This blog was originally written prior to the close date of the transaction and details the vision behind the acquisition. The acquisition was completed on October 1, 2018.
Today marks the next phase in a journey that started more than a decade ago. I am very excited to announce that we have reached an agreement under which Siemens AG will acquire Mendix for €0.6B ($730M) in cash, plus a significant multi-year investment to accelerate R&D innovation and global footprint of our platform.
I realize this may come as a surprise to many, so let me explain how we got here and why I am convinced this is exactly the right next step for our team, our customers and our partners.
It feels like yesterday when Derckjan, Roald and I first got together in a cafe in Rotterdam to start on this journey. What I most vividly remember about that meeting is our shared vision for the type of company, culture and team we wanted to create. We made a commitment that our company would always have a customer-centric and purpose-driven culture, and left that first meeting with a dual mission, which still drives everything we do:
- To help enterprises innovate through information technology
- Build a culture that is able to attract, develop, challenge and inspire the best talent
The idea of Mendix sparked from our personal experience and frustration with custom software development. We could see that IT organizations were just not set up to deal with the amount of change coming their way, so our thinking was simple – what if we could speed app delivery by an order of magnitude and unlock the entire workforce to participate in the application delivery process? We would effectively eliminate the biggest and most expensive bottleneck in the history of application development: human capital!
And so our quest began.
Never in my wildest dreams could I have imagined what would happen in the next decade. We pioneered a multi-billion software category, with thousands of customers and 100s of amazing partners building incredible solutions. We are the #1 Cloud Company to work for as rated by Glassdoor, we’re ranked as the undisputed leader in not 1 but 2 main software categories by Gartner & Forrester. We have over 60,000 passionate ‘business engineers’ building their careers and great businesses on our platform, and 50+ universities around the world teaching the Mendix-way to the next generation of talent.
And yet it feels like we’re just getting started.
Today’s announcement that we’re joining forces with Siemens marks the next, logical step in our journey to realize our mission.
Let me explain why.
I believe we are at yet another inflection point in our industry.
As the world around us gets increasingly connected, organizations are facing increasing challenges to cope with vast amounts of data and customers are increasingly expecting entirely new experiences and interactions. New technologies like VR, IoT and AI will drive an incredible convergence between the digital and physical worlds, creating entirely new industries and business moments in which people, data, businesses and things work together, dynamically.
This, once again, will put more pressure on business/IT organizations to adapt and change how apps are built and consumed, in ways that few can comprehend right now. And just like we’ve done for web and mobile applications, we also intend to set the direction and lead the market for our customers in this new era.
2 years ago at Mendix World, we laid out our vision for what this means for the future of apps: the smart app, a new type of application that is contextual, proactive and, well, smart. Our CTO, Johan, presented our vision for the smart app at Mendix World, outlining how the smart app is fundamentally different from what most think of as an “app”.
And this is where Siemens comes in.
As one of the world’s largest industrial powerhouses, there are few companies on the planet that are dealing with more mission-critical data and better positioned to blur the lines between our physical and digital worlds. With millions of connected devices and systems, operations in more than 200 countries, and more than 15,000 software engineers, Siemens has access to know-how, expertise and reach few others can match. Even fewer software companies can attempt to compete with such scale in ‘things’.
Siemens has been on a mission to leverage its foothold and data-rich infrastructure in the physical world, to become a leader in the digital world, investing over $10B in the last decade to acquire and build out software businesses, and to create the Industrial IoT platform, MindSphere.
Our two teams first met over a year ago and what started as a discussion about a strategic partnership, gradually evolved into a much bigger vision. The more time we spent together, the more we realized how our visions were aligned. Together with Joe Kaeser, CEO Siemens AG, Jan Mrosik, CEO Digital Factory Division, and Tony Hemmelgarn, CEO PLM Software, we identified three strategic areas where we could win together:
- Accelerate Mendix’ leadership in low-code by doubling down on R&D investments and geographical expansion: By becoming a part of Siemens, we will be able to access an even bigger investment than going public, and we will immediately get access to an enormous global infrastructure that would take much longer to stand-up ourselves. We are committed to extending our leadership in low-code and will significantly accelerate investments in R&D, Customer Success and global expansion.
- Combine Mendix and MindSphere to create the digital operating system for the physical world: With billions of intelligent devices and machines connected to the cloud, organizations will require a new kind of platform to turn these massive amounts of data into real-time business value. By combining Mendix and MindSphere, we will be in a unique position to bridge the physical and digital worlds.
- Extend the Mendix platform to develop world-class and deeply integrated industry SaaS solutions: Becoming a part of Siemens gives us unprecedented access to deep industry know-how, network and expertise. Together with our partner ecosystem, we’ll be able to extend the Mendix platform with deeply integrated vertical solutions across a wide range of industries. Combining low-code with best-practice solutions and templates will provide even more value and speed to market for our customers.
And these are just some of the ideas that we’ve discussed! Read Johan’s blog for his view on the product vision.
So what will this mean for our customers, our team, our partners, and our community?
- First of all, our mission isn’t changing. We’re just going to execute bigger! Our customers will continue to receive the best innovations in app development from our team. We will continue to support the broadest technology ecosystems across all the verticals our customers operate in. Our platform will continue to be open, cloud-agnostic and the most extensible in the low-code space. Our product roadmap and direction won’t change, and we will continue to invest in the partnerships that have made us a leader in our space.
- Second, Siemens is going to give Mendix a lot of autonomy so we can grow even faster. Mendix will operate as a segment within Siemens’ Digital Factory Division. Our company name, “Mendix”, will be retained, as will our unique brand and culture. We will continue to maintain our Mendix office locations and everything that comes with those offices. Our entire team will be retained and continue to be structured and operate as it does today, including our founders and exec team. I will remain CEO of Mendix, now reporting to Tony Hemmelgarn, CEO of Siemens PLM, and the Mendix exec team will continue reporting to me.
- Third, you now have the benefit of working with a leader in the low-code market, who has the might of a multi-billion-dollar, global enterprise behind them. If you’ve ever wondered which low-code platform will have the viability to invest and win in the long term, you no longer have to guess. This commitment and investment from Siemens will allow us to accelerate R&D and geo-expansion investments significantly. You’re going to see faster innovation, more reach and an even better customer experience from us.
I’d like to thank our customers, our partners, our community and our team for believing in our vision and trusting Derckjan, Roald and me through the years. I also want to thank the team at Houthoff, our legal advisor, and the team at Allen & Company LLC, who acted as an exclusive financial advisor to Mendix in this transaction.
At our annual Company Kick-off in January, I asked our team to ‘Lead the Way’. To make our customers and partners successful, to continue being the best platform in our category, to make Mendix the place exceptional talent wants to build careers.
Today’s announcement isn’t the end of our journey.
We’re just getting started!
Co-founder & CEO, Mendix