Why Zementis and Cumulocity are significant acquisitions

As many of you may know, we made a couple of exciting acquisitions in the past few months: Zementis, the predictive analytics company based in the U.S., and Cumulocity, the IoT device connectivity and management organization, a spin-off from Nokia Siemens Networks based in Germany. We've partnered extensively with both organizations over the past two years.

In this article, I’m going to explain why we decided to acquire these organizations, the value they bring and how they fit into our broader IoT strategy.

Issue 2, 2017 Download PDF

Implications of the IoT

No one could have failed to miss how significant IoT is becoming. Not just in terms of smart watches or connected cars but in industry and commerce too. Manufacturing organizations can save a fortune by preventing unplanned downtime due to unexpected machine failure, retailers can increase customer satisfaction and profitability by adding value through location aware services, and banks can reduce fraud by identifying anomalous patterns in card use—for example, a card being used in two different places impossibly close together in time.

Of course, none of these are new ideas. What’s changed is that, with the advent of sensors that can detect tiny manufacturing faults that would lead to a device failing, in-store cameras that can monitor how customers move through the shop so that queues at the tills can be minimized and so on, we get to understand how things like our products and our customers behave at a very granular level.

This also brings challenges: On one side, organizations need to maintain, connect to and manage all of these devices. They then need to take the mountain of data these devices create, make sense of it and turn it into value. On the other side, companies need to integrate this technology with their existing systems whether to fetch relevant customer information or to initiate an action based on a perceived opportunity.

Software AG offers best-in-class IoT capabilities

Software AG has long had a clear advantage through world- beating technologies, such as Apama and webMethods Integration Server, which is why companies such as Schwering and Hasse started using our technology for IoT applications long before it become the big, exciting topic it is today.

That said, with more than 400 disparate organizations providing many, varied parts of an IoT solution, it’s clear that no single company can provide the complete set of capabilities that covers every eventuality for every organization. What we offer is a set of best-in-class, well-integrated IoT capabilities around the areas we are strongest: IoT analytics, IoT integration, IoT hub and IoT process modeling and portfolio management. These platform services enable organizations to build their own innovative IoT solutions by leveraging our technologies to speed the process.

Where we feel we can add further, complementary value to our existing products, we have partnered with (and, ultimately, acquired) organizations such as Cumulocity and Zementis.

Zementis and predictive analytics

Zementis delivers the ability for organizations to take predictive models and put them into production without having to write code. These predictive models look for patterns of behavior in past data such as when a component is likely to fail in order to predict that event happening again in the future.

These models are built using predictive analytic modeling tools from organizations such as SAS®, Knime®, SPSS® (in fact anything that can export PMML). Typically, companies have had to spend months re-coding the models in something like C++. Zementis completely eliminates this hurdle, enabling error-free predictive models to be put into production in minutes rather than months.

Predictive analytics is a key part of our IoT and streaming analytics propositions, enabling the Software AG Digital Business Platform to execute predictive models. Having been an OEM technology partner for predictive analytics for the past two years, Zementis has proven to be extremely important for mission-critical analytics capabilities and our value proposition in IoT. There is no clear alternative vendor that can provide this capability so it became a natural next step to acquire them.

Cumulocity provides device connectivity & management

If doing something with the data is important, being able to connect to and manage the devices that deliver these nuggets of gold is equally important. Cumulocity enables organizations to securely monitor, manage, connect to and update their IoT devices all using industry standard protocols.

Device connectivity and management is another key part of our IoT proposition and Cumulocity, having been an OEM technology partner since the end of 2016, has proven to be highly important enabling us to provide complete platform integration with, and propel our strengths towards, device connectivity.

Acquisitions provide new value

Our IoT platform services support the multi-vendor landscape out there, guarantee independence from any cloud infrastructure and allow customers to own and maximize the true value of their data. With customers such as Bosch, Lexmark and Octo choosing Software AG for their IoT solutions, it shows that we have a winning combination.

In summary, IoT isn’t just a strategically important market for Software AG, but a rapidly growing one too. Zementis and Cumulocity are vital technologies in delivering on this vision and we have great pleasure welcoming them to the family!