SIEMENS AG — EXECUTIVE MEMO
"Industrial AI Leadership: Maintaining Competitive Position"
To: Managing Board From: Chief Executive Officer Date: June 2030
SITUATION
Siemens has successfully positioned itself as industrial AI leader. Digital twin and manufacturing optimization products are experiencing 12-15% annual growth. The company has captured significant market share in emerging digital manufacturing software category.
Current State: - Total revenue: €92B (22.7% growth since 2025) - Software revenue: €19B (58% growth since 2025) - Operating margin: 18.5% - Market share in digital manufacturing: 22%
KEY DECISIONS
1. Cloud vs. On-Premise Strategy - Option A: Aggressive cloud-only transition (like Salesforce model) - Option B: Hybrid cloud/on-premise (accommodate customer infrastructure preferences) - Option C: Edge computing focus (manufacturing is often offline/latency-sensitive)
Recommendation: Option B/C hybrid. Manufacturing is distributed and often offline. We should support edge computing, on-premise deployment, AND cloud. This diversification reduces competitive risk.
2. Vertical Integration vs. Ecosystem - Option A: Build all capabilities in-house (digital twins, AI, simulation) - Option B: Partner with AI companies; focus on integration
Recommendation: Option B. Partner with major AI cloud providers (Microsoft, AWS) while maintaining proprietary integration. This reduces R&D burden and enables faster feature iteration.
3. Industry-Specific Applications - Option A: Broad platform approach (serve all manufacturing) - Option B: Vertical-specific solutions (automotive, pharma, semiconductors)
Recommendation: Option B. Industry-specific solutions command premium pricing and have higher switching costs. Develop solutions for 3-5 high-value verticals.
BOARD APPROVAL REQUIRED
- Cloud/edge strategy approval
- Partnership strategy (integrate with cloud providers)
- Vertical-specific application roadmap
- Digital twin R&D investment budget (€2B annually through 2032)
Confidential board memo