Siemens prepares for industrial software consolidation

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BERLIN (Reuters) – Germany’s Siemens is preparing for an eventual consolidation of platforms competing to provide businesses with factory software, its digital factory division head said.

While digitally enhanced manufacturing is still in its infancy, competition is already fierce, as evidenced by Emerson Electric’s failed $29 billion bid to buy Rockwell Automation last year.

“Initially there is a high number of players and then over time consolidation happens,” Klaus Helmrich said on Wednesday at the launch of a global user organization for Siemens’ MindSphere platform, which competes with General Electric’s Predix and others to help customers gather data from machines.

“I don’t think we will end up with one platform worldwide. There will be a handful or two handfuls in the mid to more distant future,” Helmrich said, comparing the proliferation of industrial software platforms with the smartphone industry, which has ended up being dominated by Apple and Samsung.

MindSphere gathers data from devices, then uses it to help customers design products faster and optimize processes. Last month Siemens said it is partnering with Amazon Web Services (AWS), the most popular cloud provider.

Siemens already has more than 800,000 intelligent sensors in buildings and machines, including trains and healthcare equipment, putting it in a strong position, Helmrich said.

“It is a solid basis for the start of the business and makes us optimistic about scale effects,” he said, adding that being first to gather a critical mass of software developers and users is crucial to winning customers, much as Apple’s large developer community made its app store the most attractive.

Siemens on Wednesday launched a user organization with 18 partners including German robotics firm Kuka and factory developer Eisenmann to help them develop the platform and set out rules for data use.

Reporting by Emma Thomasson; editing by Alexander Smith