1. Siemens Venture Capital
Corporate Venturing as an Instrument for Radical Innovation
MOT9556 - Corporate Entrepreneurship
Taha Kachwala - (Student no. 4408225)
Karina Mady - (Student no. 4405404)
Yonathan Widya Adipradana - (Student no. 4389425)
1

2. Contents
Insight Into Siemens.............................................................................................................
PART I: Empirical Approach..................................................................................................
1. Activities and Objectives of Corporate Venturing...........................................................
2. Portfolio Management.................................................................................................
3. Short study of the linkages between business units and different ventures........................
PART II: Theoretical Approach..............................................................................................
1. Corporate Venturing: The Challenges of Integration.......................................................
2. The selection process and criteria for the Corporate Venturing unit..................................
3. External venturing: advantages, disadvantages and challenges to be
overcomed.................
PART III: Individual Case Study............................................................................................
1. Polarion (By: Taha Kachwala)......................................................................................
2. EnOcean GmbH (By: Yonathan Widya Adipradana).......................................................
3. Penrith Corporation (By: Karina Mady)........................................................................
Bibliography………................................................................................................................
2

3.
Insight into Siemens
Siemens is a one of the largest electrical and electronics engineering companies in the world.
Siemens and its subsidiaries employ approximately 343,000 people worldwide in more than 190
countries. It is also the largest engineering company in Europe. The principal divisions of the
company are ​Industry​, ​Energy​, ​Healthcare​, and ​Infrastructure & Cities​, which represent the
main activities of the company.
Siemens was founded as ​Telegraphen-Bauanstalt von Siemens & Halske by Werner von
Siemens and Johann Georg Halske in 1847, specializing in manufacturing of electrical
telegraphs. The newly founded company set up a small workshop in a back building at 19
Schöneberger Strasse.
During the first half of the 20th century, there were a series of mergers and divisions, w​hich led
to formation of three separate companies.
First was the original company - ​Siemens & Halske​, which focused on communications
engineering. Then the 1903 founded ​Siemens Schuckertwerke GmbH devoted to electric power
engineering. Finally the 1932 founded ​Siemens-Reiniger-Werke specializing in electro-medical
equipment.
In 1966, through a major restructuring process, these main companies merged to form ​Siemens
AG​as we know today.
In fiscal year 2014, which ended on September 30, 2014, the revenue from continuing
operations was €71.9 billion and income from continuing operations was €5.4 billion.
3

4. 4

5. PART I: Empirical Approach
1. Activities and Objectives of Corporate Venturing
Siemens Venture Capital (SVC) is the corporate venture capital arm of Siemens AG, which
integrates all corporate venture activities of various business groups of Siemens. It started from
October 1, 2001 [2]. It invests in early-stage technology companies and established growth
companies, focusing on the energy, industry, healthcare and infrastructure markets.
Before SVC, Siemens had a central venture capital organization which was headed by Dirk
Lupberger and individual venture capital units within various business groups. The integration
of these individual corporate venture activities will enable Siemens to make more efficient use
of available resources and will provide greater transparency of all corporate venture activities.
In addition, the combined competences and expertise will create greater value and better
support to customers, portfolio companies and co-investors.
The main goal of SVC is to identify and support young companies worldwide during their
start-up phase (Venture Capital) and to provide established companies with additional capital
for their growth plans during expansion phase (growth capital). This support not only refers to
‘financial support’ but more importantly the critical value that Siemens can give to startups
together with Siemens business units; for example, access to worldwide sales and marketing
channels, R&D support, joint licensing or OEM agreements. ​Through these portfolio companies,
they offer their customers new technological solutions and tap new markets. SVC’s main focus
is on growth segments in the energy, industry, infrastructure, and healthcare markets. It also
invested in ‘Industries of Future’ into start-ups at early stage that can later transform its
manufacturing. The objective is to help entrepreneurs realize their innovative ideas by adding
strategic value at every step.
The aim is to identify innovative solutions from which Siemens can profit and plays a key role in
Siemens' global innovation network. To date, the company has invested more than €800 million
in over 170 companies and 40 venture capital funds.
To achieve its objectives, Siemens divided SVC into four main businesses:
1. Venture Capital - It invests in emerging technology start-up companies and contribute
to Siemens' innovation strategy. A typical investment per financing round is between €2
and €5 million.
5

6. 2. Growth Capital - accelerate growth of established companies in the Industry, Energy
and Healthcare markets and fund their expansion plans. Growth Capital targets the
needs of small to medium-sized companies with investments of €10-30 million.
3. Siemens Global Innovation Partners - create value for internal and external investors:
Siemens' first venture capital fund-of-fund invests worldwide in venture capital and
growth capital funds. The fund’s target volume is US$200 million.
4. Private Equity Advisory Services - offer customers comprehensive and professional
advice, analysis, selection and management of investments in LBO funds, venture capital
funds, secondaries and distressed debt, as well as mezzanine funds.
SVC investment partners are committed to building strong relationships with their portfolio
companies. They have developed a collaborative culture in which they work closely with their
senior management teams to gauge a start-up's progress and determine how best to achieve
quality and sustainable growth​.
Support to entrepreneurs means much more than investing capital. By making full use of SVC
close ties to the Siemens Groups, they identify the right opportunities and secure the needed
resources to act quickly and soundly.
By leveraging the global power and resources of Siemens, they enable entrepreneurs to
increase their visibility in the marketplace and gain credibility, ultimately creating greater
access to worldwide sales and service channels.
They want to be a strong partner bringing substantial and sustainable value over the long run to
entrepreneurs to help them realize the potential of their innovative ideas [1].
There are ​3 objectives​that Siemens actively pursues within its CVC activities.
First objective​: identify and invest in innovative technologies that extends and follows the core
business scope of Siemens.
Second objective​: the support offered by Siemens is not only about investing capital into
businesses and ideas, but also using the network and links of Siemens to aid the entrepreneurs
in their ventures. This is done by finding the relevant business group as early as possible and
creating a link between the venture and the unit in order to maximize the financial success of
the venture and be efficient with resources and time.
Third objective​: SVC activates the increase in the market presence and credibility of the
entrepreneurs by leveraging the influence and resources of Siemens. The exposure to global
marketing and distribution channels is a key advantage for the ventures working with Siemens
as well as the partnership itself, due to Siemens’s prestige and reputation.
The merge of all these objectives results in an attractive ROI for Siemens.
6

7. The image below shows the main blocks of core activities:Financing, Consulting & Coaching, and
Networking.[14]
2. Portfolio Management
SVC aligns and groups their Corporate VC teams and portfolios based on the sectors, or more
precisely Business Divisions of Siemens (Energy, Industry, Infrastructure, and Healthcare).
Within itself, SVC has established an account management structure that assigns different
individuals responsible for different Business Divisions and to network with relevant people in
that division’s field.
In this way, SVC is strongly accommodating to the strategic interest of Siemens Business
Divisions. And as these four divisions essentially belong to separate industry markets, SVC is
positioning itself as an arm for each Business Division to gain insight to potential innovative and
disruptive technologies in their industry.
7

