New Leaders in Forrester’s PLM Wave: Why Siemens Will be a Tough Nut to Crack for Dassault and PTC

Meet Siemens Digital Industries Software’s CEO, Tony Hemmelgarn, in an in-depth interview.

It’s full steam ahead for Siemens Digital Industries in the PLM and factory automation areas, both technologically and commercially.

The latter is particularly manifest in the surprising partnership with ERP giant SAP, centered around Siemens’ PLM suite Teamcenter and the decision to coordinate and bet on developing seamlessness between Siemens’ PLM and SAP’s ERP platforms.

Nor has this partnership stopped at the “all talk” stage—it has also resulted in concrete action. Only a couple of weeks ago, these former competitors announced the first major concrete step in their collaboration: new solutions for the cloud, OT (Operation Technology) and real-time based facility management.

However, on the pure technology front, Siemens has also illustrated a number of innovative PLM capabilities centered around electronics, simulation, software integration, IIoT and low-code development. These are a mix of Siemens’ own, organically developed solutions, paired with acquisitions to fill gaps or sharpen their existing capabilities, and aiming at top execution abilities within the framework of the PLM platform Xcelerator. Siemens’ fast pace is second to none in the PLM industry—challenged only by PTC’s aggressive ambitions to narrow down Siemens’ overall lead in PLM and automation technology through buying and integrating new technological capabilities.

Clearly there is a lot happening in PLM landscape, but how well has Siemens succeeded in terms of competitive power?

One indication is an interesting evaluation of six PLM systems by the analyst Forrester Research. In this evaluation, Siemens has been placed in the Leaders Wave. Furthermore, this version of Forrester’s Wave for PLM in discrete manufacturing for 2021 Q1 also points out Siemens Digital Industries as the clear leader.

The analyst has positioned three players in the leadership wave: in addition to Siemens Digital Industries (Teamcenter), this wave includes Dassault Systemes (3DEXPERIENCE) and PTC (Windchill).

The remarkable thing about this Wave evaluation is that Siemens has so clearly been given the leadership position. Three years ago, it looked quite different. In Forrester’s published Wave line-up at the turn of the year 2017/2018, Siemens was close to the leadership wave but didn’t make it in, while Dassault was safely positioned second in the Leaders Wave. At the time, PTC was considered the clear leader. With today’s Wave, we see a change on the throne in terms of positioning, characterized by Siemens’ big step forward.

A Rewarding Position. “We have reached the top of the wave because of industry-leading capabilities in requirements management, design, BOM, digital twin, simulation, IoT, user interface, integration and configurability – all of which were cited in the Forrester report as our strengths,” said Siemens Digital Industries Software’s CEO, Tony Hemmegarn, commenting on the German PLM and automation giant’s clear leading position in Forrester’s latest 2021 Q1 Wave.

A Rewarding Position. “We have reached the top of the wave because of industry-leading capabilities in requirements management, design, BOM, digital twin, simulation, IoT, user interface, integration and configurability – all of which were cited in the Forrester report as our strengths,” said Siemens Digital Industries Software’s CEO, Tony Hemmegarn, commenting on the German PLM and automation giant’s clear leading position in Forrester’s latest 2021 Q1 Wave.

What factors have caused this clear shuffle of the roles? I have examined the matter in today’s article and discussed what made Siemens so strong with Siemens Digital Industries Software’s CEO, Tony Hemmelgarn. A focus in this discussion is, of course, the SAP deal with Teamcenter, but also the advancements in simulation and electronics tools. I have also spoken to the competitors’ leaders Jim Heppelmann from PTC, and Dassault’s ENOVIA CEO, Stéphane Declée. Additionally, I have also discussed these issues with Gartner analyst Marc Halpern, and his CIMdata colleague, Stan Przybylinski.

Highest Score for Strategy

“It is rewarding to have Forrester recognize Teamcenter as the leading PLM solution. As you’ve noted repeatedly, companies of all sizes are increasingly choosing Teamcenter over competitive solutions, despite what some of these companies tell financial analysts,” says Tony Hemmelgarn.

