Siemens builds massively gigantic things that overshadow entire towns and cities around the world. Physical things, like a transport system, or a power generation network, featuring wind turbines, for example, or entire industrial estates.
It is one of the largest engineering companies in the world and used to be mainly interested in making physical things – that was its core business.
But lately Siemens seems more interested in the digital world.
Clearly the company has always used software of some kind or other – you simply cannot design and build the humungous structures that they build without all sorts of software systems, from product lifecycle management tools to enterprise resource planning software, and many others, such as design and construction applications.
But in the past year or so, the company has become enamoured of something called MindSphere, its cloud solution for industrial companies.
It seems to have realised there’s a lot of money in it, and is betting on achieving double-digit growth in this part of its business right the way into the next decade.
Siemens generated revenue of more than €1 billion with digital services and around €3.3 billion with software solutions, an increase year-over-year of around 12 percent.
The company points out that this is “considerably above annual market growth of some 8 percent”.Siemens increasingly turning attention to digital enterprise Click To Tweet
The company has devised a plan for the growth of its digital division – the plan’s called Vision 2020.
Joe Kaeser, Siemens president and CEO, says: “The digitalization platform MindSphere is a key element in our Vision 2020’s innovation strategy. It’ll enable us to decisively shape digitalization at our customers and at our own facilities – across all sectors and businesses.”
Siemens says it wants to strengthen its position as a digital company, but in doing so, will it become less interested in designing and building stuff? If everyone disappears into computer software, eventually there’ll be no one left to build the computers.
But it would be difficult for Siemens to ignore the digital enterprise market. For one thing, “digitalisation”, as some call it, is probably the biggest trend in enterprise management globally. And for another, some of the other big companies which could be said to be competitors of Siemens are making lorryloads of money from offering digitalisation services for industry.
“The industrial revolution of our time is digital,” says Andrus Ansip, the European Commission’s vice-president for the Digital Single Market. “We need the right scale for technologies such as cloud computing, data-driven science and the internet of things to reach their full potential. As companies aim to scale up across the Single Market, public e-services should also meet today’s needs: be digital, open and cross-border by design.”
Britain’s exit from the European notwithstanding, it’s the same situation in industry worldwide – what used to be a largely physical, or hardware-related, endeavour is now going through a software craze.
Perhaps it will pass when the software has been built and installed, and engineering companies can get back to engineering things, but even in such industries which you would have proportionately limited application for all things digital, increasingly it seems to be all about the software.