German industrial conglomerate Siemens continued its evolution from hardware maker to technology provider this week, announcing the company’s intention to acquire Altair Engineering for around US$10 billion.

Industrial giants such as Siemens rose to dominance by making high-quality physical objects. Lower-cost competition and increasingly complex multistakeholder ecosystems mean this old route to success is no longer sufficient. To survive, industrial firms must move faster, deliver new value to new stakeholders, and respond to the shifting expectations of both their customers and their customers’ customers. We call this digital transformation of traditional manufacturing firms the shift from grease to code, and it can’t simply be about making existing industrial processes more efficient. The acquisition of software firms such as Altair is part of this. The challenge, as always, is to integrate these smart buys into the acquiring firm without giving it indigestion and without spooking — or disappointing — customers.

Altair’s Offerings Complement Siemens’ Industrial Software Portfolio

Altair’s still best known in the industrial space for its simulation, modeling, and high-performance computing (HPC) capabilities, which complement Siemens’ mechanical and electronic design portfolio. Altair’s data analytics and AI platform, RapidMiner, was acquired back in 2022 and was evaluated in The Forrester Wave™: AI/ML Platforms, Q3 2024. Report authors Mike Gualtieri and Rowan Curran celebrated RapidMiner’s “exceptional” user experience but also noted that “Altair needs to boost its roadmap to keep pace with the platform capabilities being added by other vendors.” Siemens’ deep pockets will come in handy if it feels that RapidMiner’s shortcomings should be addressed to deliver maximum value as part of the Siemens portfolio.

Another recent Altair acquisition, Cambridge Semantics, was apparently being integrated into RapidMiner, but Cambridge Semantics’ Anzo graph database might also be of interest to Siemens in its own right, as it could help Siemens’ knowledge graph ambitions. A customer quoted in The Forrester Wave™: Enterprise Data Fabric, Q2 2022 commented that “Anzo is a foundational piece that allows us to integrate and harmonize structured and unstructured data together,” a use case to which Siemens’ industrial customers can certainly relate. Altair’s text mining could offer Teamcenter X a means to parse voice-of-the-customer insights and regulatory compliance text into product lifecycle management requirements.

For clients using complementary products from Siemens and Altair, this acquisition is likely to be good news. Those with use cases served by products from both vendors will have questions to ask, reassuring themselves that any pruning of overlapping product lines works to their benefit. Siemens customers who currently trust an Altair competitor for their simulation, modeling, or HPC needs should be reassured by Siemens’ current enthusiasm for promoting openness and interoperability but may wish to take a fresh look at the Altair portfolio when it’s time to renew contracts.

Altair doesn’t only serve the manufacturing sector. Customers in industries such as financial services will need to be reassured that their interests — and the product roadmap on which they depend — will still be served. There’s no need to panic, but it wouldn’t be a bad idea to keep an eye on some of the alternative vendors in The AI/ML Platforms Landscape, Q1 2024, just in case.

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