“We have reached the top of the wave because of industry-leading capabilities in requirements management, design, BOM, digital twin, simulation, IoT, user interface, integration and configurability – all of which were cited in the Forrester report as our strengths.  We also received the highest score for strategy.  Sometimes when a strategy is defined it takes a little while for all to see the vision – but our customers see it and Forrester has recognized we are executing on this strategy, he added.

Doesn’t Agree with Forrester. PTC’s CEO, Jim Heppelmann says, ”Each industry analyst uses a different lens to evaluate vendors, and a certain amount of each evaluation is qualitative and subjective rather than quantitative and formulaic,” commenting on the latest Forrester’s Wave in PLM for discrete manufacturing.

Doesn’t Agree with Forrester. PTC’s CEO, Jim Heppelmann says, ”Each industry analyst uses a different lens to evaluate vendors, and a certain amount of each evaluation is qualitative and subjective rather than quantitative and formulaic,” commenting on the latest Forrester’s Wave in PLM for discrete manufacturing.

Of course, Hemmelgarn and Siemens’ competitors have a different view of the matter, such as the opinion of the PTC’s Jim Heppelmann.

“Each industry analyst uses a different lens to evaluate vendors, and a certain amount of each evaluation is qualitative and subjective rather than quantitative and formulaic. So, it is hard to debate why this particular analyst ‘upgraded’ their view of Siemens. In general, across a collection of different reports on average PTC remains #1, Dassault is #2 and Siemens is #3,” Heppelmann says.

“Most importantly, the results from real customers are more interesting to compare, because analysts aren’t buying or using the software! Here the comparison is stark. PTC’s PLM business accelerated to 15 percent growth in FY20, building on the strong trend of 12 percent growth in FY18 and 13 percent growth in FY19,” he adds. 

Dassault’s ENOVIA CEO, Stéphane Declée, keeps a lower profile in his comments on Forrester’s latest Wave report.

“We are happy to be recognized as a ‘leader’ once again in the Forrester PLM Wave for Discrete Manufacturers. It’s also interesting to note that this space is quite competitive, and our customers have validated the business transformation and innovations we have brought to their business with the 3DEXPRERIENCE as a catalyst and its unique ability to create virtual twins from engineering to manufacturing and operation. This is the primary reason for our continued market leadership position.  We would encourage customers to examine the weightings and findings of the report and assess the parameters that is most relevant to them when engaging in a transformation initiative,” Declée asserts.

Dassault’s ENOVIA CEO, Stéphane Declée, says that, “It’s interesting to note that the leader’s space in Forrester PLM Wave for Discrete Manufacturers is quite competitive and our customers have validated the business transformation and innovations we have brought to their business with the 3DEXPRERIENCE as a catalyst.”

Dassault’s ENOVIA CEO, Stéphane Declée, says that, “It’s interesting to note that the leader’s space in Forrester PLM Wave for Discrete Manufacturers is quite competitive and our customers have validated the business transformation and innovations we have brought to their business with the 3DEXPRERIENCE as a catalyst.”

These comments show that the struggle for leadership in the PLM arena is fierce and the tone is not always mild. But apart from the competitive rhetoric, a lot has undeniably happened within Siemens PLM since Tony Hemmelgarn stepped up to the role of new head of the Software division in October 2016.

In 2017/2018, PTC’s Heppelmann was pleased to see how the company advanced to a leading role when it comes to PLM for discrete manufacturing in Forrester’s Wave. They had already received a number of analysts’ evidence of its leading position in IoT and AR (Augmented Reality). But it was the overall assessment that mattered and even there, according to Forrester, PTC had stepped up to leadership level.

Commercially, however, the result was still a bit tentative. PTC’s position as third among the traditionally leading PLM market participants (Dassault Systémes, Siemens and PTC) did not change in any remarkable way. At the top in terms of direct revenue on the software side, the results basically looked the same: Dassault led with Siemens on its heels, and with the PTC following a bit behind.