8. The SVC team not only offers financial support, but also play an active role in the growth of
their portfolio companies. They do so by providing strategic management guidance and access
to Siemens' global network of internal and external resources.
SVC have invested over 800 million euros in more than 170 startup companies and 40 venture
capital funds, making venture capital at Siemens an integral component of the Siemens
innovation and growth strategy.
Existing Portfolios
Below are some of the existing portfolios of SVC, categorized by Business Divisions:
1. Energy Division
The Energy sector focus on products and solutions for the generation, transmission and
distribution of electrical energy.
Some of the portfolios that belongs to Energy Division:
● Powerit Solutions, a leading technology provider of intelligent energy management
solutions that provide commercial and industrial end users with automated, dynamic
rules-based control over their energy use.
● Semprius, developing low cost, high performance concentrator photovoltaic (CPV)
modules to make solar power generation economically viable in sunny, dry climates
● Zolo Technologies, the leading supplier of high technology sensor and monitoring
equipment designed to improve the efficiency and reduce harmful emissions (including
greenhouse gasses) from large combustion sources such as coal-fired power plants and
gas turbines.
2. Industry Division
8

9. The Industry sector focus on the fields of production, transportation and building systems.
Some of the portfolios that belongs to Industry Division:
● Electric Cloud, delivers solutions that automate and accelerate the software delivery
process. The company's products help development organizations to speed
time-to-market, boost developer productivity, and improve software quality while
leveraging the operational efficiencies provided by virtual cloud infrastructures.
● EnOcean GmbH, developer of innovative, self-powered wireless sensor technology. The
company manufactures and markets service-free, flexible wireless sensor solutions
based on a combination of miniaturised power converters, low-power electronics and
reliable wireless transmission.
● Flexis AG, an innovative company providing software to the automotive industry and its
suppliers. The company has developed and implemented customer-oriented solutions
that facilitate streamlined customer-order processing as well as continuous and
integrated sales and production planning in the order-to-delivery area.
3. Infrastructure Division
The Infrastructure sector focus on production, transportation, building, and lighting technology.
Some of the portfolios that belongs to Infrastructure Division:
● BuildingIQ, a leading provider of advanced energy management software that actively
predicts and manages HVAC loads in commercial buildings. BuildingIQ’s cloud-based
solution is powering energy and operational savings in buildings across the globe with
reductions in HVAC energy costs by as much as 25 percent.
● ChargePoint, the largest and most open electric vehicle (EV) charging network in the
world, with more than 19,000 charging locations. Ranked #1 by leading independent
research firm, Navigant Research, ChargePoint makes advanced hardware and
best-in-class cloud based software.
● Power Plus Communications AG, a leading provider of broadband powerline
communication systems to utilities for smart grid applications. PPC’s solution uses the
9

10. existing low- and medium voltage grid infrastructure to deliver broadband connectivity,
which allows for a real-time, bidirectional, reliable and cost-effective data
communication e.g. for distribution automation and smart metering.
4. Healthcare Division
The Healthcare sector focus on products and complete solutions as well as service and
consulting in the healthcare industry.
Some of the portfolios that belongs to Healthcare Division:
● Adarza Biosystems, a leader in multiplexed label free molecular detection. The company
can place 100’s of detection antibodies on a single silicon chip and because there is no
label, interference among the detected molecules is negligible.
● Aventura, developed a breakthrough application in virtualization of the desktop. By
keeping the desktop session on the server the roving healthcare worker can access their
desktop in less than two seconds at workstations around the hospital.
● Seventh Sense Biosystems, the pioneering developer of virtually painless blood
collection and diagnostic platforms. Its products are based on the company's proprietary
Touch Activated Phlebotomy (TAP™) painless blood collection platform, with an initial
focus on enabling important diagnostic testing at the point of care by reducing the
discomfort, anxiety and hassle of blood sample collection.
“Industry of the Future” Fund
In addition to the existing four Business Division, SVC has just recently added a new US$100
million fund to be added to their portfolio category. It was started in 2014 and called “Industry
of the Future” Fund.
The Industry of the Future Fund targets investments in early-stage, pioneering start-up
companies with technologies that will transform manufacturing.
Some of the portfolios that belongs to “Industry of the Future” Fund:
10

11. ● Augmate, a platform as a service that creates digital eyewear applications for the
desk-less worker. They provide the essential building blocks necessary for customizable
and scalable business efficiency solutions.
● CounterTack, its real-time endpoint threat detection and response platform, Sentinel,
delivers unprecedented visibility and context to enterprise security teams around
targeted, persistent threats.
● CyActive, predictive cyber security company, which places its clients ahead of potential
cyber threats by predicting and preventing future attacks. CyActive has developed an
unprecedented ability to automatically forecast the future of malware evolution, based
on bio-inspired algorithms and a deep understanding of the black hats’ hacking process.
Portfolio Approach
The philosophy behind the approach of SVC is as Andrew Jay (SVC Managing Partner for
Healthcare Division) pointed out [3]: In Siemens, there has been a philosophy of:
“Let’s invest in this company, let’s learn more about it and let’s see how the business develops.
And it it’s growing the way we want, if it’s attractive, we can acquire it.”
Historically, Siemens has acquired about 10% of the SVC portfolios.
SVC will usually do “straight-line investment”, which means that they will invest on the
products that will be very quickly be folded to the Business Division product portfolio. However,
they also leave some room and sometimes invest in “white-space investment”, where there is
no clear strategic link at the moment with existing Business Divisions.
The “straight-line” investment can be easier to measure than the “white-space” investment.
However, the problem that they occasionally face is sometimes they think a product can fit in
their portfolio, but it may not be possible to make that relationship a reality.
In measuring the strategic benefit of a portfolio, they take more of a subjective view and ask
themselves a question: “Are we getting strategic benefits out of this? Are we pushing the
organization to move forward?” Those strategic benefits are sometimes not in dollars and
cents, but may be more intangible. If the consensus is yes, then they can be sure that they are
doing the right thing.
11

12. Regarding on how SVC deals with their portfolio companies, Jay again pointed out that there
has been a trend on becoming less passive investor of smaller investments. In recent portfolios,
SVC aims to become more and more of a leading investor, and often insisting on getting a board
seat, or at least, a full observer status.
This trend roots out from the decision to become closer and paying closer attention to the
portfolio companies, which will enable SVC to do more good to the portfolio companies and
easing up the internal process of driving the portfolio company forward.
SVC do not usually ask for exclusivity or special rights from investing in their portfolio
companies. However, the one thing that they would like to have is the right of information
should the company go up on sale. That means that if the company is sold off, the company will
give SVC a period of time where they can do essential consideration and if required, make a bid.
Generally the reception for this practice has been good. Because basically, it guarantees an
auction should the particular company go up on sale.
Aside from the abovementioned business units of Siemens , it is important to also specify the
operations of the Financial Services Business Units of Siemens, which closely operates with all
the other business units to provide financial support to their customers ,regardless of the
industry they belong to.
There are 8 business units that handle the financial segments of Siemens around the globe:
Commercial Finance
● Equipment Finance & Leasing - main focus is on the process of acquiring new equipment
for different organizations in diverse industries
● Vendor Finance - offers exploratory solutions to companies so that the end customer
with limited budget can also have access to the products. The focus is on the industrial
sectors, manufacturers ,resellers and distributors. Some of the existing sectors where
Siemens is active: construction equipment, turbines, machine tools, trucks, trailers,
medical equipment.
Project and Structured Finance Power, Oil & Gas
● Structured Finance (Debt & Equity) - offers expertise and financial solutions for both
public and private sectors. The services include : loan advice, investment ,financial
growth and project and infrastructure financing.
12

