UPDATED 21:45 EDT / AUGUST 01 2018

CLOUD

Siemens eyes IoT opportunity as it acquires low-code software developer Mendix

German industrial conglomerate Siemens AG said today it’s acquiring “low-code” software development platform provider Mendix Inc. in a deal valued at about $700 million.

Siemens will pay cash to acquire Mendix, which has its headquarters in Boston. The company will also boost its investment in research and development and global expansion over the next few years, according to a blog post by Mendix co-founder and Chief Executive Derek Roos.

Mendix was founded in the Netherlands in 2006 with the idea of speeding up and simplifying the process of creating business-oriented software applications. It’s one of a clutch of so-called low-code platform providers, which aim to make it easy for people with no coding skills to create new programs. Other low-code development platforms include Appian, Microsoft Corp.’s PowerApps and Salesforce.com Inc.’s Lightning.

The idea of low-code has been well-received, and Mendix got significant funding to grow its platform, landing more than $38 million in a series of rounds headed by investors including Prime Ventures, Battery Ventures and Henq.

Siemens’ interest in Mendix’s capabilities stems from its own efforts to boost its software capabilities in the “internet of things” arena, wherein physical objects are slowly but surely merging with the digital world. Siemens provides machinery for industries including the gas and automotive manufacturing sectors. It has spent a considerable amount of money developing its own MindSphere platform, which is an operating system for the IoT that connects factories and machines to data centers and analyzes data to boost the efficiency of those manufacturing systems.

In his blog post, Roos said the idea was to combine Mendix’s development platform with MindSphere in order to create a “digital operating system” for the physical world.

“With billions of intelligent devices and machines connected to the cloud, organizations will require a new kind of platform to turn these massive amounts of data into real-time business value,” Roos said.

Separately this week, Siemens said it was planning to simplify its business structure while boosting investment into digital products and the IoT, Reuters reported.

What’s interesting is that Siemens renewed IoT push comes at a time when one of its main competitors, General Electric Co., is divesting its own digital assets. They include its Predix platform, a rival to MindSphere, after GE failed to succeed in its own IoT endeavors, Holger Mueller, an analyst with Constellation Research Inc., told SiliconANGLE.

However, Mueller said the acquisition still “makes sense” because Mendix is a “low-code PaaS” and therefore serves a different use case.

“With digital transformation and IoT lagging in Europe, that is still a valid opportunity,” he said. “It’s a European outcome for Mendix as well. Now one can only hope that the fate of Siemens’ digital ambitions will fare better than General Electric’s.”

Roos said Mendix will continue to operate under the same brand and maintain its existing office locations, but will become a part of Siemens’ Digital Factor Division. Roos will remain as CEO of Mendix, reporting directly to Siemens CEO Tony Hemmelgarn.

Image: Siemens/Mendix

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