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Summary

This blog explores the practical realities of cloud adoption in manufacturing, emphasising strategic, incremental migration over wholesale moves.

It highlights the importance of hybrid cloud as a competitive advantage, not a compromise, and shares lessons learned from other industries.

Manufacturers are encouraged to harness the reliability of operational technology with the agility of the cloud.

Read on to learn more about how to empower your manufacturing transformation and unlock greater innovation and value.

Digital Transformation is driving cloud adoption

Whilst historically rooted in on-premises infrastructure, manufacturing is now embracing cloud. The numbers don’t lie: 72% of enterprise cloud decision-makers are planning to adopt vendor-managed multi-cloud container platforms, and 61% of manufacturers are already storing data in the cloud.

Digital transformation is a major part of the agenda and manufacturers are reviewing their application portfolio to understand what can be modernised on the cloud. Your operational technology, the shop floor equipment, the sensors, the real-time control systems aren’t moving to the cloud. They can’t. Low latency matters. Integration with physical equipment matters. These workloads stay on-premises or run at the edge, and that’s the right answer.

However, much of the application portfolio is in fact traditional business applications – finance systems, HR platforms, customer relationship management, supply chain planning. These systems were co-located with your manufacturing operations because that’s how IT was done. But they don’t need to be there anymore, and we’re seeing manufacturers begin to make that shift to a hybrid cloud model.

When fully embraced, usage of cloud provides manufacturers with increased resilience and access to cutting edge services to drive innovation and business agility.

Intelligent manufacturing: the AI imperative

In line with other industries, we’re seeing manufacturers invest heavily in AI, from real-time AI-driven operational support (55%), AI-enabled tools for business applications (52%), and AI-enabled software development (59%).

Gartner predicts that the IoT market will nearly double, soaring from $546 billion in 2022 to $991 billion by 2028. Manufacturing is one of the top five fastest-growing sectors of the IoT market.

And whilst it is possible to run traditional AI models such as computer vision or predictive maintenance models locally if you have sufficient horsepower, the power required to run Large Language Models is simply too great for almost all organisations to justify the cost of investment in hardware. Cloud is the natural home of Generative AI.

Consider Manufacturing Execution Systems as a case in point. Traditional MES platforms monitored and controlled production activities, but they operated in silos with limited predictive capabilities. AI-powered agentic MES changes this fundamentally, these systems can now dynamically reschedule production based on real-time conditions and optimise processes through continuous learning. But delivering these capabilities requires cloud-scale compute for model training, access to foundation models, and integration with enterprise-wide data. The hybrid architecture becomes essential: production execution runs locally with sub-millisecond response times, whilst the intelligence layer leverages cloud capabilities.

Manufacturing’s hybrid reality

To understand why manufacturing requires a fundamentally different cloud strategy, consider the ISA-95 model that has governed manufacturing operations for decades.

This framework separates responsibilities across five levels: Level 4 (business planning and logistics- ERP, PLM, SCM) sits squarely in the IT domain. Levels 0-2 (physical production processes, sensors, actuators, and process control systems) have traditionally been OT’s responsibility. Level 3-manufacturing operations management, including Manufacturing Execution Systems sits precisely at the boundary, where IT and OT must somehow collaborate.

This separation of responsibilities dates from a time when no one imagined machines inside factories would require connectivity to anything outside the building such as cloud. As Forrester notes in their research on bridging the IT/OT divide, this separation has graduated from minor inconvenience to potential dealbreaker as manufacturers make the transition from grease to code.

The challenge is acute. Industrial automation now looks remarkably like office automation – modern factory equipment runs on ARM or x86 chips, Linux or Windows, transmitting XML data over ethernet or Wi-Fi. Yet these increasingly recognisable computers typically aren’t managed by, or even visible to – the IT organisation. They arrive with industrial machines, get configured by equipment vendors, and fall between institutional cracks.

This is precisely why hybrid cloud matters for manufacturing. It’s not about choosing between cloud and on-premises; it’s about orchestrating both to deliver capabilities neither could achieve alone-whilst respecting the boundaries that keep production running safely.

What leaders achieved with hybrid cloud (and how)

Leading manufacturers are already executing hybrid cloud strategies at scale:

Heineken tapped IT networking from Aruba and OT networking from Siemens to deliver an integrated solution at their Hertogenbosch facility. The two vendors cooperated on a solution that reduced duplication, increased standardisation, and simplified workflows. The site engineering manager highlighted the drivers: “To run efficiently and stave off cybersecurity threats, we need uniform visibility and security across our OT and IT.”

Volkswagen Group is working with Amazon Web Services and Siemens to build a digital production platform aggregating data from more than 100 manufacturing plants, eventually expanding to 30,000 facilities across 1,500 suppliers and partners. Combining cloud-based scale with sensors and intelligence deployed locally at the edge, the platform drives greater plant efficiency and uptime whilst supporting VW’s requirement for production flexibility.

Schneider Electric, as part of its smart factories programme, engaged engineers on the factory floor rather than pursuing traditional IT and OT projects in silos. Teams studied plant workflows and asked workers how technology should help them. The message came through clearly: workers wanted easier access to information and technology that augments rather than replaces the human.

The architecture for what’s next

The future of manufacturing – autonomous operations, mass personalisation, micro factories, circular economy, demands hybrid cloud. Not as a transitional strategy, but as the end state. Public cloud alone cannot meet the latency, sovereignty, and reliability requirements. Private cloud alone cannot provide the scale, innovation, and global reach manufacturing needs.

The winners from earlier cloud transitions weren’t necessarily the fastest movers. They were the ones who treated migration as transformation. They used migration as an opportunity to redesign how they delivered services. They adopted cloud-native architectures. They automated what could be automated. They built in proper cost controls from day one, not as an afterthought.

And crucially, they were selective about what they moved. Not everything belongs in the cloud, and pretending otherwise creates problems.

Summary: start small, start now

You don’t need to solve everything at once. The most successful cloud adopters started with manageable wins that built confidence and demonstrated value.

Pick workloads that are straightforward to migrate and where the business case is clear. As you develop expertise and refine your approach, tackle more complex migrations. Cloud adoption isn’t a destination, it’s an ongoing journey.

Moving to the cloud and transforming your business aren’t the same thing. And other industries that raced ahead of manufacturing have learnt this lesson the hard way.

The manufacturers who get this right won’t just reduce costs, they’ll create platforms for innovation that accelerate competitive advantage. They’ll combine the proven reliability of their operational technology with the agility and intelligence of cloud-native systems.

Success belongs to those who stop viewing hybrid cloud as a compromise and start seeing it as a competitive advantage. In manufacturing, the question isn’t whether to adopt hybrid cloud, it’s whether you’ll lead the transformation or follow your competitors who already have.

Empowering manufacturing transformation

The opportunity is there. The path is proven. Time to get started. We’ve guided leading manufacturers through this very journey, helping them unlock the full value of hybrid cloud with tailored solutions that drive real business outcomes.

Drawing on our proven track record, we can help you navigate the cloud conundrum, ensuring your transformation delivers both immediate wins and long-term innovation.

Ready to lead your sector into the future? Get in touch with us today to start your transformation.