Reversion at The PLM Top

Four years later, something has happened—the roles at the absolute top are reversed, according to the same Wave evaluation from Forrester. Siemens has taken a technological step from just touching the limit of the leader wave in 2017 to now being positioned in a clear and distinct lead, with PTC at a distant second and Dassault even further down. All three, however, are in the leadership wave.

Commercially, we see the same thing: Siemens has risen as revenue leader in terms of software only, while Dassault has dropped one position and is now in second. PTC remains in third out of the big-three PLM developers, but between 2015 to 2019 has not made a strong impression in terms of revenue development. 2020, however, showed some improvements and marketshare gains, but not to an extent that disrupted the company’s position in the “revenue league.” These results are all according to the analyst CIMdata’s figures.

Looking at the CIMdata chart below shows the revenue development curves for direct revenues, software only, for the big players in PLM between the years 2015 and 2019.

Making Investments in All the Right Things

The overall picture that emerges is one of a company, Siemens, that under Hemmelgarn’s management has invested in virtually all the right things. In addition to the commercially sensational alliance with SAP, the Software division leader has pushed all the right buttons, which is mirrored in the investments in well-connected PLM and automation solutions. The most important investments on the PLM side are the expanded capabilities in simulation and analysis support (S&A) with Simcenter, electronics and electrification support (EDA) with Mentor and other related solutions and software integration support with ALM and Polarion, all on top of the explosively developed IoT solution MindSphere and a promising low-code platform, Mendix. One observation of relevance here is that many of these improvements relate to the electromobility trend following Siemens’ leading position in the automotive industry.

In addition, the software portfolio is now much clearer packaged in the Xcelerator platform. The latter includes all the other important PLM tools, such as Teamcenter (cPDm), NX CAD, Tecnomatix (Digital Manufacturing) and others.

If you extend the development line into the manufacturing area, there are sharp platforms to connect product development and production in MindSphere (IIoT, Industrial IoT), Tecnomatix (Bill of Process, BOP), OpCenter (MES/MOM/PLC) and, for example, the TIA portal.

According to Tony Hemmelgarn, all of these advances are reflected in Siemens Digital Industries’ positioning as a leader in Forrester’s Wave.

“I believe that the key reason for the result in this report is because we’ve been listening to our customers.  They told us that they wanted more flexibility and agility, so we created Teamcenter X and have been able to deliver Instant-on Teamcenter through the cloud.  As a result, we are able to reach customers we may not have been able to before.  This is because we manage the solution for our customers and we provide a cost entry point that can help very large to really small customers get access to the capabilities that were recognized by Forrester very quickly,” Hemmelgarn states. 

“As the world heads towards more personalized applications, the integration of our Mendix low-code platform with Teamcenter lets people create their own solutions without having to be a software developer,” he adds.  “Teamcenter X integrated with Mendix enables us to put the power into the users’ hands, while still being consistent with the company’s overall IT policies.  These moves have strengthened an already market-leading product. The industry has recognized Teamcenter’s leadership position – from SAP’s choice to place Teamcenter at the foundation of their PLM, to the U.S. Air Force’s choice of Teamcenter as their PLM solution of record – and we’re pleased to have Forrester validate this leadership in the report.”

Why Is Siemens So Strong In PLM? “The biggest business driver, however, is digital transformation. CIMdata believes that manufactured product companies looking to pursue a digital transformation strategy need to have a very strong PLM strategy and enable implementation to support those changes,” said CIMdata’s VP and analyst, Stan Przybylinski.

Why Is Siemens So Strong In PLM? “The biggest business driver, however, is digital transformation. CIMdata believes that manufactured product companies looking to pursue a digital transformation strategy need to have a very strong PLM strategy and enable implementation to support those changes,” said CIMdata’s VP and analyst, Stan Przybylinski.

