How Siemens grew 25% in two years by creating a SaaS for digital twins

Join us on November 9 to learn how to successfully innovate and gain efficiencies by improving and scaling citizen developers at the Low-Code/No-Code Summit. Register here.

Companies are increasingly shifting from selling products to selling everything as a service to take advantage of cloud innovations. Typically, they face a loss of revenue for several years when refactoring existing products into subscription services.

But some transitions are much faster. Siemens Digital Industries grew revenue from around $15 billion a year to $20 billion in just two years after transitioning its portfolio of digital twins to an industrial metaverse cloud called Siemens Xcelerator.

VentureBeat caught up with Cedrik Neike, CEO of Siemens Digital Industries and board member of Siemens AG. He gave us a glimpse of that success and a glimpse into the future of the industrial metaverse.

For context, Siemens Digital Industries is a division of the holding company Siemens AG that focuses on tools for designing, testing and manufacturing physical products such as cars, planes, computer chips and goods of consumption. Other Siemens divisions focus on trains, smart infrastructure, healthcare and energy.

Event

Low-Code/No-Code vertex

Learn how to build, scale, and manage low-code programs in an easy way that creates success for everyone this November 9th. Sign up for your free pass today.

register here The jewel of the Siemens portfolio

Neike said Digital Industries is the pearl of Siemens' portfolio. Its factory automation technology, a programmable logic controller (PLC), is installed in 30% of all manufacturing equipment and its design and product lifecycle management tools are a staple in most businesses. industrial.

"We're in the early years of the SaaS [software as a service] transition, but we're actually migrating our customers to SaaS faster than expected," Neike said. "We want to help engineers design a product mechanically and electrically, test it and optimize it."

When Neike first took over as head of Digital Industries two years ago, he launched an ambitious three-pronged digital transformation strategy:

Move all digital software to the cloud and connect it to the Siemens Xcelerator industrial metaverse platform for digital twins. This includes tools for product lifecycle management, chip design, physics simulation, and low-code application development. Digital Industries is also collaborating with Siemens sister companies to create complete digital twins for buildings, infrastructure and rail infrastructure. Connect manufacturing equipment to the cloud. Siemens manufacturer customers generate approximately 2,200 terabytes of data per month. Siemens wants to help them analyze, filter and train artificial intelligence (AI) algorithms on this data more efficiently. For example, Siemens is opening its PLCs to the Siemens Xcelerator program to help companies connect their factory automation to digital twins. Extending digital twins to the supply chain to increase efficiency and resilience, as well as integrating carbon footprint analysis tools between partners. Internally, Siemens has created the Degree Framework, which defines measurable social, governance and environmental objectives. It also added new tools to calculate the CO2 footprint of a product's bill of materials (BOM) so companies can optimize the right balance of cost and...