Technology & Breakthroughs

Siemens targets digital businesses

Kaeser: MindSphere is a key element in Siemen’s Vision2020’s innovation strategy

Siemens wants to further strengthen its position as a digital company and achieve double-digit growth in software, digital services and cloud platforms every year through 2020.

 In fiscal 2016, Siemens generated revenue of more than €1billion ($1.06 billion) with digital services and around €3.3 billion ($3.50 billion) with software solutions, an increase year-over-year of around 12 per cent, which is considerably above annual market growth of some eight per cent.

The new MindSphere cloud platform, which Siemens is now rolling out companywide, will also be a growth driver. It will enable Siemens for the first time to offer customers in sectors ranging from industry to rail operation a cloud-based, open operating system for the Internet of Things (IoT).

It will also make it possible to develop and operate apps and digital services. To take just one example: the immense data volumes generated at a production facility or a company can be swiftly and efficiently collected, evaluated and utilised to improve, for instance, system performance and availability.

The new technology also helps customers evaluate and leverage data to achieve new insights. For example, it paves the way for completely new business models such as the sale of machine hours.

“The digitalisation platform MindSphere is a key element in our Vision2020’s innovation strategy. It’ll enable us to decisively shape digitalisation at our customers and at our own facilities – across all sectors and businesses,” said Joe Kaeser, Siemens president and CEO.

To further strengthen its power of innovation, Siemens is planning to increase its investments in research and development (R&D) in fiscal 2017 by some €300 million to around €5billion. Since fiscal 2014, the company’s R&D investments have grown by about 25 per cent. A major part of these additional funds are earmarked for automation, digitalisation, decentralised energy systems and the new venturing unit next 47. Research intensity, which equals the ratio of R&D expenditures to revenue, was 5.9 per cent in fiscal 2016. This figure will further increase in fiscal 2017.

Siemens is working with IBM to further simplify the data analysis functions of MindSphere for customers. The companies are planning to integrate the data analysis service IBM Watson Analytics and further analysis tools into MindSphere. This is designed to give business customers access to visualisation functions and dashboards, while app developers and data analysts will be able to use analytics technologies via interfaces.

Siemens has also improved in the area of patents. As of September 30, 2016, the company’s continuing operations held some 59,800 patents worldwide. At the end of fiscal 2015, the figure was 56,200.