It is time to have a look at what is happening in digitalization.
Not predictions, statistics, forecasts or numbers, but feedback and trends based on real customer conversations – and the real determining factor – signed deals.
I have said in the past that no one company will totally dominate the digitalization market (or its dominant use case: Industry 4.0, the Internet of Things, Industrial Internet, call it what you will). The market is just too heterogeneous; the scope, the scale -and the almost infinite number of ways of approaching digital transformation - is just too great.
But, that being said, the key to successfully participating in supporting the digital economy - in driving market adoption, in ensuring that customers reap the maximum value from what is still an early adopter market - is the depth, breadth and expertise of both a vendor’s experience and its ecosystem.
The capability of the ecosystem is fundamental to driving IoT adoption. This is why I can look back on the first quarter of 2018, and the preceding quarters, with immense satisfaction. Not only did we report unparalleled growth in our IoT/cloud portfolio but we also considerably widened our ecosystem of partners and customers. In truth, in this market, there is little difference between partner and customers. Software AG is simply a strategic partner with every single enterprise or organization that it engages with.
This is why Software AG is rapidly becoming the platform of choice for a large set of customers and partners in the IoT market: Siemens, Bosch, Dell (our first joint product on the edge is now available), Huawei (will follow soon), ADAMOS – an expanding list the who’s who of German and now international manufacturers: DMG Mori, Zeiss, Dürr, ASM, Engel, Karl Meyer and their expanding list of end user clients. Plus our Cumulocity platform is supporting the IoT efforts of the Greater London Authority, Ooredoo in Qatar, Telefonica in Spain and more. This is an ecosystem in dynamic expansion that will drive our growth in the coming years as our model is based on consumption. But still, and maybe counter-intuitively, this is also an ecosystem of early adopters.
It has also become apparent to me that this is not yet a fully mainstream market, the main growth phase is yet to come. Most companies are still preparing for their total digital transformation. I see this when I review our major sales successes. Focusing on recent quarters, yes there are major IoT deals with enterprises well on their transformational way, but there are also many, many enterprises using enterprise architecture management technology, integration from anywhere to anywhere, business process modeling, all preparing for the incredible digitalization journeys that lie ahead! This is still a young market. You ain’t seen nothing yet!
And as for depth of experience, Software AG is the Mariana Trench of digitalization. All of the terms I have used over many years are still extremely relevant. From a software as a service architecture instead of silos, from the agility layer needed to free the data and applications of decades, from one, consistent view of enterprise data, one view of the truth: These are the issues the mainstream are concerned with today in preparation for the digital journey of tomorrow.
Our Digital Business Platform is critical to preparing our partners for this journey but it is also ready to take them to the end of that journey. We are some years ahead of the curve. The depth of experience we have built in industrial scale data management and the IoT experience we are building with the early adopters will be a unique and incalculable asset when the mainstream moves to IoT.
I would like to emphasize that it all starts though with integration. Integration is still the key to building a successful architecture for digitalization. Salesforce’s acquisition of MuleSoft highlights this. I don’t know how Salesforce will further develop MuleSoft of course, but if they focus on Salesforce centric integration (in the same way as we have SAP-centric or Oracle-centric integration suites) then Salesforce has removed a competitor from our market. That is, independent integration that opens customer choice avoiding customer lock-in, a true agility layer that lays the basis for successful digitalization.
This is the market status today. Many early and visionary adopters and even more visionaries are preparing themselves for their individual digital transformation. We are building the ecosystem that this market demands.