Companies don't buy digital platforms, they buy solutions

If you're a long-time middleware and integration software company, how do you stay ahead when the whole world is going to cloud? Sanjay Brahmawar, CEO of Software AG, sees new possibilities on the horizon. I recently had the opportunity to chat with Brahmawar about the rise of the digital enterprise, what it takes to get there, and the new role he sees his company playing. .

Q: What are the pain points for your customers these days? 

A: The biggest challenge for our clients and organizations is what happens to the data that's being created. Data that's either in existing systems or the additional data that they creating from IoT and other opportunities, whether it is mobile or assets and devices that they're connecting. The problem is that the data sitting in very disparate databases, applications or landscapes. Until they can get this data to move around freely, and bring it probably into a data lake or a platform, you can't really apply analytics or any kind of intelligence to that to create insight from that.

Those companies that don't manage to capitalize on that data risk becoming disintermediated, and just become providers of services or information. Then you have the likes of the big players -- Amazon and Microsoft -- that become the major data layers. The biggest challenge for the companies to be able to create that free movement of data and capitalize on it. That is a big integration problem. 

Q: What are the most vibrant parts of your market?

A: We have a target addressable market of almost $24 billion -- the integration and API itself is about close to $12 billion today and it's going to be $18 billion by 2022.  We have a really strong position there. There are parts of that market that not growing very much, but other parts like API management are growing at 15 to 20 percent CAGR, and we have iPaaS, which is growing at a significant pace. 

Q: Software AG offers an all-encompassing Digital Business Platform that covers the range of processes involved in digital transactions. You have brought together many layers of the technology stack. Will this continue to be your emphasis?  

A: Digital Business Platform, DBP, is an architectural layer that provides terms of one picture of what we can offer to our customers. But the feedback from customers very clearly is they don't buy a DBP as such. They have an integration challenge or an API challenge and they want to address that. They have a challenge that is associated with IoT and analytics and they want to address that. They have a challenge around process transformation or portfolio management and they want to address that challenge. 

Q: Your strength has been and medium to large sized organizations with a lot of on-premises software. Are you competing against the cloud providers such as Amazon Web Services, Microsoft Azure, or Google?  

A: I see them as partners. In my first month here at Software AG, I had a meeting with [AWS CEO] Andy Jassy, and they are very interested in working with us. Why? Because we're bringing applications and tools and capabilities on to their their platform, and helping their customers with migrations and transformations. And they see us as a great opportunity to bring workloads onto their clouds.

At the end of the day, customers are going to end up with multiple cloud landscapes, and cloud starts getting pushed down into becoming a commodity. The value has to be brought with applications, has to be brought with integration capabilities, or self-service analytics capabilities. 

Q: There's been quite a bit of angst about artificial intelligence lately. At the World Economic Forum in Davos, Switzerland, there was a lot of talk about CEOs embracing it to the point where its diminishing their workforces. 

My previous job was general manager of Watson IoT. I spent quite a few years asking these questions with many CEOs, who were very keen to understand the impact of AI and IoT.  We are going to find the right way to leverage this technology. and we're going to look at areas where the technology actually makes it easier for us to do things. Does that mean that we will we will reduce some workload or some jobs? Of course that might happen. But then, we're able to use our skills and our talent in different areas. So I don't think we should get worried about it.

I think we should embrace the technology, but be in control of how we want to use the technology. As vendors, we have to have the ownership to be able to debug this, or to demystify and help people understand. Okay, what can you do with machine learning? When can you do with AI? Where can you use cognitive visual, where can you use cognitive acoustics? So these technologies are very, very useful. 

Here's an example. Cognitive visual can do visual inspections of these telecom towers with drones. Then you avoid safety issues, because when you have a person climbing up that telco tower, there's always a risk.  The other thing is to detect rust, this is something I've learned. There's good rust and bad rust. A visual inspection camera can actually detect good rust and bad rust, which the human eye can't do. So you can improve the accuracy of the process and you reduce the safety risk in that process.

Q: How are you dealing with skills shortages that many companies are experiencing?

A: We're all in the war for talent. and we're all going after the same skills. Everybody wants to be a software company or at least have software capabilities. Everybody is trying to attract the same kind of talent. So the challenge is that we're never going to have the right or enough talent. As software companies, we have to come up with self-service integration and self-service analytics. What I mean by that is the customer and the business has to be able to use our capabilities without needing data scientists. We've got to bundle the data into a black box that is very easy to use, like building blocks for our customers and subject matter experts.

Q: What are your strategies for attracting the right talent to your own company?

A: We have challenges. because not only do we want to promote and develop our own talent, but of course we need to attract more talent. If you talk to millennials today, or the next generation, they are more interested in getting more complex experience and in enhancing their skills. I truly believe actually we have some beautiful things to offer talent. It is the combination of a 4,700-family-type company, where everybody feels they are in a family. and then the combination will be able to play with very high tech software. We need to capitalize on this combination of family, plus high tech, and good technology, and global exposure, global experience.