“A Deep and Broad Portfolio,” Says CIMdata

“What is the strength of Siemens Digital Industries Software?” I asked CIMdata vice president and research lead, Stan Przybylinski. He points to three areas in particular that are important in this context.

“They have a very broad and deep portfolio, the broadest in the market when compared to CIMdata’s PLM segmentation. Another huge strength is being part of Siemens AG, which brings internal development resources and many willing Siemens manufacturing business units to adopt their solutions,” Przybylinski said.

Finally, he believes that Siemens is well-positioned to address several over-arching global trends that are changing the market.

An interesting point related to Electronic Design Automation (EDA) is that Siemens Digital Industries Software took in 34.1 percent of its revenues from this area in 2019. PDM resulted in 19.4 percent of the revenues and CAE simulation and analysis brought in 18.1 percent.

Clearly, there are several good reasons for Siemens’ top ranking. From an overall perspective, the analysts at Forrester point to Siemens’ “above-par vision and roadmap for PLM for discrete manufacturing, together with above-par innovation, partner ecosystem and transformation strategy.”

“They needed a cPDm tool, knew the strength of Teamcenter and chose this solution as a basis to be able to do what is needed for efficient product life cycle management. But it is not a collaboration that you can solve overnight and then put together ready-made solutions over a couple of weeks,” says Siemens PLM’s leader.

“They needed a cPDm tool, knew the strength of Teamcenter and chose this solution as a basis to be able to do what is needed for efficient product life cycle management. But it is not a collaboration that you can solve overnight and then put together ready-made solutions over a couple of weeks,” says Siemens PLM’s leader.

The SAP Deal: “It’s Not Even a Debate About Teamcenter as SAP’s PLM Backbone”

Hemmelgarn points to three great examples related to the “above par” theme: the SAP deal; the consistent bet on an advanced simulation platform, e.g. Simcenter and the IC (Integrated Circuits), PCB (Printed Circuit Board) and electronics software suite Mentor, plus other related solutions such as the new PCBflow ecosystem market solution, UltraSOCs; and last week’s OneSpin purchase. These are taking on a more and more crucial role as the world is on the threshold of full electrification.

Of these, the SAP deal has been most widely discussed and debated from many different angles, covering questions such as: Why is SAP so important? What happens once you have the seamless integration between ERP (SAP) and PLM (Siemens Teamcenter) in place and data smoothly flowing between the two solutions? Does SAP really need to have its own PLM solution?

“Look, they are going to use Teamcenter as a PLM backbone. There’s even not a debate around that,” Hemmelgarn states emphatically.

“So, it’s a big deal. What their solutions are doing today that Teamcenter already does? Of course, it doesn’t make sense going forward to develop new solutions, but I let SAP speak to that. Generally, however, PLM is a broad term that cover lots of things,” he adds. “A couple of interesting examples: they’ve [SAP] got a good solution for portfolio planning. There are things that they do in costing that we also do in costing, that they will continue to do and that we also will continue to do, and then later maybe break together. There are areas in service lifecycle management where some of the content touches PLM, where we will leverage completely what they’ve got with our portfolio.”

Can a quick commercial impact be expected?

“It’s way too complex for that,” says Hemmelgarn. “SAP could have chosen any solution to build the cPDm /PLM core they wanted. They needed a cPDm tool, knew the strength of Teamcenter and chose this solution as a basis to be able to do what is needed for efficient product life cycle management. But it is not a collaboration that you discuss and solve overnight and then put together in ready-made solutions over a couple of weeks. It is much more complex than that.”

It’s not hard to agree that to learn, sell and implement a brand-new PLM system will definitely take time.

“The good thing is that their [SAP’s] sales force has now reached a position where they can sell our solutions, such as Teamcenter. It takes time to get the offers in the price books and everything about system training and other pieces within Siemens and SAP. But we are there now and have everything ready,” claims Hemmelgarn.  He also points to the external parts of the sales processes. “Teamcenter is not something a potential customer will buy after two weeks of consideration. There is a sales process there, but we have had a good start with a certain customer interaction around the product.”

