Thought Leaders in Internet of Things: Sanjay Brahmawar, CEO of Software AG (Part 4)

Sramana Mitra: I didn’t hear you say anything about independent software vendors building on top of your platform. 

Sanjay Brahmawar: I should have mentioned that. We do have a whole ecosystem of ISVs that take the platform capabilities and build their solutions on it. These could be people focusing on specific manufacturing applications or things like overall equipment efficiency. We also offer some of those apps, but there are a lot of these companies that build on top of Cumulocity and web methods.

We are also doing joint ventures. A good example of that is our venture called Adamos. This is with five other machine builders. We bring the Platform-as-a-Service in the stack, and they bring their domain expertise. With their domain expertise, they are building applications on top of our technical stack. This is a great way to bring the right kind of innovation to a specific vertical. 

Sramana Mitra: You mentioned telcos and machine builders. Are those some of your top verticals in terms of revenue? 

Sanjay Brahmawar: When we think about IoT, those verticals are the most important ones. Manufacturing, supply chain, logistics, retail, and med tech. Speaking of medtech, these are companies supplying medical technology which includes equipment that needs to be monitored and managed remotely. Smart city in Dubai is an example and a great customer of ours where they are leveraging our technology. Those are the main verticals in IoT. When we think about hybrid integration, I would add two more verticals to that. Those two are financial services and government. 

Sramana Mitra: Could you double-click down on your ISV ecosystem. How many ISVs are building on top of your platform? What are the nuances of that ecosystem?

Sanjay Brahmawar: We have an ecosystem with over 400 partners. Several of them are software companies or what you would call ISVs who are building their own solutions and capabilities. There are companies bringing sensors and connectivity solutions. We also have companies who implement the end-to-end solution with our customers. The ecosystem is a range of partners. ISV is a big portion of that.

Sramana Mitra: Of these 400 companies, are there startups, or are these mature companies? 

Sanjay Brahmawar: There are some exciting startups and some mature companies as well. There is a startup company called Trailer. They take our Cumulocity IoT platform and they connect commercial vehicles to it. The whole objective is to collect data from the commercial vehicle to understand the fuel consumption. Trailer is helping companies like DHL reduce carbon emissions by almost two tons of CO2 per truck per year. This is a fantastic example of a startup. Now, it is exciting because they are scaling. They are using our technology to able to deliver these solutions. 

Sramana Mitra: What is your business model in relation to these ISVs? Do you take the original Salesforce.com model of a 30% platform fee? 

Sanjay Brahmawar: There are obviously different types of models that are available for more mature companies and startup companies in supporting entrepreneurial customers. We want to get our capabilities in the hands of as many entrepreneurs with new business ideas as possible. You need to have a model that allows a business to work on it and then scale up.

As the scaling up happens, then the monetization happens along with it. This is a model that I believe is the right model to be able to encourage wider acceptance of our technology and at the same time in the long term deliver the monetization. A short-term perspective here is not the right perspective because these technologies are maturing.

The use case is becoming clearer as well. We want to create the model that allows entrepreneurs to start, scale, and monetize together. That is the way that we work. Of course, when you work with more mature clients and mature use cases, then the pricing is slightly different. 

Sramana Mitra: The model platform of pricing is quite standard. You don’t charge people unless they are selling. You don’t charge developers. You let developers develop solutions and only when they sell do they pay a platform fee. 

Sanjay Brahmawar: Exactly. It’s usage-based. We do a lot of partnering with these startups. We make sure that they get all the support that they can get to work with our capabilities. As they scale up and the volumes grow, we give them a different layer of consumption fees. 

This segment is part 4 in the series : Thought Leaders in Internet of Things: Sanjay Brahmawar, CEO of Software AG
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