13. ● Project & Equity Participations - concerned with the healthcare, infrastructure and
industry sectors and handles risk mitigation for Siemens and the partners participating
in the projects of these industries. With a very pragmatic approach, Siemens chooses
their projects by considering the most secure strategy,comprehensive risk assessment
and robust business plan.
● Working Capital Finance - main focus is on providing flexibility to businesses by
analyzing daily operations of their clients and providing solutions for trade finance
facilities, loans and lines of credit.
● Financial Advisory
○ Financial advisory and structuring - financial feasibility of projects, cooperation
with bank and credit agencies
○ Risk/Insurance management services - risk analysis, prevention, mitigation and
transfer
○ Treasury and Financing services - clearing services between the companies
working under Siemens’s wing, transactions and banking systems operations
● Asset-Based Lending - loan that helps generate liquidity for companies financially
constrained but holding good leverage. This type of loan allows the client to access
funds for acquisitions, internal restructuring and business growth.
Project and Structured Finance Healthcare and Leveraged Finance
In addition to the services in Project and Structured Finance Power, Oil & Gas, Siemens also
offers the following in the Project and Structured Finance Power, Oil & Gas sector
● Working and Leveraged Finance - Siemens offers loans to their customers to help them
meet their strategic goals.These can include acquisitions, buyouts,mergers,
expansions,etc. Mainly focuses on the middle market.
● Financial Advisory - advice and expertise in leasing ,viability of projects,international
cooperations with financial institutions and administrative support for the companies
working with Siemens.
Project and Structured Finance Energy Management, Mobility and Industries
The same services as for the Project and Structured Finance Power, Oil & Gas​​business unit
Insurance
13

14. ● Industrial Insurance Solutions - optimization of existing insurance contracts as well as
mediation for the implementation of insurance solutions for areas of liability and
business interruption. It also includes project based risk analysis ,consultancy and
warranty.
● Private Finance Solutions - for employees and retirees of Siemens, attractive and high
quality financial services are available. These include liability, home,accidents, legal
expenses and automobile insurance among others.
Treasury
● Treasury Tasks for Siemens - deals with group liquidities, financial risk optimization and
treasury related activities, such as: bank account management, implementation of
global payments, management of interest rate, currency, credit risks, money stock
control, etc.
Financial & Investment Management
● Financing Services and Investment Management - concerned with mutual and
customized funds. It operates on a quantitative and systematic investment process. A
very flexible approach for customized solutions, including : asset allocation, liability
driven investment, consulting.
Venture Capital (Business Segment)
● Venture Capital and Private Equity - venture capital fund of funds for early stage
technology companies.
3. Short study of the linkages between business units and
different ventures
LanzaTech ​is a company that develops fuels and basic chemicals from industrial waste gases
using biological means[9]. The Siemens Metal Technologies business unit is in close cooperation
with LanzaTech to produce environmental solutions for the steel iron and ferroalloy industries.
Siemens is one of the companies that financed LanzaTech to help them commercialize their
14

15. technology, extend their platforms and build a robust product portofolio. While the Metal
Technologies business unit aids the company on the integration and optimization of the
fermentation process, as a client of Siemens,LanzaTech is using the expertise in the Project and
Structured Finance Energy Management, Mobility and Industries section of the Siemens
Financial Services business unit for marketing and implementation of customer projects.
NextInput ​is a company in Atlanta that has developed a force-sensitive touch interface
technology[10] called ForceTouch. It proposes innovative ways of interaction between users
and electronic devices. The company got in touch with the Siemens Technology to Business
unit via the New Ventures Forum because their business model included partnerships with big
companies. With the aid of a Technology to Business associate of Siemens, NextInput identified
areas where the company could join with the Siemens business units. The Technology to
Business department helped NextInput in the commercialization process and encouraged
innovation. Having Siemens as a partner proves to be a great advantage for small startups
looking for exposure, as they provide the network and contacts the business needs.
Semprius ​develops high concentrating photovoltaic modules. Their technology improves the
solar module efficiency by approx. 34%. CEO Joe Carr had previously worked as a CEO of th e
Siemens subsidiary Osram Opto Semiconductors and has signed an agreement to work with
Siemens on the development of the technology[12]. Following the success of the partnership,
Siemens acquired a 16% stake in Semprius, helping them scale up and reach market maturity.
Martin Pfund, CEO of the Siemens Energy Photovoltaic Business Unit mentions: “Semprius as a
leader in HCPV modules shows us that we have bet on the right technology”[11]]
The CV unit plays a crucial role in the early stages of the start-up companies because they
cooperate and provide funding for the companies when they need it most. This guarantees
Siemens a leading position on possibly new markets and technology. In addition, business units
of Siemens closely related to the company’s profile work together with teams in the relevant
technological divisions of the startup. Siemens can therefore benefit from the technology that
is produced once it has been refined and it is ready for the market.
LanzaTech, NextInput and Semprius are all external ventures, not incubators of Siemens.
Although Siemens has reached these companies in their early stages, there is no strategy for
transferring the project as it is not an integrating part of Siemens. In Semprius’s case, Siemens
acquired a stake in the company once it reached market maturity, changing the strategy from
funding to actual business partnership. In general, the aim for Siemens is to provide funding for
companies in order to tap new market niches and take a leading position in promising areas,
but not to own the actual companies that provide the means to tap those niches. By doing so,
15

16. they minimize the risk in case the company is not successful by investing instead of incubating
or buying it out.
16

17. PART II: Theoretical Approach
1. Corporate Venturing: The Challenges of Integration
Today’s firms and organizations are facing an increasingly competitive environment of
globalization and rapid technological change. To cope with such dynamic environments, firms
need to continuously renew themselves and generate sufficient internal variety.
Corporate venturing is one of the vital tools to generate organic growth and innovation. It
serves as an engine for strategic renewal, and is shown to be associated with higher firm
performance. However, corporate venturing are prone to failure because of many different
reasons.
One of the major challenges that is often cited by CV managers is the project transfers from the
CV unit to mainstream operations. Not surprisingly, there are lots of case of integration
problem because of the different nature between the two.
Exploitative vs. Explorative
Explorative corporate ventures should be managed, organized, rewarded, and judged
differently from exploitative mainstream businesses. These conflicting requirements of
exploitation and exploration lead to paradoxical challenges that are difficult to reconcile in a
single firm, and have become one of the central questions in contemporary management
literature.
The process management in exploitative mainstream operations are often very
efficiency-oriented, which actually works very well with existing products that has become the
major revenue base of the firm. However, this process triggers internal biases that favors
certainty and predictable results, resulting very limited room for exploration and
responsiveness to new customer segments. This kind of situation makes new innovation very
hard to survive and often being left in the sideline.
Disruptive Technologies
17

