Siemens reorganizes to integrate digital software and industrial hardware

Siemens CEO Roland Busch is implementing a strategic reorganization to better integrate the company’s digital products with its physical hardware. The goal is to increase profitability to levels comparable with pure technology firms by offering customers a unified system of hardware, software, and services.

As part of this shift, Siemens will consolidate four units within its Digital Industries division into a single automation sector starting October 1. This move aims to extract greater value from artificial intelligence and software embedded in industrial equipment. Busch emphasizes that the company is focusing on the ‘Industrial Economy,’ where AI is applied to design, manufacturing, and asset operation.

Addressing the challenges of implementing AI in industrial settings, Busch noted that while generative AI often provides varying answers to the same prompt, industrial applications require deterministic results to avoid costly failures in production and field operations. This transformation seeks to address long-standing investor criticisms regarding the lack of a cohesive foundation connecting the company’s various business segments.