UPDATED 21:14 EDT / JUNE 27 2022

IOT

Industrial giant Siemens to buy Brightly Software in $1.58B deal

The German industrial giant Siemens AG said today it has agreed to buy U.S.-based asset management software firm Brightly Software Inc. for $1.58 billion, with the deal expected to close before the end of the year.

Brightly Software will be integrated with the Siemens Smart Infrastructure division, which sells digital systems that are used to manage building’s security and energy consumption. Brightly sells cloud-based software that collects data from building sensors, then analyzes it to understand where and when proactive maintenance is required. The idea is that it can help stop problems before they occur.

Siemens Smart Infrastructure said Brightly will help it expand its business into the software-as-a-service business, allowing it to access small and medium-sized customers that would rather pay a subscription than purchase an expensive software license. Last year, Siemens said it was looking to enter additional markets and SaaS would be a key part of the strategy.

“Today’s acquisition bolsters our growth targets, especially for digital revenue and software-as-a-service,” said Siemens Chief Executive Roland Busch in a statement. Brightly, whose software is mostly used in schools, offices, hospitals and factories, is owned by the private equity firm Clearlake Capital, which acquired the company for around $500 million in 2019.

Siemens Smart Infrastructure CEO Matthias Rebellius said Brightly’s maintenance asset management offerings are a nice complement to his company’s existing building management software offerings. “An owner of a real estate portfolio wants to optimize its operational expenditure and make sure the asset is more valuable if and when they sell it,” Rebellious told Reuters. “It can reduce downtime and can generate significant savings.”

The acquisition will also add a nice new revenue stream to Siemens’ business. Brightly expects to generate revenue of around $180 million this year, and the market it operates in has an annual growth rate of around 13%, Siemens said. In addition, Brightly’s current profit margin is said to be above Siemens Smart Infrastructure’s own midterm target of an 11% to 16% margin.

“The software markets are consolidating and the smart building space is no exception,” said Holger Mueller of Constellation Research Inc. “So it makes sense that Siemens snaps up Brightly, bolstering its position in the data collection and management automation area and helping to make run buildings more efficiently. For Siemens this is a key step to become more of a subscription, digital and software-oriented business. Let’s see where  this acquisition can take it.”

Today’s acquisition could well be one of many for Siemens, which is perhaps seeing the depressed technology market as an opportunity to expand its presence in additional markets. Rebellious told Reuters the company will continue to target smaller firms.

On a grander scale, Siemens’ ambition is to show it can grow faster than rival industrial firms such as General Electric Co., Schneider Electric SE and Alstom SA by combining its core engineering competencies with digital expertise.

Photo: Siemens AG

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