18. Explorative corporate venturing is often bringing disruptive or emergent technology, which in
itself is a major obstacle to the exploitative way of thinking. Disruptive technologies are often
financially unattractive, consist of still a small market segment, and often seen as not
meaningful contribution to the organizational growth. It is different from the more familiar
sustaining technology that is mostly an incremental “upgrade” to the current products.
Exploitative nature of mainstream organization prefers this kind of more familiar technologies
that have already exist for some time and are well-understood in the industry. It is difficult for
them to shift to disruptive / emerging technologies because it is not proven in the market. And
it will take some time for disrupting technology to prove its performance.
The shift to disruptive technologies is also made difficult because it also often requires a
paradigm shift, a different way of doing things, or even a new business model to utilize it.
Exploitative nature prefers relying on existing solutions that is less risky and that provides more
immediate and likely returns. Because of those properties, disruptive technology often requires
a different management approach.
Managerial Challenge
Not every managers in mainstream business unit have the necessary skills or even trained to
handle this situation. Many managers seem to have difficulties with the challenges of managing
corporate ventures within existing firms. In some cases it requires the manager to “unlearn”
their existing skills and knowledge to be able to “learn” the way and mindset of handling
disruptive technology.
It could also be made worse by the appraisal system that measure the manager’s performance
by the financial target of the division. It puts t
he disruptive technology into the weaker and unattractive position because: as a newly
emerging technology, it could not really compete financially with the continuing products.
Some experienced manager also sometimes falls into arrogancy traps by their plenty of
experience in the existing way of operation, and could not see that the disruptive technology
could be the game-changer in the future industry.
One of the things that is important in handling corporate venturing is the Entrepreneurial
Management (EM) level. With regards to the EM level, we can categorized two types of
management behaviour: Promoter Type and Trustee Type of management.
18

19. Managers with high level of EM corresponds to the promoter type, which is adaptive to change
and driven by their perception of opportunity. This type of managers will be generally better
suited and prepared for new innovation brought by corporate venturing.
On the other hand, managers with low level of EM is the trustee type, which values stability
than any others, inclines to the status quo, and feels threatened by changes. Many senior
management are of this type because of the logical rationale against risk taking. It is logically
not in their best interest to unnecessarily take any risk if the continuing product is still making a
lot of profit.
Ambidextrous Organization: The Chosen Approach
To address the paradox of exploitation vs. exploration, the traditional approach is to
structurally separate new business development activities from the mainstream exploitative
units. The structure granted autonomy that provides ventures with the freedom to experiment,
innovate, and develop new capabilities, at the same time shielding it from forces of mainstream
businesses.
However, a collection of separated units does not really function well as a system. Separating
venturing units from mainstream businesses could create, for example, problems with
coordination, implementation and reintegration. It also limits the possibilities for sharing
knowledge and resources.
In the ineffectiveness of the traditional approach, ambidextrous organization become an
alternative structure to bring the best of both worlds. It establishes an structurally distinct unit
independent from other business unit, but is still tightly integrated at the senior management
level. As such, managing this part-whole relations is one of the key management tasks in order
to successfully venture and innovate.
Integrated, yet Independent
The distinct individual units should remain physically separate with its own processes,
structure, culture, and staffing models. The structure of the unit should not overlap and
influence each other, rather it should reflect the best possible approach to accommodate the
needs of that specific unit.
19

20. To maximize the potential, the performance measure and the reward system for exploratory
unit should also reflect the unique nature of the ventures. It should not unnecessarily follows
the system of exploitative units.
By being differentiated and integrated at the same time, individual units have the freedom to
adapt to local demands, while integration at top management level assures the strategic
sharing and synergy between different units.
Senior management role
The senior management team has an extremely important role in an ambidextrous organization
structure. The senior leadership of all the units needs to be integrated, with common vision and
commitment to the integrated strategic approach. A common senior team reward system is
also an important factor to promote the integrated values together.
Another important thing is that the senior team should be capable of promoting the
exploratory unit and dare to embrace innovation and adaptability, while at the same time still
maintaining the productivity and efficiency level of exploitative business. The senior team
should be able to keep the vision in control and to balance the synergy between units.
Strategic Type of Ventures
A corporate venture could categorically serve to achieve only financial objective, but could also
be a strategic value to the organization. The strategic type of ventures is definitely more
preferable as it would strengthen the whole business of the firm. It is also in line with the
integrated synergy and strategic vision of the ambidextrous model.
The strategic value means that the value of the venture technology or product is not always
able to be counted in terms of dollars and cents, but it could have enable or drive the overall
business in intangible ways. Even if the financial returns are not that great, if for example it
could leverage the existing company resource to create new potential, or perhaps introduce a
new market to help the company to strengthen its position; then the value that it created could
be much greater than its financial calculations and is still considered worthwhile.
20

21. Entrepreneurial Champion
This is not directly related to the ambidextrous organization structure, but it is considered an
essential element for a venture unit leader to be an entrepreneurial champion. A great
innovation is not only about the idea, but also about the spirit of the person sponsoring the
idea.
A champion preferably have already spent some considerable time in the organization, so he
could take advantage of the network and synergy across and within the organization. He also
should be trusted by the senior or middle level management to support his championing.
One thing to take note is that as an entrepreneurial champion is more likely to be very spirited
and passionate about his venture, he could potentially be out of control in his way to achieve
that goal. It is again back to the senior management to keep him in control as not to lose the
overall strategic values.
2. The selection process and criteria for the Corporate
Venturing unit
CEO’s talk about growth and markets demand it [20]. Bringing out profitable organic growth is
difficult and when core business begins to flag, fewer than 5% of the companies regain growth
rates of at least 1% above the gross domestic product. Creating a new business offers one
increasing potent solution.
Research has shown that the companies that have put greater emphasis on creating new
business models or venture into new businesses grew their operating margins faster than the
competition [21]. During the hype of the dot-com boom, many large firms turned to corporate
venturing as a way of promoting innovation, creating window on new technologies, retaining
entrepreneurially minded employees and spurring growth. Many companies created a separate
‘venturing units’ and charged them with the job of investing in a portfolio of new ventures.
Now, after a few years, corporate venturing investments have fallen down by 75%. Many
venturing units including those of Ericsson, Diageo, Marks & Spencer have closed down and
many other are struggling to justify their existence. Only a relatively small amount including
those of Intel, Siemens, Google, Johnson & Johnson, are continuing undeterred with a good
track record and proven business models. The biggest mistakes the former companies made
21

