Home5GSoftware AG: “You don’t go to a Chinese restaurant for wienerschnitzel; telcos aren’t players without 5G”

Software AG: “You don’t go to a Chinese restaurant for wienerschnitzel; telcos aren’t players without 5G”

Bernd Gross, chief technology officer at Software AG, is sitting in a side room, off a busy booth at Hannover Messe 2019. The Darmstadt outfit looks a different proposition, he reckons, with new leadership, a fresh strategy, and a vogueish tagline. “Yes, freedom-as-a-service; the stand, the whole appearance – people are interested,” he says.

Software AG has regrouped around a core offer to “integrate data, devices, clouds, and applications” for enterprises seeking to embrace analytics as a springboard for growth. This positioning forms the central part of a fresh go-to-market strategy developed under new chief executive Sanjay Brahmawar, recruited from IBM’s Watson IoT business towards the end of last year.

Gross, who joined Software AG with the 2017 acquisition of his Dusseldorf-based Cumulocity IoT business, is one of Brahmawar’s chief collaborators on the new ‘Helix’ strategy. Cumulocity has ranked top of the pile among IoT platforms for five years on the spin, reckons Mach Nation, ahead of the likes Azure, AWS and IBM. It is expected to top the pile in Gartner’s next ‘magic quadrant’ of the same, out in a couple of weeks.

Cumulocity’s performance boosted the rest of the group in 2018, with revenues up 106 per cent to €30.3 million. Gross says its parentage brings weight to its offer, but Cumulocity gets Software AG into new business too. “The industrial IoT market gives us access to customers with 10,000-20,0000 employees, typically, which would be perceived as too small for our traditional IT offering,” he says.

It is also supporting the efforts of a dozen-or-so (“more than 15” states Gross) from the operator community in the IoT space, and Gross holds an interesting vantage point to discuss the sector’s tête-à-tête with the industrial sector, which has played out over the course of at last two major trade fairs in 2019 already, in the form of MWC 2019 and Hannover Messe 2019.

Its operator customers include Telstra in Australia, NTT in Japan, Deutsche Telekom at home, KPN in the Netherlands, and A1 in Austria, among others. It is broaching discussions with AT&T in the US, it told Enterprise IoT Insights a couple of months back.

Gross comments: “They are using our technology to differentiate their connectivity. They want to sell connectivity, in the end – SIM cards, to put it simply. With us, they have a cloud offering, under their own brands, which they can use to expand connectivity towards self-service IoT platforms. It’s a good way to step up the value chain.”

When it comes to IoT, the operator community is in the volume game, interested in connecting meters, containers, vehicles and other assets in massive numbers. “These are the use cases – where companies like to sign with them because they have a million ‘things’ under management, which rely on that connectivity,” says Gross.

It is an extension of their work with machine-to-machine connectivity, with a management platform and certain lightweight analytics layered-in on top.

“They are simple – a SIM, in a sense, for asset tracking and geofencing, and an alarm that gets forwarded to a ticketing system. These are not industrial use cases,” says Gross, comparing with the kinds of high-end machine and process analytics it has devised for machine builders like Dürr, DMG MORI, and Zeiss, which work on digital factory solutions with Software AG as part of the ADAMOS (ADAptive Manufacturing Open Solutions) collective.

Is that changing? Because telecoms operators are keen to animate digital factories, suddenly, with advanced LTE and 5G networks. This was the message from them at MWC 2019 and Hannover Messe 2019, in recent weeks. Gross is well positioned to comment, as his IoT platform serves both these sectors. What does he make of their chances? Will the likes of Audi, Bosch, BMW and Siemens allow traditional network operators onto their shop floors?

“The telcos see an oppourtunity with 5G. But to be honest, without it, they are not really a player at moment. Would you go to a Chinese to order Wienerschnitzel? It’s the same thing: you wouldn’t go to a telecoms operators for your core industrial solutions,” comments Gross.

“But 5G offers an entry point for them, and it may change. They will push hard. Lots of telcos want to work with us to enter that maket. They are coming to us, and we are happy of course to support them. But the reality is, right now, their IoT solutions are build for massive scale [and not for specialist industrial applications].”

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Software AG: “You don’t go to a Chinese restaurant for wienerschnitzel; telcos aren’t players without 5G”
Software AG: “The skills-gap will harm growth; we won’t double sales by relying on data scientists”

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