I've received a lot of questions about my thoughts on the recent acquisition. I've spoken to a number of individuals at Mendix to get their thoughts, read CEO Derek Roos and CTO Johan den Haan blog posts, and discussed internally with some of my colleagues at EPI-USE and other Mendix MVP's. My perspective seems to be a bit different than the majority. Now that the dust has settled a bit I thought I would share.
I am very happy for my friends and partners at Mendix. While I thought a different German company that started with the letter "S" was in play to acquire Mendix, I think that Siemens makes for a logical choice for a number reasons I'll unpack. But first I want to say that this establishes a strong statement that we have known but have been waiting for the market to recognize, which is that Rapid App Development (RAD) is not a trend or a phase; it is a viable approach to solving application needs. The largest investment to date in this emerging market proves that Mendix is a leader in the space and RAD is here to stay. The multiples on this deal seem quite high, but if you forecast the trajectory that Siemens does (to make the investments back within four years from what I read), and understand this space like I do, I think you'll come to the same conclusion that the growth targets are aggressive but completely rational. So let's unpack this a bit.
Without sharing any trade secrets, I can tell you that the RAD market is growing across the board and anecdotally, the word has barely begun to spread. If I had the time to research like I enjoyed so much in graduate school, I would prepare survey's to back up my claims and present meaty data to pour over. But what I do know is that the words Rapid App Dev, Mendix, etc. are just starting to find their way into the lexicon of the businesses here in the U.S.A.; The surface has been scratched but we aren't through the clear-coat yet. There is still a lot of education needed in the marketplace as to what these tools and processes are, how they differ from traditional app dev, and the successfull and failed attempts at adoption. And this is just what I'm seeing in the US. World-wide, save for The Netherlands (Mendix) and Portugal (Outsystems), if Rapid Application Development has been fringe here in the States, it has been an odd occasion around the globe.
This is where the acquisition by Siemens makes the most sense. With their global network and resources, they have the ability to greatly increase the Knowledge through marketing development, Positioning to solve app dev issues in a host of industries and horizontals that have never been explored, and Depth of R&D to scale quickly and broadly instead of relying on organic growth. From those three points (Market Knowledge, Strategic Positioning, and R&D Depth), I think this acquisition is a great fit.
In addition, Derek spoke of the autonomy that he and the leadership team have been given to continue to operate "business as usual". That's a positive for the relationships built to date. Partners and Customers want to know that our agreements will be honored and that we don't have to start the negotiation process all over again, and that the steps the team has made to garner success with those relationships to date will continue to be made at a measured pace.
This is also where my concern lies, but I don't want to exaggerate this to seem like a mountain of concern when it is really a molehill. We chose to partner with Mendix years ago because of the synergy between Mendix's customer-centric approach to success and approach to business requirements that aligned closely with ours at EPI-USE. Similarly I have heard many customers reasons for choosing Mendix over alternatives because of that same trust in that culture. If I have but one piece of advice for Mendix, it is to protect that culture of customer-oriented success and stay laser-focused on it. I'm not suggesting Siemens does or does not have that culture; I have no idea never having worked with them. But I have been around a number of these over the years such as Business Objects acquiring Crystal Dynamics, SAP acquiring Business Objects, IBM acquiring Cognos, etc., and eventually the culture changes. It is inevitable. It doesn't mean it is for the best or worse, but change will happen. My ask, and many other colleagues in and out of my company including Mendix MVP's, customers, and partners, is that Mendix keeps the customer success paramount in their culture.
The acquisition is exciting for what this means to the market, Mendix and Siemens, and partners like us, and I think this will be a huge positive for all three groups. Knowing the leaders and staff of Mendix like I do, I don't doubt that they plan to keep that laser focus on the success of customers. Time will tell if they are allowed to do so.