Siemens buys digital engineering software vendor

By Suzanne Deffree, Managing Editor, News -- 8/22/2008

Siemens AG is continuing it shift toward services, today announcing it will takeover innotec GmbH, a digital engineering software and services vendor based in Schwelm, Germany.

The acquisition will be incorporated into Siemens’ Nuremberg, Germany-based industry automation division, part of the Siemens’ Erlangen, Germany-based industry sector unit, in the market for industrial software.

Siemens boasted that the deal makes its industry automation group the first industrial equipment provider able to offer all sectors of the manufacturing and process industries system-wide solutions for integrating the entire production sequence and production lifecycle.

The innotec purchase, the price of which was not disclosed, follows on a 2007 Siemens industry automation buy of US-based UGS, an industrial software supplier primarily active in the discrete manufacturing industry. That $3.5 billion, product lifecycle management-focused deal was one of Siemens’ first concrete steps away from being a physical product company and toward a services-based company.

More recently, the deal follows on Siemens’ July announced 16,750 job cuts. Those layoffs are expected to save the company $1.9 billion by 2010 and are part of an overall consolidation that will see Siemens tighten its 1,800 separate businesses to fewer than 1,000 and take its 70 regional companies and transform them into 20 regional “clusters” by 2010.

The innotec purchase also follows on early August reports that Siemens is planning to exit its Fujitsu-Siemens Computers joint PC venture.

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