Siemens is serious about building out its IoT platform, Mindsphere, on it way to realizing the vision of the technology supplier of digital transformation in manufacturing. How else to describe the €0.6 billion (or about $700 million) acquisition of Mendix, a popular low-code application development platform.
Mendix, which was founded in the Netherlands but now has its headquarters in Boston, will continue to operate as usual and keep its name, but Siemens notes that it will also use the company’s technology to accelerate its own cloud, IoT and digital enterprise ambitions.
“As part of our digitalization strategy, Siemens continues to invest in software offerings for the Digital Enterprise. With the acquisition of Mendix, Siemens continues to add to its comprehensive Digital Enterprise and MindSphere IoT portfolio, with cloud domain expertise, cloud agnostic platform solutions and highly skilled people,” said Jan Mrosik, CEO of Siemens’ Digital Factory Division.
Mendix’s service is already deeply integrated into IBMs’, SAP’s and Pivotal‘s cloud services. Mendix co-founder and CEO Derek Roos notes that his company and Siemens first discussed a strategic partnership, but as those talks progressed, the two companies moved toward an acquisition instead. Roos argues that the two companies’ visions are quite similar and that Siemens is committed to helping accelerate Mendix’s growth, extend the company’s platform and combine it with Siemen’s existing MindSphere IoT system.
“If you’ve ever wondered which low-code platform will have the viability to invest and win in the long term, you no longer have to guess,” Roos writes. “This commitment and investment from Siemens will allow us to accelerate R&D and geo-expansion investments significantly. You’re going to see faster innovation, more reach and an even better customer experience from us.”
Over the course of the last few years, ‘low-code’ has become increasingly popular as more and more enterprises try to enable all of their employees to access and use the data they now store. Not every employee is going to learn how to program, though, so tools like Mendix, K2 and others now make it easy for non-developers to quickly built (mostly database-backed) applications. (See my last post on ERP and “consumerization”.)
Here is a longer explanation from Roos’ blog:
As the world around us gets increasingly connected, organizations are facing increasing challenges to cope with vast amounts of data and customers are increasingly expecting entirely new experiences and interactions. New technologies like VR, IoT and AI will drive an incredible convergence between the digital and physical worlds, creating entirely new industries and business moments in which people, data, businesses and things work together, dynamically.
This, once again, will put more pressure on business/IT organizations to adapt and change how apps are built and consumed, in ways that few can comprehend right now. And just like we’ve done for web and mobile applications, we also intend to set the direction and lead the market for our customers in this new era.
And this is where Siemens comes in.
As one of the world’s largest industrial powerhouses, there are few companies on the planet that are dealing more mission-critical data and better positioned to blur the lines between our physical and digital worlds. With millions of connected devices and systems, operations in more than 200 countries, and more than 15,000 software engineers, Siemens has access to know-how, expertise and reach few others can match. Even fewer software companies can attempt to compete with such scale in ‘things’.
Siemens has been on a mission to leverage its foothold and data-rich infrastructure in the physical world, to become a leader in the digital world, investing over $10B in the last decade to acquire and build out software businesses, and to create the Industrial IoT platform, MindSphere.
Our two teams first met over a year ago and what started as a discussion about a strategic partnership, gradually evolved into a much bigger vision. The more time we spent together, the more we realized how our visions were aligned. Together with Joe Kaeser, CEO Siemens AG, Jan Mrosik, CEO Digital Factory Division, and Tony Hemmelgarn, CEO PLM Software, we identified three strategic areas where we could win together:
- Accelerate Mendix’ leadership in low-code by doubling down on R&D investments and geographical expansion: By becoming a part of Siemens, we will be able to access an even bigger investment than going public, and we will immediately get access to an enormous global infrastructure that would take much longer to stand-up ourselves. We are committed to extending our leadership in low-code and will significantly accelerate investments in R&D, Customer Success and global expansion.
- Combine Mendix and MindSphere to create the digital operating system for the physical world: With billions of intelligent devices and machines connected to the cloud, organizations will require a new kind of platform to turn these massive amounts of data into real-time business value. By combining Mendix and MindSphere, we will be in a unique position to bridge the physical and digital worlds.
- Extend the Mendix platform to develop world-class and deeply integrated industry SaaS solutions: Becoming a part of Siemens gives us unprecedented access to deep industry know-how, network and expertise. Together with our partner ecosystem, we’ll be able to extend the Mendix platform with deeply integrated vertical solutions across a wide range of industries. Combining low-code with best-practice solutions and templates will provide even more value and speed to market for our customers.