22. was to set up venturing units with mixed-up business models [22]. But the companies that
pursued a single objective with a good venturing model were more successful.
In the coming sections, we will brief up five main objectives that drive the decision to set up a
venturing unit. However, one common objective of creation of a substantial new businesses
and growth by incubating a portfolio of promising new ventures was found to have no
successful business model [23]. The other four objectives along with their associated business
models demonstrated reasonable to high degrees of success ( see “Success Rates for Different
Types of Venture Unit.”).
Ecosystem Venturing ​supports and encourages the companies existing network of customers,
suppliers and other complementary businesses. ​Innovation venturing ​improves the
effectiveness of some of the company’s existing activities. ​Harvest venturing ​increases the
company’s cash inflow by harvesting its spare intellectual property or other assets. ​Private
Equity venturing ​diversifies a company’s business into a venture capital industry.
Ecosystem Venturing
Some companies depend on the vibrancy of a community of connected businesses for their
success. This community includes its suppliers, agents, distributors, franchisees or technology
entrepreneurs. This community usually does not need support from the company other than
through normal trading relationships. However, sometimes a company can improve the
vibrancy of its ecosystem by providing venture capital support to its entrepreneurs.
Ecosystem Venturing is appropriate when an existing business depends on the vibrancy of a
community of complementary businesses and the entrepreneurs in the community do not have
sufficient support from existing suppliers of venture capital. This is required when the are is so
new that the venture capital industry has yet to focus on it.
The pitfall is that if the community is already well supported, the company with ecosystem
venturing unit will struggle to gain benefits. The major pitfall in ecosystem venturing is the
temptation to lose focus and begin to invest in a wider deal stream and seek greater autonomy
than what is actually needed. To avoid loss of focus, the venture unit needs to have clear
objectives, in terms of both the selectors in which it is investing and the relative balance
between financial and strategic returns.
22

23. Innovation Venturing
Innovation venturing employs the methods of the venture capital industry to undertake
traditional functional activities such as research and development [24]. Typically CV managers
should set up a new unit alongside the existing functions. The unit can reward people for value
created, invests in many projects to spread risk, uses joint ventures and links with the venture
capital industry, and can set stage targets to help assess progress. Shell’s Game Changer
program is one of the examples of innovative venturing.
Innovation Venturing is appropriate when an existing function is underperforming as there is
insufficient energy directed towards commercially oriented innovation and creativity. It is a
belief that, by providing the right conditions, internal or external managers with
entrepreneurial instincts will take risks and invest more energy in developing new technologies.
The key pitfall of innovation venturing is to view the unit as a way of addressing a general lack
of entrepreneurial spirit in the company rather than to improve the effectiveness of a specific
function.
Harvest Venturing
Harvest venturing is a process of converting existing corporate resources into commercial
ventures and then into cash. Harvest venturing can therefore be seen as part of a broader
function within large companies whose objective is to generate cash from selling or licensing
corporate resources (for example, technology, brands, managerial skills and fixed assets). In
some cases the resources in question can simply be sold. For example, BG Property was set up
to exploit the large land holdings of BG Group Plc that were inherited from a time when the
company, then known as British Gas, was government-owned. In other cases, harvest venturing
is needed because the resources have no immediate commercial value. The company puts in
place a process for evaluating, investing in and developing these resources as ventures, to the
point where they attract interest from outside buyers.
Harvest Venturing is appropriate under three conditions,
1. Management believes that the company has some resources that are not fully
exploited.
2. Exploiting the full value of these resources requires an establishment of new business,
otherwise the company can just sell or license the resources.
23

24. 3. These surplus resources are not needed either by the existing businesses or as new
growth platforms.
A harvest venturing unit should be cash-driven, i.e. it should be able to turn its new ventures
into cash as soon as possible.
Private Equity venturing
A private equity unit invests in startup businesses as if it were an independent venture
capitalist. The goal is financial: There is no requirement that the unit will assist existing
businesses or find a new growth platform to add to the portfolio. The company is doing little
more than diversifying into private equity.
Research suggests that new ventures supported by corporate investments do better, on
average, than ones that are not [25]. One of the reason for this might be the fact that
investment by a major corporation appears to lend credibility to the new venture.
Having something of value to new businesses, such as a well-regarded corporate reputation or
even access to a market, is insufficient reason to enter the private equity business because that
value can usually be traded, either directly with these new businesses or with an independent
private equity company, without incurring the risks and learning costs involved in getting into
the private equity business.
In order to justify setting up a private equity unit, a company needs to believe that it has better
access to a flow of deals than do independent, private equity companies. This is likely only in
rather rare circumstances when a company can leverage its position in the marketplace or a
proprietary technology.
Apart from ‘privileged access’, managers also need to believe they are tapping into a deal flow
in the early stages of an upswing. Venture activity appears to go in cycles. first, some technical
advance or change in law or in consumer tastes creates a new market and opportunity. Then
entrepreneurs start to exploit these opportunities. Soon this new opportunity has been heavily
overexploited and failures start to increase and outnumber successes. Finally the winners
gradually squeeze out the weaker companies. To make money in this cycle of boom and bust,
investors must invest early and exit before the shakeout, even if they have invested in winners.
The shakeout period is of low profitability and high growth, which is not usually comfortable for
the corporate investor.
24

25. The main pitfall in private equity venturing is hubris. CV managers get attracted to a sector
where others are having success. They enter the market misjudging both, the timing and the
required skills to make it work. Not only do they invest too late in the cycle, often putting
together a second rate team to compete in a booming sector, but they multiply their errors by
overpaying for poor projects, losing sight of their unique contribution (if they had one) and
holding on to investments for spurious strategy reasons.
The best way to avoid this pitfall is simply to avoid getting into the private equity business
unless the company’s internal logic is undeniable. There are also some key business elements
that needs to be taken care of. ​Firstly​, the unit should be fully separated from the company and
have its closed-end fund with a short investment period chosen in light of current private equity
cycle, but of not more than five years. ​Secondly​, it should be staffed with seasoned managers
from private equity industry. ​Finally​, the managers should be evaluated and rewarded as they
would be in the private equity world [29].
Criteria for Selecting the Right Project
Although each models mentioned above is subject to its own pitfalls, the greatest cause of
corporate venturing failure is the CV manager’s inability to define which model their venture
unit is supposed to be following. As a result, the strategic and financial objectives are not clear,
the structure and staffing decisions are out of alignment, and the CV managers find themselves
being pushed in several directions at once.
It is of utmost importance for CV managers to correctly identify in which model their new
venture will fall into. They should also be aware of the pitfalls in every model and act
accordingly.
3. External venturing: advantages, disadvantages and
challenges to be overcomed
External ventures are a good way to broaden the horizons of a company, and even more if the
expertise of the organization are limited in particular areas.
25

26. It is an opportunity to explore, create new partnerships and listen to new ideas. Joint ventures,
licensing opportunities and corporate ventures are means to reach out the to other companies
with the purpose of sharing business ideas, resources, capital and even staff towards a common
goal.
Siemens has taken into consideration a number of factors before investing in external
ventures:
● the advantage in a potentially new market is sustainable and progressive
● the technology developed can and has been proved to work
● the company producing the technology has already some links with past customers
willing to provide references
● the external venture must be concerned with scalability and wish to grow their
business[15].
Taking these factors into consideration , a rough idea about the type of ventures Siemens is
interested in starts taking shape. In essence, the main concern is on scalability, viability of the
business in the market, provability of technology and some positive experience with a
customer.
One of the key factors for the success of companies such as Siemens over long periods of time,
is to always be up to date with the newest technology still in the development phase. By
nurturing a close relationship with the educational system and working together, the company
can be guaranteed an exclusive position at the “top of the food chain”, so to say, being able to
integrate the new technology internally, in various projects.This means that once the
technology is ready to be released onto the market, Siemens holds the competitive advantage
by already have implemented that technology into their products or services. This, in juncture
with a solid position and a renowned name for its outstanding expertise is the key to corporate
success on the long run. A step further is to make the development process accessible to
external partners and individuals.
By taking the “Open Innovation” approach, the company can take a shortcut through the
development process by specifically addressing the needs of the customer and “rapidly
prototyping” in order to have a deliverable product in the least possible time.
While this is an innovative solution with unique advantages, it is also difficult to implement ,
due to data-protection concerns and insufficient culture innovation.IP management, value
capturing are also matters that can cause problems due to conflicts of interest.These conflicts
can lead to the solvation of the partnership and legal action being taken. The process therefore
26

