Siemens announced on Monday that the group signed a historic agreement with the online Chinese giant Alibaba that will open its cloud infrastructure to Siemens digital operating system MindSphere.
The deal was sealed for about 20 billion euros and the two leading companies reiterated their mutual commitments to a multilateral global trade cooperation, that clearly goes in the direction of contrasting the trade war declared by the United States.
China to upgrade its industry
The memorandum of understanding was signed by Siemens and Alibaba Cloud to launch so-called Internet of Things (IoT) products that connect hundreds of different manufacturing devices in China. The deal will be groundbraking for China, since it will help the Eastern country upgrade its industry, Siemens said in a statement. Until now its digital products have been offered only through Amazon’s Web Services and Microsoft’s Azure online platforms.
Competition in the digital market
Siemens is in competition with other big companies, such as the Swiss ABB, in conquering as much fast-growing digital industries segment as possible to offset weaknesses in other parts of its business like large gas turbines. Hopefully, this cooperation with Alibaba will help it make further inroads into China, already Siemens’s third-largest market. “This cooperation is a landmark deal for bringing Industry 4.0-solutions to China as the world’s powerhouse of manufacturing,” said Siemens Chief Executive Joe Kaeser.
What is MindSphere
MindSphere is Siemens’s cloud-based, open IoT operating system that connects products, factories, systems and machines. By gathering information from an array of sensors installed in production lines it aims to increase efficiency and reduce down time for machinery. It is part of Siemens’s booming Digital Factory division, which increased sales by 13 percent and profit by 40 percent in its latest quarter, supported by substantial growth in China.
Under the agreement, both companies will begin collaborating immediately and intend to make MindSphere on Alibaba Cloud available in 2019.