Nowadays, power systems’ Protection, Automation, and Control (PAC) functionalities are often deployed in different constrained devices (Intelligent Electronic Devices) following a coupled hardware/software design. However, with the increase in distributed energy resources, more customized controllers will be required. These devices have high operational and deployment costs with long development, testing, and complex upgrade cycles. Addressing these challenges requires that a ’revolution’ in power system PAC design takes place. Decoupling from hardware-dependent implementations by virtualizing the functionalities facilitates the transition from a traditional power grid into a software-defined smart grid. This article presents a survey of recent literature on software-defined PAC for power systems, covering the concepts, main academic works, industrial proof of concepts, and the latest standardization efforts in this rising area. Finally, we summarize the expected future technical, industrial, and standardization challenges and open research problems. It was observed that software-defined PAC systems have a promising potential that can be leveraged for future PAC and smart grid developments. Moreover, standardizations in virtual IED software development and deployments, configuration tools, performance benchmarking, and compliance testing using a dynamic, agile approach assuring interoperability are critical enablers.