Dear Roland, first of all, it's great to have you with us. We'll set it up a bit around here. The preparation with you wasn't that difficult because we already know each other a bit. We've had a few trips together. I'm also from Munich, so we're neighbors, although you're actually from Erlangen, not Munich. It's important to you that it's emphasized. The Technical University of Munich doesn't like that because Roland prefers something else. But that's a different matter. You stand like no other for the transformation of a traditional industrial conglomerate. I say conglomerate because in our discussion you mentioned that investors look at a certain point, there's too much in Siemens, and you've made a pretty big shift to this OneTech company. Can you tell us again what you mean by OneTech and what this transformation is all about? Because it's been quite a journey. I've been able to observe it and I'm always happy when we see each other, but also when you tell the story. It's really fascinating.
Yes, I think you are also undergoing a transformation, very good. Well, first of all, the transformation started much earlier. Siemens is over 170 years old and there is a constant: we have always reinvented ourselves. Often voluntarily, sometimes involuntarily. Our communications network business had an involuntary end; disruption really struck there, and we have to learn from that. It started earlier because we began investing in software about 10-15 years ago. Cumulatively, we have spent about 30 billion in acquisitions to build a software portfolio. We benefit from that. I couldn't buy that today; it would probably be three times as expensive. Today, with 6.5 billion in software revenue, we can build the most complete digital twin of products, manufacturing, whatever, and that is an extremely strong base, but that's not enough. Technology is changing so fast that you have to take this transformation seriously. And it is happening against the backdrop that of all the transformations we have made, this is the fastest. I recently said that steam took 60 years, electrification 30 years, to change society, computers 15, and AI will do it in seven, and two years are already gone. So we all underestimate the speed. First of all, transformation comes from the top. You can't wait for everyone at the bottom to realize that something is changing. You have to drive it from the top. The topic of OneTech Company is relatively simple. The capital market no longer sees us as a conglomerate. We are now a tech company, but it still divides our businesses. I always try to explain that the value of Siemens is not in the sum of the businesses, but in the technology platform that we scale across a very broad range. That's not always obvious, but at the end of the day, there are countless examples where the technology we have, from hardware to software, is where the value lies. Recognizing that means it's a tech company that scales technology as broadly and as quickly as possible.
Yes. Okay. So, if you go one level deeper into the organization, you have three strong divisions, I'll leave Healthineers out. What you describe are transversal blocks that go through the entire company. That means you extract value from the divisions that serve the vertical customer.
And how does that work in between? How do you bring that together? Because that generates the value, or that's how I understood it.
Exactly, that's the point, and that's the difficulty because we come from an organization that is very boxed. We have three businesses, 15 business units, and another 15 segments. They all have independence, and it doesn't work that way. I recently said in our management meeting, in English: 'The world is crushing out the small.' Small companies disappear; they get acquired. You need a certain gravitas to scale technology. I can't do that by having 15 or 20 small ships sailing around, each doing its own thing. So you have to focus on horizontal technologies. That means first of all relying on each other. Often it's 'mine is good' and 'what comes from outside is cost' and in doubt, it's bad, and that's a change you have to bring about. We called it the fabric, we change the fabric of our company, meaning a thin layer that holds the company together. Most costs are still in the businesses, but there is a layer of technology that we scale horizontally, and then we want you to use this technology.
I'll give an example, a completely different one. This is about how we use software ourselves, development software. You wouldn't believe it, but we stopped counting at about 700 software tools. I assume there are even more. That can't be. We have 25,000 software developers, and it can't be that we work with 700 tools. There are very good ones that can be scaled up once. That has huge advantages in productivity, use of AI, consistency. You don't have to constantly agree on new tools, and we are now consolidating that. That's a major effort. You really have to say, I'm directive, I'm doing this now. The advantage is obvious. The same applies to software technologies: we use our own technology in our own manufacturing, our own development. That also took time, but you can see it's turning because many businesses recognize the immense value in building on this technology. The more we use it, the more it scales, and it becomes more customer-oriented. So, it's a technological change, but also a cultural change in how we lead and how people behave, and that is probably the biggest challenge.
Yes. I need to go one level deeper. I have to ask again: when I look at Mobility, they still make trains, pretty large devices. You go to Digital Industries, they make small devices, controllers, etc. Do you manage to lay the technology stack across and introduce basic principles? I think that interests many companies. How do you really manage it across different business areas and industries with effect?
That's a good example. About 10 years ago, we switched the control of our trains to our Simatic control. That was also a major effort. It works wonderfully. It's not exactly the same, but we build on a platform. The technology, especially the machine learning core that runs on our trains, analyzes which door on a train will break with a lead time of 5 to 7 days. Why? That's the same core that runs in manufacturing on cameras that analyze weld points. So it's the same technology. Safety technology, we have signal technology in the cloud where we can control all of Germany from one data center. The basic technology for that is also found in safety for large drives or similar. So there are many topics that go across. As I said, it's a thin layer, but it's essential and makes the big difference. In signal technology, we are years ahead; we already have it in the field with customers, others are not that far. So you can scale.
Yes, if you stay a bit with Siemens but go beyond Siemens, you emphasize Industrial AI so much, also for German industry, which as you say doesn't even know exactly what data treasure it sits on. Can you put that in context?