According to Tony Hemmelgarn, “The key for SAP is that they don’t have to build the things that Teamcenter does so well at the core. They can integrate those things to Teamcenter. On the other hand, for example, the portfolio management and costing where SAP has good solutions can be integrated to our solution. There are some good synergies there.”

According to Tony Hemmelgarn, “The key for SAP is that they don’t have to build the things that Teamcenter does so well at the core. They can integrate those things to Teamcenter. On the other hand, for example, the portfolio management and costing where SAP has good solutions can be integrated to our solution. There are some good synergies there.”

Several Sharp Synergies Between Companies’ Portfolios

That being said about the commercial pieces, of course there is more that needs to be in place as part of the puzzle, says Hemmelgarn.

“The second thing has been considering that all the challenges around the sales processes are clear. Where do we go from here? Teamcenter sales are one thing, but how do we integrate the rest of our portfolios? Things like how to use TC as the core of product lifecycle management, as a strong base for configuration management, etc. The whole idea of ​​collaboration, knowledge management of everything we do and connect it with SAP’s positions in lifecycle and asset management etc. These are areas where we have seen many sharp synergies coming together, but it is not only to integrate these opportunities—these products should also be included in our price books.”

But even here, things are starting to land—of which last week’s announcement about concrete common program and integration deliveries is excellent proof.

As noted in the article introduction above, this includes new cloud-based services that can help industrial equipment manufacturers sharpen their assets, efficiency, machinery and buildings, and to avoid unplanned downtime and shorten design cycles in technology projects related to these assets.

Siemens claims that this can help to “maximize business value over the entire product, service and asset life cycles and enable new collaboration processes between manufacturers and operators.”

“The main point, however,” Hemmelgarn continued, “is that whatever we do, we are going to give the customer a choice. The key for SAP is that they don’t have to build the things that Teamcenter does so well at the core. They can integrate those things to Teamcenter. On the other hand, for example, the portfolio management and costing where SAP has good solutions can be integrated to our solution. There are good synergies there. So, I think that you’ll see a blend of things and definitely there are areas where you will not keep on investing because you are going to use Teamcenter as a core.”

One of Siemens’ first areas in SaaS was the Mendix acquisition with low-code capability a couple of years ago.

One of Siemens’ first areas in SaaS was the Mendix acquisition with low-code capability a couple of years ago.

A Tough Battle

The battle for leadership in PLM and automation is demanding. Nothing comes for free, and the whole thing becomes even more complex because the connections between these two areas today are a central point in the development of software and hardware support, both technologically and commercially.

From a technology angle, and related to Forrester’s positioning of PTC, they look like a player “you can feel breathing down your neck.” They have succeeded quite well in IoT, AR and in automation thanks to their cooperation with Rockwell. Furthermore, PTC has bet hard on SaaS, cloud CAD and PLM with the purchase of Onshape and Arena. However, none of this seems to bother Tony Hemmelgarn.

“No, we’re already there,” he says, referring to all these areas. “One of our first areas in SaaS was the Mendix acquisition with low-code capability a couple of years ago. This is all SaaS, and big business for us. We have already passed over $100 million annual recurring revenues related to Mendix alone, and that’s a big milestone. Furthermore, it continues to grow very well. The great thing about that is that we have a sales force that can sell Mendix to the world, as opposed to how it looked before we bought it.” 

“Mendix can ‘go after’ so many segments, both in terms of manufacturing industries and others like finance,” he added, asserting that, “A lot of low-code solutions are focused on non-industrial applications; Mendix can do both.”

