Siemens restructures for power and smart infrastructure

Siemens restructures for power and smart infrastructure

Business news |
By Nick Flaherty

The three new operating companies will cover Gas and Power, including battery systems, distributed energy management and electric vehicle charging, alongside Smart Infrastructure and Digital Industries, which includes EDA tool vendors Mentor Graphics and Solido. These three companies will be made up of the Building Technologies Division (BT), Energy Management Division (EM), Power and Gas Division (PG), Digital Factory Division (DF) and large parts of its Process Industries and Drives Division (PD). The regional structures will also be reorganised. 

The move follows the $600m acquisition of mendix as the heart of an IoT Infrastructure division wthin Digital Industries. “The days when project business, product, software and service companies, with all their different requirements, could be centrally and efficiently managed are over,” said Joe Kaeser, President and CEO of Siemens. “Less management from headquarters and more freedom for our businesses will make us stronger and more flexible.”

The Business Unit for IoT Integration Services will be based around the MIndSphere cloud technology alongside artificial intelligence and cybersecurity, and Siemens plans to offer consulting, design, prototyping and implementation services. Until 2025, the market for IoT integration services is expected to achieve annual growth rates of ten to fifteen percent and Siemens plans to hire about 10,000 employees in this area by 2025.

The joint venture operations are Siemens Healthineers, Siemens Gamesa Renewable Energy and the planned company Siemens Alstom.

This comes towards the end of the company’s Vision 2020+ strategy and is intended to give each of the operating companies more independence and grow the company revenue and profits by at least 2 percent a year. The finance and real estate businesses are being combined into a separate Services company, while R&D will remain with Siemens Corporate Technology and the stakes in a number of small and medium sized enterprises (SME) will also remain with the main board. 

The Vision 2020 programme, launched in 2014, has been largely completed. “We’ve worked very hard over the past four years. Today, nearly all our businesses are significantly more profitable, customer satisfaction is at a record high, and our Digital Factory is the market leader in industrial digitalization,” said Kaeser. “The speed and power of global changes are increasing, and it’s our obligation to anticipate them. We’re convinced that this is the right time to sustainably shape our future. By further developing our strategy, we’re building the next-generation Siemens.”

“It won’t be the biggest companies that survive, but the most adaptable. That’s why we’ll further deepen the understanding of our Ownership Culture and give our businesses considerably more entrepreneurial responsibility than before. This also includes the direct assignment of business-related functions,” he said.

The new structure will go into effect at the start of the new fiscal year on October 1, 2018. The implementation is expected to be completed by March 31, 2019.

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