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Siemens is expanding in the Middle East with a $500 million internet of things investment

Key Points
  • German multinational Siemens is expanding its Middle East presence by investing $500 million in the digital sphere over the next three years.
  • Siemens plans to build two internet of things facilities in the United Arab Emirates' Dubai and Abu Dhabi.
Exterior view of the Siemens Forum, part of the Siemens Headquarters, in Munich, Germany.
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German multinational Siemens is expanding its already sizeable Middle East presence by investing in the digital sphere, to the tune of $500 million over the next three years.

The engineering and software giant announced over the weekend its plans to develop digital innovations in the region with two internet of things facilities in the United Arab Emirates (UAE) — one in Dubai and the other in Abu Dhabi.

The projects will be developed on MindSphere, Siemens' open, cloud-based operating system for the internet of things. The company plans to build 20 MindSphere Application Centers in 17 countries, where hundreds of Siemens engineers and specialists will work with customers on projects in machine learning and data analysis.

The MindSphere center in Abu Dhabi will focus on developing operational efficiency for customers in areas like water, waste and oil and gas, while the other, to be located in Dubai, will work on solutions for airports, cargo and logistics.

The internet of things has been described as merging "physical and virtual worlds, creating smart environments" — imagine devices that are connected to the internet and able to communicate with one another.

"The internet of things has arrived and is set to transform industries and cities. However, many companies are still in the early stages of adopting digital strategies and incorporating them into their business models," Roland Busch, chief technology officer at Siemens AG, said in a company press release.

"We see vast potential for the adoption of digital technologies in the Middle East and want to support the region's transformation in various ways, ranging from youth development to setting up our MindSphere Application Centers."

Investing in a new generation

Siemens' investment also includes software grants to university students in the UAE, Egypt and Saudi Arabia to boost digital skills among the region's youth and contribute to a more diversified workforce. These plans fall directly in line with many regional governments' aims to attract private sector job creation while trying to lessen reliance on oil and gas-based revenue.

Other projects included in the investment package involve enhancing digitalization for Dubai's Expo 2020, for which Siemens has been named a Premier Partner for Intelligent Infrastructure and Operations. And in partnership with Expo 2020 Dubai and the Dubai Electricity and Water Authority (DEWA), Siemens plans to develop a hydrogen production facility that uses renewable solar energy for electrification and to help develop a green economy in the UAE, the company said.

Local investors are enthusiastic about the initiatives. Philippe Ghanem, CEO of Abu Dhabi-based investment firm ADS Securities told CNBC, "Dynamic young economies like the UAE can be early adopters and invest in the technology which will drive future development. Whether it is the internet of things or the wider use of blockchain technology, it is entrepreneurial countries, not tied into legacy systems, which are most open to innovation." Ghanem's own company aims to use distributed ledger technology to power its latest trading platform.

With a current workforce of 8,029 in the Middle East, Siemens is familiar with the region and estimates it has created, on average, 135 jobs per year.