Munich The demands are high: In his new digital strategy, Siemens boss Roland Busch wants to create the leading digital platform for industry with “Xcelerator”. The financial markets do not yet seem convinced, the Siemens share has so far hardly benefited from the announcement of the plans at the end of June. The investors in particular had demanded a digital strategy from Busch.
According to corporate circles, the decisive factor will be whether the platform can be scaled quickly – in other words, whether thousands of customers can be quickly won over for the open system environment. The low-code platform Mendix plays a central role in this.
Low code means with less programming effort than usual. And that means faster. The US subsidiary’s software is a “key building block for more flexibility, openness and interoperability for our customers,” said Siemens CEO Roland Busch to the Handelsblatt.
Siemens wants to use the “Xcelerator” to sell its own hardware and software modules and at the same time connect thousands of external partners. This is how a software ecosystem and a digital marketplace with open interfaces are to be created.
This is where Mendix comes in. With the application, customers on “Xcelerator” can expand and personalize existing Siemens solutions in the future, Mendix CEO Tim Srock told Handelsblatt. “There’s the shell, and I can build a roof on top of it with Mendix — it doesn’t matter if it’s red or blue.”
The American platform enables visual development – users do not write program code, but use standardized modules. The platforms then translate ideas into source code. In this way, customers can easily program their own applications that extend the functionalities of the Siemens software they have purchased.
In the USA, for example, a Siemens customer used Mendix to connect their various IT systems, says Srock. Now, with the help of the app, he can consistently track where parts are in the production process and when they need to be reordered. “Companies can then sell these applications to other customers via Xcelerator.”
Relief for the IT departments
As an example, Srock cites the sustainability platform Sustaira, with whose app companies can determine the CO2 footprint and other values. Mendix and Siemens earn a share of the revenue.
Siemens took over the US company four years ago for 600 million euros. Mendix is one of the pioneers in the field of so-called low-code and no-code programming platforms. With this technology, people should also be able to program apps who have little or no special IT knowledge.
“We provide digital components like Lego bricks – the customer can then build applications from them,” said Srock. The development is possible up to more than ten times faster. Above all, however, the IT departments would be relieved, for which staff was becoming increasingly difficult to find. In addition, experts from the functional departments could be involved at an early stage, not only when the developers have produced a rough draft.
Start-ups as well as large software companies are bustling about in the low-code field. SAP also relies on codes from the modular system, which are intended to facilitate tasks such as the automation of business processes. For the current year, Gartner forecasts that revenue from technologies related to low-code and no-code development will grow by 23 percent to $13.8 billion, with platforms contributing $5.8 billion. According to forecasts, in just three years more than two-thirds of the applications developed by companies could be based on the low-barrier technology.
>> Read also: “Everyone should be able to program” – Why SAP relies on modular code
Mendix sees itself as a pioneer and market leader. More than 4,000 companies worldwide are currently using the platform. Sales are likely to be in the three-digit million range. According to experts, the industry is growing by around 30 percent a year, said Srock, adding: “We are growing faster than the market.”
Busch has already convinced many internally at Siemens of his concept. But there are still skeptics who ask whether Xcelerator will be the big hit. According to an insider, Siemens has already tried to create a central operating system for industry with MindSphere. Others question whether it is right to launch a new brand for most customers.
It is still unclear who will be the winner in the digitization of industry, the large US IT companies such as Microsoft and Amazon or automation specialists who have in-depth industry expertise. At Siemens, optimism has grown in recent years. Even an IT giant like Amazon Web Services (AWS) had to realize that it wouldn’t work without industry knowledge – and is now cooperating with Siemens in many fields.
Siemens and the change to an IT group
Harald Smolak, ex-Siemens manager and now partner at the management consultancy Atreus, also sees good opportunities for the Munich company. “The combination of the traditional product business and the new platform solutions business offers Siemens good opportunities to assert itself in the world market, especially in times of crisis.”
The partnership with Nvidia could also help Siemens. “This makes it possible to raise the Metaverse for industrial customers in automation to the level of a trendsetter in the solution business.”
Above all, Siemens wants to use the graphics and computing power of Nvidia to improve the so-called digital twin. With photorealistic graphics and the help of artificial intelligence, customers should get a digital image of their systems and buildings in real time. In this way, for example, errors can be found and processes can be optimized.
According to company circles, around two-thirds of customers can currently use a slimmed-down digital twin, at least in parts of the chain – for example when designing a product, planning production or checking machines in production. Almost a third should already have end-to-end digitization of these processes.
>> Read also: Siemens wants to create a digital platform for industry – and bring companies into the “metaverse”.
Siemens boss Busch had announced that the company’s software sales should grow by more than ten percent in the next few years. The change to an IT group should also be accelerated with acquisitions. “There are dozens of candidates in the pipeline,” an insider told Handelsblatt.
Mendix is considered by many to be one of the most successful Siemens acquisitions in recent years. The Munich-based company often uses the low-code platform itself. The technology group itself has already developed 400 applications with the help of Mendix, and another 8,400 are in the pipeline.
Especially outside of industry, Mendix has already conquered a strong position. The city of Rotterdam, for example, has developed more than 100 applications using the technology within a short period of time as part of its digitization process. For example, newborns could now simply be recorded by video at the authorities, says Srock. “The administration can handle 30 additional registrations every day, and the citizens also have added value because they no longer have to go to the town hall.”
More: How the chip group Nvidia became the elite partner of German industry.