Siemens Leans into SaaS, the Metaverse and SMBs

June 20, 2023
The new direction announced last year by Siemens Digital Industries Software is already paying off for the company through record growth driven by growing adoption of its SaaS products and its integrated electromechanical and operations technologies.

In early 2022, Siemens announced that it was transforming itself into “a tech company” as marked by a concentrated focus on delivering its technologies as a service and expanding its customer base among small to mid-sized businesses (SMBs). A little more than a year since that announcement, the company highlighted its moves over the past year to fulfill its tech company goals.

According to Robert Jones, executive vice president, global sales and customer success at Siemens Digital Industries Software, the company now counts more than $1 billion in revenues from SMBs today, adding that 75% of Siemens SaaS (software as a service) orders in the last 18 months came from SMBs.

During the media and analyst program held as part of the Siemens’ Realize Live 2023 event, Tony Hemmelgarn, president and CEO of Siemens Digital Industries Software, said that in the second quarter of 2023, Siemens grew by 15% (to 19.4 billion euros) with the Digital Industries group growing 23% to 5.5 billion euros. This is “the highest ever quarterly earnings” for the group, he added.

“Transformation is top of mind for all our customers—from startups to the largest companies,” noted Brenda Discher, head of communications for Siemens Digital Industries Software, explaining the drivers behind the company’s growth as well the company’s own transition to become a tech company. Business used to be about “improving costs and being faster to market, now everyone is dealing with climate change issues, the aftermath of COVID-19 on resources, global conflicts impacting the supply chain and competition, particularly in the war over talent,” she said. “All of these are driving digitalization across every industry.”

Discher said these factors are causing businesses of all sizes to realize that today it’s “about how fast can you become more resilient by digitalizing to improve your clock speed and quickly deliver a return on investment.”

This is why Siemens has spent billions integrating its software and automation portfolio, Discher added, connecting its mechanical, electrical and software technologies to enable a complete digital twin in Xcelerator—Siemens platform that now spans every industry Siemens serves: infrastructure, mobility and industrial.

Metaverse update

In June 2022, Siemens announced a partnership with Nvidia using digital twin technology and artificial intelligence (AI) to create an industrial metaverse as an extension of its Xcelerator portfolio. At the Realize Live event, Siemens highlighted a cloud-based digital twin of the next-generation giga factories planned by Freyr Battery, a Norway-based battery cell manufacturer for electric vehicle and marine use. Founded in 2018, Freyr produces batteries using renewable energy sources and plans to rapidly scale its production capabilities while maintaining its sustainable production operations.

The company has already begun building the first of its planned giga factories in Mo i Rana, Norway, and announced potential development of industrial scale battery cell production in Vaasa, Finland, as well as the United States. Freyr says it intends to install 50 GWh of battery cell capacity by 2025, 100 GWh annual capacity by 2028 and 200 GWh of annual capacity by 2030.

Hemmelgarn noted that Siemens and Nvidia developed a showcase of their technologies at Hannover Messe this past spring to demonstrate the potential use of their metaverse technologies at Freyr. Using AWS IoT TwinMaker in a custom Siemens application built on the Nvidia Omniverse platform, the model integrates operational data from the factory along with 3D definitions of the building, plant, machinery and equipment, as well as human ergonomics and safety information, detailed production processes and simulations of products and production.

As Hemmelgarn highlighted Siemens’ work with Freyr, he called out a key difference in the metaverse and its underlying digital twin technologies that potential users should be aware of. “One of the problems when people talk about the metaverse is they'll say ‘we have this wonderful simulation.’ But when you dig into it, it's not really simulation—it's an animation.”

Hemmelgarn said this animation/simulation misunderstanding can bring into question whether or not there’s a “digital twin or any physics-based solutions behind it.” He stressed that what Siemens is showing is “not a movie—it's like a gaming engine. You can go wherever you want in this factory to see, for example, the operational effectiveness of it. I can zoom into an area and look at a particular machine and see all the metrics about what's happening with this machine. With a robot, if there’s a problem with it, I can go to its digital twin and actually see the design and make changes to it based on what's happening.”

