When in the Automation component business, (PLC's, temperature controllers, motor controllers, etc.) the next logical step is to add value to those components by integrating them into a functioning machine. Being brand independent is a show of good faith. Many Factories have their own control platform and want to keep with their current brand.
Most generic automation components are made by many different brands so that does not prevent an integrator from using an installed brand.
So for example, if Siemens is selling PLC's and providing a service to go with them, it would be writing ladder code and system integration. This service if done right could provide a higher margin than the component business.
One of the positive byproducts of offering services may be that Siemens will have more quality control over installations and upgrades. For some of the more complex vendors, the system gets set up, but many of the bells and whistles don't get deployed. With a services arm, it may be easier for Siemens to keep a hand in the game to make sure the customer gets full use of the technology. That would require hanging around post installation in a service role. I would guess that would be part of a service package.
Siemens was emphatic that the services push is not going to hurt solution providers and partners, and they're clearly committed to that position. In practice, this means that the squishy overlaps which will inevitably arise early on will have to be addressed agressively, to build up a reservoir of goodwill with the third parties.
Good observation, Jack. Siemens seems to be doing some significant expansion in the past three or four years. It would seem almost inevitable they would stumble into the markets of their partners. But who knows. They're a smart company. They may be making accommodations to distributors as they introduce new services that overlap. Did you get any feel for this at the briefing, Alex?
I wonder how Siemens foray into providing technical service will affect their distributors. A lot of these small local companies make a good chunk of their revenue on support services (or give them away as a means of building the relationship).
Alternative energy seems to be the key here. Wind and solar will require infrastucture changes. And if the electric car market takes off, capacity will have to be boosted. This is good timing for Siemens.
It is very interesting to see this revelation being posted. An area that is very near to my mind is "cloud computing" which Siemens is all ready in this realm. I see this as a huge offering to manufacturing. Interested to see if anyone has thoughts around this or experience through Siemens in this realm.
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