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You’ll find a smart city run on an operating system: Siemens CTO Roland Busch

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Roland Busch, a board member of the €79.6 billion engineering and technology company Siemens AG, was appointed chief technology officer (CTO) in December. Like its competitors General Electric Co., ABB Ltd, and Honeywell International Inc., Siemens is digitally transforming itself as well as the industries it serves. In a recent interview, Busch outlined his firm’s digital and India strategy among other things. Edited excerpts: You have been handling different roles over the last 22 years at Siemens. How do they sync with your current role as CTO?

This is the first time in the history of Siemens that we are combining technology and strategy under one board member. Technology is changing so fast, business models are changing—so it makes sense to bring technology and strategy together under one roof and get it going holistically. On the other side, I’m responsible for Asia and Australia as well as for our infrastructure businesses. With increased speed, technology is rolling into new business models and changing all the verticals and markets we are in. This is exciting but it also requires an agile, dynamic adoption by companies like Siemens.What are your top three priorities as CTO?

First and foremost, it is driving digitalization for Siemens. We are leading currently in our industrial areas and we want to build upon this leadership. The second one, also a challenge at a time when technology is changing very fast, is strengthening our innovation capabilities, which can come from the outside world as well as through organic developments. And the last one would be chasing new fields for growth, because some of our markets are slowing down.

How do you plan to achieve these goals?

There are a few mega trends that are driving the world into higher productivity, faster time-to-market and greater reliability and quality. One is digitalization itself, and the main reason for its advance is the rise in sheer computing power, storage capacities and very strong development in algorithms.

Secondly, we have urbanization as a mega trend, which is a growth driver of economies. This is where it all comes to smart cities. Another mega trend is carbon dioxide reduction and emission localization, so you don’t have to do development how it was done in the past. An ageing population is another big thing. According to a study by McKinsey & Co., in the past 50 years, one half of the GDP (gross domestic product) growth was driven by increasing labour and the other half by productivity. In the future 50 years, this half by labour shrinks to just 0.3%. So, how to close the gap with new technologies? This is where digitalization comes into place. The last mega trend is about globalization, but with a local touch. All this provides a push in terms of productivity.

Over the past 10 years, Siemens has invested over $10 billion cumulatively in our software suite. Out of our 30,000-odd engineers and researchers, more than half, around 17,000, are software engineers. But we have to bring that under one roof and we call this roof MindSphere, which is an open, cloud-based operating system for the Internet of Things (IoT). This is important, because you can roll it into healthcare, you can roll it into the energy sector and it will also be—and we are pushing for that—an operating system for cities.

How does Siemens define digitalization?

It all starts with data collection at the lowest layer. We have something like 800,000 buildings, more than 100,000 connected CT (computerized tomography, also know as CAT) scanners and 30 million automation devices—this is where data is generated. The first thing you want to do is get them connected and get the data into your system. It sounds easy but this is a very complicated part. Of course, you have to treat that data and create value out of that data. Here we have to be agnostic— we don’t really want to tell our customers to have the data on-premise or in the cloud. Also, you have to have an asset management structure, and you have to have a certain amount of analytics capabilities—that’s what our operating system brings.

Then comes the real part, so to speak, the extended platform we call the Navigator, which is our platform for managing buildings in a more productive way. Then there is Railigent—our platform for predictive maintenance for trains. We are listening to the trains running over our sensors that can detect, from the sound of the wheels, whether, say, Wheel No. 4 or No.7 is broken and when you should replace it.

FlexLTP is our platform for gas turbines. These are industrial applications that are complicated as you are dealing with your assets, and you don’t want the assets to be down. This is where you also have MindSphere running the plant, which also includes the Industry 4.0 plant—which means everything from product design and manufacturing to the shop floor, the manufacturing execution system, and supply chain and logistics are all integrated.

How is your partnership with IBM for Watson on MindSphere progressing?

Watson is one of the analytics capabilities we have. For example, we are using the Watson engine in our healthcare domain so that you can guide the doctors—through the terabytes of data from pictures from our scanners—to the spot where they really want to look. And it seems that the machines might be even better than the radiologist.

Watson is one element. Another is that we have 200 artificial intelligence (AI) scientists in our corporate technology who are working on deep learning and AI technology and it keeps improving while getting more and more data. We are looking for partners in this but we do it internally as well. MindSphere is an open system and we integrate it with other partners, for instance, Cloud Foundry. Additionally, we also enrich it with experience in our domain know-how in traditional businesses, and we bring both of these together.

What is your India strategy, given that the learning curve in India is different?

We have 4,000 R&D (research and development) people sitting here and they do core software development, not just coding. Also, India is going for 100 smart cities, but a smart city in India doesn’t look like a smart city in Germany or China or any other place—it’s a different animal. That’s the reason we are developing a solution geared for India. You’ll find a smart city run on an operating system—which combines traffic, your grid, the buildings, maybe e-car charging—where the whole thing comes together. And you are going to use this data and build analytics on top of it to create value and manage the city much better than how it used to be.

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