He added that, in this metaverse application, users at Freyr can apply Siemens CFD (computational fluid dynamics) tools to “actually simulate and show what the mixing of the materials from the battery chemistry looks like based on physics—not an animation—through a [true] simulation of what's happening.”

Freyr is currently using several Siemens Industrial Operations X technologies (part of the Xcelerator portfolio) across its entire battery design and manufacturing process. These technologies include product lifecycle management (PLM), manufacturing execution systems (MES), industrial edge computing, and IT/OT connectivity. According to Freyr, Siemens Industrial Operation X will help them better connect design and manufacturing to scale-up production and speed their progress towards development of the planned giga factories. (A video demonstrating Siemens and Nvidia’s metaverse is posted at the end of this article.)

Startup success

With SMBs becoming a larger component of Siemens’ customer base, the company spent a great deal of time at its annual Realize Live event focusing on how Teamcenter X—the SaaS version of its Teamcenter lifecycle management software—is well suited for such companies due to its delivery of a 55% cost savings over an on-premises deployment. This cost reduction associated with SaaS versus on-premises applies to both SMBs and large companies, according to Hemmelgarn.

Jones added that about 25% of Siemens cloud revenue this past year came from the aerospace and defense sector—an industry vertical that Siemens thought wouldn’t move aggressively to the cloud for a variety of IP and security concerns. With many of these concerns allayed by continuously updated security methods managed by the provider, cloud software use is quickly becoming the norm across industry.

One of the new companies highlighted at the Realize Live event for its use of Siemens Xcelerator platform was Regent, manufacturer of the all-electric seaglider planes for high-speed, zero emission regional travel along the coasts. According to Regent, reception to the seaglider has been so positive that it has already sold more than 460 seagliders with a $7.9 billion order backlog. So while they’re still considered a startup now, they’re positioned for fast growth. But to support that, they need the right software technologies delivered in the right way.

According to Siemens, Regent has been using the Xcelerator portfolio as its design, engineering and development toolset since Regent’s founding in 2020.

“Regent wants to change the way you move by drastically reducing the cost and time to move goods and people between coastal cities,” said Hemmelgarn. But, like most startups, “they didn't have an administrative team” to handle deployment and maintenance of the software they needed.

Mike Klinker, chief technology officer and and cofounder of Regent, said Teamcenter X “minimizes the administrative overhead and allows us to focus 100% on design, engineering, manufacturing and innovation. Siemens’ [SaaS] subscription model provided significant cash flow benefits that are vital to any startup.

The video below demonstrates Siemens and Nvidia’s metaverse capabilities in industrial manufacturing applications.

About the Author

David Greenfield, editor in chief | Editor in Chief

David Greenfield joined Automation World in June 2011. Bringing a wealth of industry knowledge and media experience to his position, David’s contributions can be found in AW’s print and online editions and custom projects. Earlier in his career, David was Editorial Director of Design News at UBM Electronics, and prior to joining UBM, he was Editorial Director of Control Engineering at Reed Business Information, where he also worked on Manufacturing Business Technology as Publisher. 

Sponsored Recommendations

Put the Plant Floor in Your Pocket with Ignition Perspective

Build mobile-responsive HTML applications that run natively on any screen.

Ignition: Industrial-Strength System Security and Stability

Ignition is built on a solid, unified architecture and proven, industrial-grade security technology, which is why industrial organizations all over the world have been trusting...

Iron Foundry Gains Competitive Edge & Increases Efficiency with Innovative Technology

With help from Artek, Ferroloy implemented Ignition to digitally transform their disconnected foundry through efficient data collection and analysis while integrating the new ...

Empowering Data Center Growth: Leveraging Ignition for Scalability and Efficiency

Data center growth has exploded over the past decade. Initially driven by organizations moving their computer assets to the cloud, this trend has only accelerated. With the rise...