Global industrial and technology giant Siemens aims to double the digital revenue of its smart infrastructure division in the next four years as it seeks to increase its share in markets including China, India and the Middle East, according to a senior company official.
Siemens Smart Infrastructure, which combines real and digital worlds across energy systems, buildings and industries, plans to boost its digital revenue – generated from software and digital services such as control of power grids, access and smart energy use in buildings – to €1.5 billion ($1.74bn) by 2025 from €700 million it earns currently, Matthias Rebellius, chief executive of Siemens Smart Infrastructure told The National on Tuesday.
“When you look at our distribution, we have a very good share in Europe and America, which is almost 30 to 35 per cent of our revenue and markets in Asia are about 20 to 25 per cent,” Mr Rebellius, who is also a board member of Europe’s biggest industrial conglomerate, said.
“It is a growth market, so that is also why we are focusing very much on Asia.”
As the global economy recovers from the pandemic, Siemens is bouncing back in China, India and the markets in the Middle East.
“These are the growth markets we focus on and [we are] also [trying] to increase our [market] share there,” Mr Rebellius said.
The Middle East, in particular, plays a vital role in the expansion of the company’s smart infrastructure business as economic transformation there is opening new avenues of business.
“The UAE and the Middle East definitely are our focus markets”, he said.
Countries in the Middle East, particularly those in the six member economic bloc of GCC, are radically transforming their economies. The UAE, the second-largest Arab economy, is pushing to develop its technology and scientific sectors as part of its next 50-year growth plans.
The digital economy contributes about 4.3 per cent to the UAE's gross domestic product, which is equivalent to Dh100bn ($27.24bn), according to government data. Expanding digital infrastructure, setting up smart electricity grids and developing new industrial sectors are all part of the government’s growth agenda.
“It is a big transformation [and] transformation needs partners like us who can deliver the technology,” Mr Rebellius said.
The coronavirus pandemic has rapidly accelerated the pace of global digitisation as governments seek to develop smart cities, paperless services, smart energy grids, energy consumption controls and seamless internet connectivity to maintain business continuity amid continued pandemic uncertainties.
Siemens, with 25,000 software developers, is one of the world’s biggest software companies and it invests heavily in developing its technological and digital capabilities as part of its digital strategy. Siemens Smart Infrastructure division uses digital technologies to interconnect areas such as power grids, buildings, factories and mobility, with products and solutions from power grid control to building automation and apps for the future of work.
Siemens as a group annually invests about €5bn on research and development.
“I can tell you that a majority, or the biggest portion of that is invested in ... digital services applications,” he said, declining to give the R&D capital expenditure figures for smart infrastructure business.
Siemens is the Dubai Expo 2020 digital infrastructure partner and its technology has connected thousands of assets on the site.
“More than 200,000 data points, 5,000 doors, 15,000 cameras and all … getting into our IoT system,” he said, adding that the Siemens technology is an open architecture, which could integrate many sub-systems from other vendors and suppliers.
“We started early on investing in digitisation, otherwise, we would not be able to showcase here at Expo what we have done,” Mr Rebellius said.
“It’s a blueprint for future smart cities" which can be replicated across different parts of the globe, he said.
The systems created by the company will continue to evolve as the Expo site turns into a commercial and residential community, once the global fair is over.