contributor to this tech spending. Historically, manufacturing (discrete plus process industries) and financial services have been the top spenders on IT, each accounting for a substantial slice of global IT revenues. This means manufacturing firms were already investing heavily in technology; the convergence trend is changing what that technology is and how it’s used (shifting towards integrated platforms, IoT, etc., rather than siloed legacy systems).

Looking specifically at the OT side of the equation, that ~$242 billion OT market in 2023 (software and hardware) indicates how much is being spent on industrial control systems, automation, and related software globally. This segment is now increasingly influenced by IT-driven purchases (for example, buying an industrial IoT software platform is an OT-related decision but often comes from an IT-style budget). IoT Analytics expects this IT/OT convergence market to grow at roughly 8.5% annually – significantly faster than general IT spending growth – reaching around $1.3 trillion by 2030. In fact, the combined IT/OT market influenced by convergence is forecast to surpass $1 trillion by 2027. This robust growth outlook reflects strong demand for technologies that bridge IT and OT: industrial IoT solutions, manufacturing execution systems with AI analytics, cloud platforms for factory data, edge computing devices for real-time control, etc.

IT Vs. OT Budgets

According to Deloitte, Manufacturers are steadily growing their technology budgets. A recent Deloitte study found manufacturing firms spent about 30% of their operating budgets on tech in 2024 (up from ~23% in 2023). Rockwell Automation’s 8th Annual State of Smart Manufacturing Report claims similar numbers with 23% of the operating budget for manufacturers being spent in technology, although this investment varies based on industry.

Traditionally, IT (office/corporate systems) and OT (plant-floor/automation) had separate budgets and teams. Today those lines are blurring. Almost 86% of manufacturing firms report maintaining or increasing their OT budgets in 2024 according to CISCO. Usually to meet cybersecurity and compliance needs. Cybersecurity is now often the #1 investment priority for plant operations, so many companies are allocating more of their budget to integrated IT/OT security platforms. Industry advice is moving toward combined IT+OT budgeting: firms are encouraged to pool governance so that new digital initiatives (like analytics or AI) are funded jointly.. In practice, some companies now have joint IT/OT teams or shared funds for projects, though many still operate parallel budgets for legacy OT and enterprise IT. Overall, the trend is convergence – especially for network and security spending – as manufacturers realize better ROI from a coordinated plan.

What this means?

What this all really means is that manufacturing is no longer treating technology as a support function—it’s becoming a core operational strategy. The line between IT and OT is fading because the problems manufacturers are trying to solve—like real-time visibility, supply chain agility, and predictive maintenance—can’t be addressed by siloed systems. Budgets are following that shift. More spend is being directed to scalable, cloud-based tools and data platforms that span across factory floors and corporate offices. Instead of big one-time equipment purchases, companies are leaning into service-based models that give them flexibility to evolve. And while IT used to handle cybersecurity and OT focused on uptime, today those priorities are shared. This convergence isn’t just a budgeting change—it’s a mindset shift. Manufacturers are waking up to the fact that digital transformation isn’t about picking the right tech—it’s about integrating it, funding it smarter, and making IT and OT speak the same language.