Former Siemens Chairman on the Company’s Software Strategy

The bigger the company’s market share and profit margins are, the more it should beware of complacency, according to Gerhard Cromme, former chairman of the board at German conglomerate Siemens AG, and the current chairman of real estate company Aroundtown Property Holdings PLC.

For daily updates, subscribe to our newsletter by clicking here.

Cromme spoke Tuesday at Calcalist’s WeTechBerlin conference. The two-day event is held in collaboration with Aroundtown, Bank Leumi, one of Israel’s two largest banks, its digital banking subsidiary LeumiTech Ltd., accounting firm KPMG, and European investment fund Target Global.

According to Cromme, the biggest risk to a company’s success is failing to identify when it needs to shift its focus to new technologies. Siemens had to fire 35,000 employees in early 2000s because it did not recognize the shift the telecom industry was going through, he explained.

The restructuring led the company to realize it needs to shift the focus from hardware to data processing, Cromme said. After making over 50 billion euros worth of acquisitions of software companies, Siemens now manages its own cloud and supplies services to other companies, he added.