27. needs to be carefully and closely monitored and while it offers a great amount of flexibility and
innovation potential, it also increases the risks of failure.
Thomas Lackner, Head of Open Innovation and the scouting initiative within Corporate
Technology Unit at Siemens mentions that “Open Innovation at Siemens is more about going
beyond the trusted network and identifying obvious connections and increasing our options, as
a complement to internal innovation.”[16].
One of the shortcomings of Open Innovation is that due to the new networks being created are
usually sparsely connected because the tendency is to take the side of the company that you as
an employee are working for: in this scenario, lack of communication , synchronization and
conflicts of interests are all potential problems that need to be addressed.
On the other hand, loosely connected networks enjoy brokerage advantages due to the ability
to arbitrage non-redundant information exchanges.
Another benefit is that the work performed as part of the partnership in open innovation is a
merge between existing internal innovation and new ideas from external partners , which leads
to more radical innovation and potential game-changer technology.
27

28. PART III: Individual Case Studies
1. Polarion - ​Taha Kachwala
2. EnOcean GmbH - ​Yonathan Widya Adipradana
3. Penrith Corporation - ​Karina Mady
28

29. 1. Polarion
(By: Taha Kachwala)
Polarion Software is a leading provider of a 100 percent browser-based and unified platform for
Requirements, Quality, and Application Lifecycle Management (ALM). The company helps
global organizations in a wide range of industries from automotive to medical device and
aerospace -- creators of products that people trust – achieve agility, traceability and compliance
for their complex products. More than 2.5 million users worldwide rely on Polarion to fuel
collaboration; integrate ALM and Product Lifecycle Management (PLM); and more efficiently
bring their high-quality products to market.
Polarion helps organizations unlock the synergies across complex development environments
for applications and embedded systems.
History of Polarion
It was founded by Frank Schroder in 2004 along with his some other TogetherSoft employees.
The first official appearance of the company was in OOP, a conference on Object Oriented
Technology in Munich, in January 2005 [30].
In July 2005, Polarion was certified by SAP® Integration and Certification Centre (ICC) as SAP
partner number 1,000.
Polarion wins “Best Quality Tool Award 2012” at Software Quality Days Conference in Vienna. It
won against stiff competition from IBM, Seapine, Tricentis and many others.
On April 2013, Polarion announced its first strategic partnership with Vector Software. This
would help software development teams to achieve standards and regulation compliance. Later
29

30. that year Polarion entered into a technology partnership with QMetry- A test management
Software company.
Funding from Siemens
On March 06, 2014, Siemens via its Venture Capital Unit, made a strategic investment of $10
million in Series A funding into Polarion. This investment was made so that Polarion can expand
its product development initiatives and better support its rapidly growing community of
worldwide users.
This investment was the first outside funding which was received by Polarion. “Siemens
investment in Polarion underscores the need for enterprises in industries like automotive,
medical devices, electronic engineering, telecoms, manufacturing and aerospace, to gain a 360
degree view of a project’s history, current trends and potential challenges. Marking Siemens’
first foray into Application Lifecycle Management (ALM), this milestone investment will help
Polarion bring its highly sought-after platform to an even greater share of the market.” said
Frank Schroeder, CEO of Polarion.
Ralf Schnell, CEO of Siemens VC, said that they did a thorough analysis of the ALM market
before investing is Polarion. He said that Polarion showed up as the number one provider in its
category and with its agile and scalable technology, Polarion is well positioned to take
advantage of increasing market demand for collaborative, web-based ALM solutions.
On July 16, 2014, Siemens once again invested an undisclosed amount in Polarion in series A
funding [31].
Product Development after Investment
Soon after getting investment from Siemens, Polarion announced the release of its latest
version of software with heavy enhancements. The following list gives the improvements done
by Polarion after receiving the investment.
● Clustering: out of the box capabilities for load balancing and failover strategies
● ReqIF Standard: efficient exchange between manufacturer and supplier
● Easy Planning: flexible and easy release and iteration planning for any
methodology
30

31. ● Enhanced LiveDoc™Documents: more rich text editing capabilities, custom
document metadata, and personal document presentation
● Approval Centre: Easy to use solution for your review and approval process
● BIRT App: reporting across different tools
● Polarion Connector for MATLAB® Simulink: full integration with this popular tool
● Parallelization and more data connection protocols: 5 times faster system
operations
“Ovum is impressed with Polarion Software for its integrated lifecycle solution, where the
traceability benefits of ALM can be fully realized. This represents an advantage over point
software development tools that are unconnected and therefore lack the advantages of the
ALM approach." Michael Azoff, Principal Analyst, Ovum.
Customers were excited about the recent enhancements, and based on the confidence vote
and monetary infusion by Siemens Venture Capital, they were looking forward to expanded
product development initiatives going forward.
Integration with MATLAB Simulink
This integration gave MATLAB and Simulink users Full-Scale Support in Polarion ALM for
traceability from requirements to test cases, models, and Generated Code.
“This integrated solution extends Polarion’s proven ALM technology and addresses the
requirements of a Model-Driven Development process” said Regg Struyk, Polarion Product
Manager.” Our joint customers can now enjoy complete traceability from requirements to test
cases, design models, and generated code. In addition, both MathWorks and Polarion
customers benefit by sharing Apache® Subversion™based projects while enjoying unparalleled
technical support from Polarion Software.”
From ALM to PLM
On May 2, 2014, Polarion introduced a new strategic initiative to help enterprises more tightly
integrate Application Lifecycle Management (ALM) with Product Lifecycle Management (PLM).
The strategic investment of $10 million (Series A funding) in Polarion Software fuelled this new
initiative which allowed the company to expand its technology and services offering. As a result,
31