“The low-code solution Mendix is a promising investment,” claims Tony Hemmelgarn. But in terms of revenues and compared to the Mentor suite, we’re still talking about relatively small money. The big revenue generator for Siemens is another of Hemmelgarn’s purchases: Mentor, which as a main part of the EDA area pulls in more than 30 percent of the total revenues. Mentor is also a good example of an above-par and best-in-class software according to Forrester—and it has proven itself during the Covid-19 pandemic. “For example,” says Hemmelgarn, “in our latest report, we unsurprisingly saw big growth in important areas such as electronics. But the good news is that it wasn’t just Mentor’s integrated circuit (IC) business that made an impact—that business has always been strong—but Mentor’s electrical systems such as wiring harnesses also saw very good growth, as did the PCB side. We continue to make a difference for Siemens, and have been able to grow our business through all of this. Maybe in different areas than we did before, but still we’re growing the business and we had good organic growth.”

“The low-code solution Mendix is a promising investment,” claims Tony Hemmelgarn. But in terms of revenues and compared to the Mentor suite, we’re still talking about relatively small money. The big revenue generator for Siemens is another of Hemmelgarn’s purchases: Mentor, which as a main part of the EDA area pulls in more than 30 percent of the total revenues. Mentor is also a good example of an above-par and best-in-class software according to Forrester—and it has proven itself during the Covid-19 pandemic. “For example,” says Hemmelgarn, “in our latest report, we unsurprisingly saw big growth in important areas such as electronics. But the good news is that it wasn’t just Mentor’s integrated circuit (IC) business that made an impact—that business has always been strong—but Mentor’s electrical systems such as wiring harnesses also saw very good growth, as did the PCB side. We continue to make a difference for Siemens, and have been able to grow our business through all of this. Maybe in different areas than we did before, but still we’re growing the business and we had good organic growth.”

“A Mess to Get Through For PTC”

However, Mendix is far from what makes Siemens a big SaaS and cloud player, Hemmelgarn argues, once again pointing at the Teamcenter PLM suite.

“SaaS and PLM don’t stop going back to Teamcenter and what it can do in so many areas. The reason SAP picked Teamcenter is that, among other things, it has the most proven, scalable and robust PDM tools in the world. At the same time, we want to be sure to reach all levels of users, so we introduced ‘Teamcenter rapid start’ several years ago, meaning that Teamcenter has been used by many, many small and medium sized companies. It’s easy to get it up and running very quickly. Then we looked at, what about finding a new higher level for Teamcenter, what about the cloud and SaaS models? That’s where Teamcenter X comes into play,” he says.

“We have been able to take this very proven solution to the cloud, and in parallel take it down to very small customers because we can now manage it for you,” Hemmelgarn continued. “That’s also where we see the most interest and growth today: in SaaS, collaboration, configuration and data management. The big thing, however, is that people are interested in seeing what we’re doing in the collaboration space. Once again, we can manage the technology and platform for you; you don’t have to do anything. This is exciting for SAP, too. They are talking a lot about their cloud strategy going forward and they can now see what we can do with Teamcenter in action on the cloud and with SaaS models, which of course is as much of interest to them as it is to us. This is one of the areas where you will see us moving forward together. IoT, low-code, PDM capability, etc.—all of that will be in SaaS, and it will grow organically.”

“And by the way,” he added. “PTC’s SaaS is very much an acquisition with everything that comes with this.”

Hemmelgarn says he wonders what PTC is going to do. “They have Windchill sitting there, they have Arena sitting there, they have Creo sitting on its own CAD offering, and Onshape using Parasolid. What are they going to do? That’s a mess to get through.”

In an earlier engineering.com interview I had with PTC’s leader, Jim Heppelmann, he said that we’re going to see a new normal and new orders of magnitude when it comes to usage volumes and revenues for cloud PLM SaaS solutions. Do you share this view? I asked Hemmelgarn.

“I would say that yes, it is going to take off—as it in fact already did in some areas. It is not a matter of if, but rather a question of when. For a while there, people were worried about the cloud in terms of security and IP protection. For the most part, we are getting past that. If you look at the security breaches around the globe, it often relates to companies’ own IT departments. In our hosted cloud, this is history.”

