Siemens acquires Mendix to accelerate MindSphere rollout
Siemens announced earlier today that it plans to acquire Mendix, a company that makes what is called a “low code” application development platform. If you program from scratch in Fortran (horrors), C, C++, C#, that’s not low-code. Low-code is a coding methodology (and, in the case of Mendix, tool set) that enables developers to skip the infrastructure parts of a project and use the building blocks of similar projects to get straight to the unique stuff. The way it was explained to me, this is analogous to a recipe for fancy brownies: you start with a mix from a box, then add the 10% or so that makes the end-result special and unique, perhaps cheesecake swirls or fancy toppings. You still have to incorporate the stuff in the box, but save a lot of time in the early stages.
Why would Siemens be interested in a low-code platform? One acronym: IoT. Right now, companies all over the world are reinventing, over and over again, the building blocks in their implementations, connecting sensors to the edge, connecting the edge to the cloud, connecting data to analytics and so on. Until this all settles itself into repeatable, commercial, off-the-shelf (COTS) solutions, low code platforms can simplify these custom implementations.
Too, low-code is a software development method that aims to make the result applications more agile. Again, in IoT implementations, there’s a first concept that’s often expanded, changed, perhaps scrapped, as real-world experience highlights gaps and flaws in the initial implementation. Low-code is a way to conceptualize building blocks that can be swapped in and out, to suit specific needs.
Enter Mendix. According to Siemens, Mendix is going to “accelerate adoption of MindSphere by ecosystem growth and 10x faster application development” — in other words, by making it faster and easier to roll out. Not so much custom as configurable, to use a manufacturing analogy.
Klaus Helmrich, a member of Siemens’ Managing Board said that Mendix will “extend our leading position in digitalizing the industrial world … Mendix is a leader in the rapidly expanding low-code segment and their platform will help our customers to adopt MindSphere even faster by accelerating cloud-based application development for he Industrial Internet of Things (IIoT).”
Siemens will pay €600 million in cash to acquire the company, and it will remain an independent entity within Siemens’ Digital Factory business. Current Mendix CEO Derek Roos stays as CEO of the company and will join the Siemens PLM Software leadership team. In the announcement, Siemens pledged to “continue to invest in Mendix’s independent product roadmap, continuing its legacy as the most- innovative, open low-code cloud platform.” Elsewhere in the press release, the company said that Siemens expects Mendix to “accelerate Siemens’ current cloud, IoT and Digital Enterprise software capabilities”. Siemens ecxpects the transaction to close before the end of the year.
Since Mendix is headquartered in Boston, I predict that we might learn more about the platform at Siemens’ industry analyst event later this month. But the Siemens press release shared that the company was founded in 2005, currently has over 400 employees and follows a software-as- a-service business model. No revenue data, so no way to calculate a multiple.
Siemens announces earnings tomorrow morning, and there may be more details released then. If so, I’ll update.