32. Polarion Software now has a greater capacity to develop a tight integration between their
leading enterprise ALM and PLM systems in order to support Polarion customers in their efforts
to create a tightly integrated ALM-PLM ecosystem.
“Our customers are striving for tighter integration between ALM and PLM, featuring linked data
and processes for seamless synchronization between systems -- this can be the answer to many
of today’s manufacturing challenges such as threats to public safety and expensive product
recalls,” said Stefano Rizzo, SVP of strategy and business development for Polarion Software.
“We are thrilled to now be able to help more of our customers integrate their ALM and PLM
systems, putting software development into the mechanical and Electrical engineering loop
from end to end.” “ALM and PLM are two systems that frequently require two individual and
unique – but complementary processes,” added Rizzo. “Understanding the nuances of each of
these systems and creating a way for both of them to work in harmony is crucial for
forward-thinking enterprises.”
In June 19, 2014, Polarion entered into a reseller agreement with MDS Technology, a leading
embedded solutions company in South Korea. This agreement will allow MDS Technology to
market, sell and locally support Polarion Software’s solution.
On September 25, 2014, Perforce and Polarion partner to tighten security of intellectual
property across the Application development Lifecycle. This integration extends Perforce’s
unique federated architecture across each stage of the software development lifecycle,
enabling better collaboration, access control, traceability, compliance and scalability for
distributed development teams. This improved security, Real-time collaboration, Global
Capabilities, and Automation Improvements.
Polarion software joins Siemens PLM
On September 30, 2014, Polarion Software announced a partnership with Siemens PLM
software on integrating Product Lifecycle Management (PLM) technology from Siemens with
Polarion’s Application Lifecycle Management (ALM) solution. The integration will unlock
synergies between software engineers and their mechanical and electrical counterparts
through unprecedented data federation, interoperability and bi-directional traceability.
Siemens PLM Software is a leading global provider of PLM software and services, and its
Teamcenter® portfolio is the world’s most widely used digital lifecycle management software.
Polarion Software is the creator of the world’s fastest enterprise scale browser-based ALM
32

33. solution. Using the latest technology and unified by design, Polarion ALM provides traceability
and transparency across all software development activities. With embedded software having
become one of the most important components in engineered product advancement, the
orchestration of both lifecycle management disciplines will enable organizations to accelerate
collaboration, integrity and innovation.
“Siemens PLM Software is committed to creating partnerships to help enhance the end-user
experience of our customers,” said Eric Sterling, Senior Vice President, Lifecycle Collaboration
Software, Siemens PLM Software. “We are pleased to work with Polarion Software to provide
open, integrated solutions that improve the productivity of our mutual customers. The
partnership addresses the pressing need for integration across enterprises in industries
including automotive, medical devices, electronic engineering, manufacturing and aerospace,
and we look forward to working with Polarion Software to bring value to large, distributed
teams and enterprises worldwide.”
According to my analysis, initially Polarion was in a ‘Private Equity Venturing’ objective of
Siemens VC. The initial goal was just financial, and there was no requirement that the unit will
actually assist existing businesses or find a new growth platform. The only difference was that
Siemens was a customer of Polarion even before investing in the company. But as it turned out
to be, Polarion ended up as an objective of ‘Innovation Venturing’ as in the end, it helped in
making the PLM software of Siemens create a greater value.
33

34. 2. EnOcean GmbH
(By: Yonathan Widya Adipradana)
EnOcean GmbH is a venture-funded spin-off company of Siemens that use the energy
harvesting principle technology to make self-powered wireless electrical products, such as light
switches and sensors, which could perform without batteries and engineered to be
maintenance-free. This technology is considered to be “green” technology, and primarily used
in building automation systems, transportations, logistics, and smart homes.
‘Torre Espacio’ [26], a 236-metre towering building with 57-floors in Madrid illustrates just how
innovative and functional EnOcean’s technology is. A total of 4,200 wireless light switches were
installed, which saves around 31.5 km of cables. EnOcean’s wireless light switches are
battery-free, which potentially saves around 21,000 batteries over the period of 25 years. This
equals to 41,000 kWh of energy saved for battery production.
Founding and Financing
EnOcean is founded in 2001 by Markus Brehler, a long-time employee of Siemens, together
with four other Siemens employee. That is also where the idea for this innovation bloomed and
the decision to form a company started off. The company name is an acronym for ​Energy and
Ocean​. “What we mean by this is that we are virtually swimming in an ocean full of energy, and
we should learn to use it intelligently”, said its founder and first CEO, Markus Brehler. The
company headquarter is located in Oberhaching, Germany, and it currently employs around 60
people in Germany and USA.
The company was founded only a few weeks after the 9/11 terrorist attack, so at first
“obtaining capital of any kind was extremely difficult, and external capital was impossible to
find”, said its founder and first CEO, Markus Brehler. The founding team were pitching in their
own capital to found the company, and Siemens also participated as minority shareholder.
However that was far than sufficient for stable financing.
34

35. The promising innovative idea nevertheless finally attract several VCs in 2002, with Wellington
Partners and Enjoy Ventures started investing in February 2002. Soon after, Siemens Venture
Capital joined up in April, and BayTech Venture in October. Later on, Emerald Ventures, SET
Ventures, Atmos, and Kathrein Group also joined the list of investors, making the total
additional capital from VCs amounting to around 30 million euros.
Market Acceptance
EnOcean then proving its worth by bringing the first battery-free wireless modules to market
after just over a year. The products quickly gained market acceptance, and today they are being
used in around 250,000 buildings around the world.
The EnOcean products are not only installed in new buildings, but also being used in
renovations of older buildings or retrofittings. For example, the products are used in one of the
historic monument in Dresden, Germany, that prohibits cable installation in some parts of it
due to its historic value.
The role of Siemens Technology Accelerator
The founding of EnOcean traced its starting line at Siemens as an organization, and later on was
also funded by Siemens Venture Capital as one of its VC investors. However, there is another
organizational entity within Siemens that has more crucial role in the founding days of
EnOcean: Siemens Technology Accelerator.
Not all of the inventions that are conceived at Siemens can be directly turned into products at
the company, despite the fact that many of these inventions are innovative and patented
technologies that promise to be very successful on the market. In order to exploit these
technologies’ potential value and the market opportunities associated with them, Siemens
Technology Accelerator (STA) was founded in 2001 as a wholly owned subsidiary of Siemens.
The mission of STA is to identify and implement the best possible strategy for the external
commercialization of innovative Siemens technologies that fall outside of Siemens core
business [27]. In other words, STA serves to recognize internal innovations within Siemens that
did not immediately fit the core and continuing business of Siemens Divisions, and
accommodate these technology to find external capital to spin-off as a start-up.
35

36. STA is focusing itself on potential innovation and disrupting technology within Siemens, and
somehow feels like the polar opposite of Siemens Venture Capital (SVC), which focus on
external technologies that have potential strategic value and interest of the Business Divisions.
EnOcean is one of the first establishments of STA. In STA’s first year, around 250 ideas have
been submitted, from which five of them finally accepted to the portfolio. One of them was
EnOcean. STA was one of the main reasons that EnOcean found its first two VC investor,
Wellington Partners and Enjoy Ventures, in February 2002.
Siemens Technology Accelerator (STA) Portfolio Approach
“Our goal is to rapidly convert innovative business ideas from Siemens Corporate Technology,
the Siemens Groups and the world outside into business successes,” said Dr. Thomas Lackner,
the then CEO of STA [28]. “We go through a seed phase lasting six to 12 months to bring
technologies to a point where they become interesting to investors, who are then willing to
provide venture capital.”
STA Approach Process
STA provides much more than financial support. It employs a proven three-stage approach for
external commercialization, beginning with evaluation, through deal transaction, and on to
portfolio management. Its expert team helps new companies create sustainable business
concepts, develop prototypes, locate customers and obtain venture capital. The start-ups are
36

