Interview: Sanjay Brahmawar, CEO, Software AG

Software AG CEO, Sanjay Brahmawar

CIO Australia: You have been at IBM in various roles for the past 16 years. Why did you decide to take the top job at Software AG?

Brahmawar: When IBM launched Watson 10 years ago, my CEO Ginny Rometty decided that she would launch two areas: Watson Health and Watson IoT. In 2015, I was asked to come to Munich and setup the global headquarters there. I set up a new business unit at IBM which hasn’t happened many times in IBM’s history. I was really enjoying that job but then I was approached by Software AG.

I did some research on Software AG and a few things connected with me. One was how the company sits tight into the digital transformation space – they have a core integration pedigree.

Software AG’s portfolio started with transactional database software, managing mainframes and relationships with all the financial institutions, all the large companies in the world so there’s a very strong client base.

But the part that is very interesting is the core integration capabilities with the acquisition of WebMethods [completed in 2007], and I knew WebMethods from my PwC days.

Now, if you look at the challenge of IoT and artificial intelligence (AI), it’s data being collected from all other kinds of devices. That data, you can only get insights that have been combined with other sources of data and these are in your transactional systems, ERP or customer systems.

The only way to do that is to combine IoT platforms and capabilities with core integration – middleware. So middleware doesn’t sound sexy and glossy but actually, it is core.

Number two is that there are 1,500 companies that claim they are IoT providers, about 100 know what they are doing; that’s going to dwindle down to organisations that are really going to be able to provide capabilities.

The difference now really is about companies not getting stuck to one provider such as AWS or IBM Bluemix; they want neutrality, they want the best of AI engines, the best of cloud. So that fact that Software AG is both app and cloud neutral is a real differentiator. We can sit or AWS or Azure.

I was recently sitting with Andy Jassy [Amazon Web Services’ CEO] and having a conversation about how we collaborate. It’s great, I can have the same conversation with Microsoft and IBM. But it gives our clients the opportunity to use our technology and still use cloud in multiple ways.

The third thing is the financial stability of Software AG, it’s very profitable, which is not to be seen in companies that are in the area of IoT. We also have a very good cash flow; when we want to do something, we have the firepower.

If you look over the last nine years, we’ve done over $1 billion worth of acquisitions. Also, you wouldn’t expect a company [valued at] $1.3 billion to be in 70 countries. We can support our customers globally and at the same time, we can be quite nimble.

The fourth thing for me was talent, I’ve met 2,000 people in the last month and we seem to attract really good people. They are attracted to us because of two things – one they like to work with the best technology and two is size – it’s a company where you can [work] internationally and you don’t get lost.

CIO Australia: Software AG has been around for almost 50 years – almost as old as Intel. How has the company survived for so long?

Brahmawar: There are couple of reasons. One we have a foundation [Software AG Foundation started by founder Dr Peter Schnell] that has a 33 per cent stake in the company. Dr Schnell works with social projects such as helping kids of special needs. That’s one of the main reasons that we haven’t been acquired.

Secondly, the ability of the company to evolve – starting with a transactional database which is core to the mainframe and large servers in companies. It’s the most successful and, even today, the fastest transactional database in the world [capable of processing] 1 million transactions per second.

Data explosion is the next trend, the fact that unless you can analyse data and create some intelligence, it is of no use. So IoT and AI is the next step for us now. Fundamentally, we are a company that knows how to evolve.

CIO Australia: You started in the CEO role last month. What are your plans for the company over the next few years?

Brahmawar: I’ve come from a background of bringing together different parts of a [product] portfolio. We are going to help companies accelerate the adoption of IoT. But it’s still a market that is developing, it’s not a market where there are established use cases and companies are buying specific solutions for specific use cases.

But what I strongly believe that if you want to tap into your data, you have to integrate your disparate sources of data. That’s where core integration comes in.

Our capabilities in this area are essential … this is going to be our sweet spot. I am going to emphasise that more and more because it differentiates us in the market. IBM, Oracle and Microsoft can’t do that because they don’t have that combination. 

CIO Australia: Recent Gartner research has suggested that only eight per cent of Australian enterprises are getting results from their transformation activities. Appetites to experiment with new business models is low, ecosystems are being underused, and workforces are unprepared for digital business. What are they doing wrong in your view? 

Brahmawar: It’s not an IT conversation first of all; there’s a very different conversation to be had here when you are talking about digital transformation. It’s not about buying technology. This is the fundamental mistake companies are making or tend to make. A lot of attention is placed on deciding what technology to use, what platform is needed.

The question is, ‘what are you doing when you do digital transformation?’ You change the way you do work. It’s not about bringing in a new ERP or CRM system, or Workday HR software. It means you are changing the way you work … and that is all about culture, mindset and people.

Starting with technology and trying to fit it into your team is the wrong way. You have to start with people and use cases and ask, ‘what is it we are trying to achieve in the business?’ That’s number one.

The second thing people are doing wrong is underestimating the need for talent and the problem that we have today is that talent that you need to tap into IoT and AI for digital transformation is that you need data scientists, you need new skills – not the traditional skills that are coming out of the organisation, the traditional engineering skills that the GEs and Honeywells of the world have. It’s new skills.

Organisations underestimate this completely and don’t invest in trying to bring these new skills on board in their organisations. They buy a lot of technology and they don’t know what to do with it, they don’t know how to use it or embed it in the organisation.

The third [mistake] is trying to do too many use cases. They start with a list of almost 50 use cases when they should not have more than seven to 10.

Get some momentum, show results to your business. Do a scrum for six weeks, take something out, take it to the business and let them play with it. Don’t look for this one ‘big bang’ [project] that you want to do [to prove] that your organisation is now digitally-transformed. That’s the wrong thing. 

CIO Australia: It’s interesting that you mention skills because organisations of all sizes in Australia are grappling with a technology skills crisis. CIOs are having trouble finding the right people in just about every area and salaries are high in key roles such as data scientists. How can we fix the skills issue?

Brahmawar: We have to think about this as an ecosystem; this whole thing about one person or one body being able to solve the problem is the wrong thinking in my mind. I think more collaboration and working in joint teams is the way.

We are all going after the same finite pool of talent. Google is attacking that pool, Amazon is attacking and I am attacking that pool. So we have to collaborate with our customers.

Here’s what we are doing. Yesterday I was with [Malaysian oil and gas company] Petronas in Kuala Lumper and they have the same problem; they don’t have the digital talent in house.

So I said, ‘let’s do the following.’ You have five people, I will give you five experts from my side and we will get them to work jointly in our IoT centre. Let them work on real projects and you can have them back in three months. They become your seats.

You pay for my five people that are training your people because they are actually delivering project work for you. We find a way to create more talent from ‘on the job’ exposure. That’s exciting for the young kids, they want to do lots of things really fast, and they have a big learning curve. This is one aspect, where companies and bodies need to collaborate. 

Secondly, we emphasise too much STEM. In Watson IoT I was recruiting talent, bringing in kids who have studied English literature – it doesn’t matter what they have studied because what we were looking for was that spark to explore and learn.

If they’ve got it, they don’t need a total science background. You don’t need this to work with AI and IoT, the technology is quite simple.

So let’s not overplay the STEM thing too much, there’s a lot more talent out there that we can tap into. Let’s use that talent.

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