On the IIoT (Industrial IoT) front, where Siemens’ MindSphere operating system has grown and can now compete with PTC's IoT solutions, with a head start in the manufacturing perspective. In parallel with this, the tools have been adapted to digital twin and thread concepts, model-based system development (MBSE) and more.

On the IIoT (Industrial IoT) front, where Siemens’ MindSphere operating system has grown and can now compete with PTC’s IoT solutions, with a head start in the manufacturing perspective. In parallel with this, the tools have been adapted to digital twin and thread concepts, model-based system development (MBSE) and more.

My Take

Tony Hemmelgarn has been able to reap the rewards of a consistent investment in platform integration for simulation, IoT, IIoT, Electronic Design Automation (EDA) and Application Lifecycle Management (ALM) and far-reaching digitally controlled automation in the spirit of Industry 4.0. These are investments that have raised the company’s PLM portfolio of associated automation software to a new higher, fully integrated level of maturity. Among the software mentioned here, I want to emphasize the purchase of Mentor (EDA) as a great move. The investment in Polarion (ALM) is also an important component, as well as the integrated simulation platform Simcenter which has come to mean a great deal in an engineering world where virtual prototyping has grown explosively.

The same thing is seen on the IIoT front, where the MindSphere operating system has grown to a level where it can compete with PTC’s IoT solutions, with a head start in the manufacturing perspective. Parallel with this are the tools being adapted to digital twin and thread concepts, model-based system development (MBSE) and more.

There is more going on, but overall it comes down to a “tightening” of what as recently as four or five years ago was a rich, but somewhat scattered software tree with a few gaps in the branches, mainly in the IoT area.

However, Siemens has always had a strong “connective culture” where the relationship and associativity between product development and production/automation tools have continuously been sharpened. As an example, solutions for virtual commissioning were first introduced by Siemens and their solution made it possible to insert the code into the production machines directly from the product development to simulate, correct and optimize manufacturing processes.

What has today become the Xcelerator portfolio is, in short, a cohesive product development platform—and according to Forrester, it’s the best you can get in discrete manufacturing.

Cedrik Neike, who in addition to being head of the overall Siemens Digital Industries is also a member of the board of Siemens AG, says that based on the strategic partnership between Siemens and SAP announced in July last year manufacturers–– with the new solutions can provide new services and business models for installed equipment, and help owners and operators use operational insight to increase asset utilization while maximizing security and reducing risks.

Cedrik Neike, who in addition to being head of the overall Siemens Digital Industries is also a member of the board of Siemens AG, says that based on the strategic partnership between Siemens and SAP announced in July last year manufacturers–– with the new solutions can provide new services and business models for installed equipment, and help owners and operators use operational insight to increase asset utilization while maximizing security and reducing risks. “Siemens helps industrial companies make safer decisions by closing the loop between IT and OT,” he says. “Through this partnership, we enable a true digital thread that integrates real-time data with virtual product and asset models with components from both Siemens and SAP to provide operational insight.”

When it comes to the development of the company’s ecosystem, we see big steps forward, not the least of which are related to the past year’s advancement to work with SAP to create integration between the company’s ERP and PLM software and to start selling each other’s solutions to both existing and potential customers. This increases the company’s market presence.

So far, we haven’t seen any big concrete orders, but that will soon change.

“We’ve had some small ones come in, but it’s nothing that we will be bragging about externally. Most of it is in the discussion phase, but I think that you will see some interesting results here in the coming 6 to 8 months,” says Hemmelgarn.

Generally, his view is that Siemens and SAP have organized this cooperation in a way that helps the customers to get the best possible deal and not trip over each other.

“I would say that I have been in this business a long time, and there has never been a situation where somebody comes in and suddenly sells so much better than we’ve done before,” Hemmelgarn adds. “But can it make a difference long term? Yes. Can it make a difference in the level of integration we can offer our customers? Yes. Am I expecting a dramatic shift in sales overnight with millions of dollars raining in? No. I simply do not see it that way. It will be a gradual development.”