37. also given access to Siemens’ internal and external networks, which enables them to establish a
range of business contacts.
In exchange, STA receives shares in the new companies. “The basic idea is to subsequently sell
these shares at a profit when the time is right,” explains Lackner. “Ideally, these start-ups will
be launched on the stock market, allowing us to sell our shares as stock packages. Alternatively,
another company might decide to purchase the start-up, including our shares.”
EnOcean: Result of Innovative Technology within Siemens
The founders of EnOcean has developed the technology for five years within Siemens. “We
benefitted from Siemens Automation and Drives, which made its expertise in building
management technology available,” said Markus Brehler.
EnOcean wireless module can transmit data over a distance of up to 300 m without the need
for any type of power supply. That's because the power for the operation of the sensor and the
transmission of the message is generated by the action itself. With a wireless light switch, for
example, enough energy for the radio transmission is generated by the force of pressing the
switch.
The mechanical energy inherent in pressing a switch is converted into electrical voltages by
means of piezo-electric energy converters. This in turn activates extremely energy-saving
circuitry, which sends a coded radio message to a receiver. The latter, which can be located in
the base of a lamp or embedded in a wall, then turns the light on or off.
Fundamental concept of EnOcean technology, developed within Siemens
37

38. EnOcean is one example that illustrates the strength of the network within Siemens that made
the innovative technology available. At the same time, it proves that disruptive innovative
technology that was developed within a company holds a huge potential and can be brought to
be a market leader given the proper recognition and support, as was provided by STA.
It successfully leveraged the resources and technology developed within Siemens that did not
straight away fit with the existing business unit. STA recognize this and successfully bring out
the value and potential of EnOcean.
“Dr. Lackner and his team at STA provided optimal support to EnOcean during the start-up
phase,” said Brehler. “We can now build upon a solid business foundation and thus ensure the
long-term success of our company.”
EnOcean Today: Market Leader & EnOcean Alliance
EnOcean today has become the market leader of energy harvesting industry segment. It
continues to push technology and environmental responsibility to the limits. For 10 years,
leading product manufacturers have chosen wireless modules from EnOcean to enable their
system ideas.
EnOcean Alliance Logo
As the industry leader, EnOcean is also a promoter of the EnOcean Alliance, a consortium of
companies from the world's building sector that has set itself the aim of creating innovative
solutions for sustainable buildings. It was formed in 2008 as a non-profit, mutual benefit
corporation.
The EnOcean Alliance has the largest installed base of field-proven wireless building automation
networks in the world. More than 250 companies currently belong to the EnOcean Alliance.
38

39. 39

40. 3. Penrith Corporation
(By: Karina Mady)
Penrith Corporation was founded in 2005, the corporation manufactures and distributes fully
integrated ultrasound imaging and nerve stimulation systems. It is a company based in
Plymouth Meeting, Pennsylvania.
Siemens has decided to buy all assets of Penrith Corporation in September 2012. The
acquisition was meant to put Siemens in a leading position on the ultrasound market and
expand their presence in related business segments.
The president of Penrith, Michael cannon left its position to become vice president and general
manager of point-of-care solutions for the Siemens Healthcare ultrasound business unit.
The niche in which Penrith operates is concerned with the miniaturization and integration of
ultrasound imaging systems. It was a great opportunity for Siemens to step in and get access to
new market niches by offering viable solutions and exploring other possible branches for
expansion.
Jeffrey Bundy, chief executive of Siemens Healthcare Ultrasound Business Unit commented that
the acquisition is strategically valuable for Siemens because it allows the Healthcare division to
strengthen its innovative potential and competitiveness.
The financial details were not disclosed.
40

41. Siemens has guaranteed that all the former employees of Penrith will have a position available
as part of the Siemens Healthcare division and that the company will keep its original office
place.
With the acquisition,Siemens will be able to tap into other fast-growing areas, such as portable
, point-of-care ultrasound and interventional procedures guided by ultrasound.
At that time, Penrith had not yet marketed a product commercially. However, the company had
received a clearance of 510k for Elettra (compact ultrasound device), as the FDA documents
mention.
A number of patents have been filed by Penrith in the previous years. These patents include:
wirelessly transmitting technologies to send ultrasound data from a transducer probe as well as
a system used to evaluate the signal quality of the imaging data transmitted wirelessly.
The ultrasound market is currently over 3.9 billion $, led by GE Healthcare, holding a 24%
market share. The share of Siemens in this market is 12%, situated third after Philips.
Michael Cannon, former president of Penrith corporation has mentioned:”We are very pleased
to join Siemens Healthcare.Our portfolio and technology competence in the miniaturization of
ultrasound devices will strengthen Siemens’ ability to develop pioneering technologies and
future breakthrough innovations that advance and expand ultrasound’s role in medicine –
specifically, innovations that are tailored to the needs and means of diverse markets. ”[18]
The purchase of Penrith reflects new realities in the field of corporate innovation and
entrepreneurship: growth through buyout of smaller but of good potential start-ups is an
effective approach to innovation in terms of costs and acceptable risks. The advantages are the
41

42. opportunity to tap into new markets and technologies , which are constrained in the case of
in-house development.
Starting from 2012, the Penrith corporation has started operating as a subsidiary of Siemens
Healthcare.
42

43. Bibliography
1. https://www.crunchbase.com/organization/siemens-venture-capital#sthash.yNK7M838.dp
uf
2. http://www.prnewswire.com/news-releases/siemens-sharpens-focus-on-corporate-venture
-activities-and-sets-up-a-new-consolidated-organization-71933862.html
3. Ernst & Young. 2009. Global Corporate Venture Capital Survey 2008-2009: Benchmarking
Programs and Practices.
4. Henry W. Chesbrough. 2002. Making Sense of Corporate Venture Capital. Harvard Business
Review.
5. http://finance.siemens.com/financialservices/us/about_us/business-units/pages/index.aspx
#Project_20_26_20Structured_20Finance_20Power__20Oil_20_26_20Gas
6. http://blogs.wsj.com/digits/2014/09/18/siemens-backs-israeli-predictive-malware-cyber-fir
m-cyactive/
7. http://www.greentechmedia.com/articles/read/sources-emeters-price-to-siemens-was-180
m-to-220m
8. https://www.crunchbase.com/organization/siemens-venture-capital/investments
9. http://www.siemens.com/press/en/pressrelease/?press=/en/pressrelease/2013/industry/
metals-technologies/imt201306468.htm&content%5B%5D=IMT&content%5B%5D=PDMT
10. http://www.ttb.siemens.com/pool/siemens-ttb-new-ventures-forum-2013-digest-final.pdf
11. http://www.siemens.com/press/en/pressrelease/?press=/en/pressrelease/2012/energy/sol
ar-hydro/ex201201024.htm&content%5B%5D=EX&content%5B%5D=E
12. http://optics.org/news/2/6/23
13. Managing Corporate Venturing-Prof.dr. S.W.J. Lamberts
14. http://www.ub.uni-bamberg.de/elib/volltexte/2003/1/rausch2.pdf
15. http://finance.siemens.com/financialservices/venturecapital/our_business/venture_capital
/pages/venture_capital.aspx
16. http://www.innovationmanagement.se/2013/09/05/open-innovation-an-integrated-tool-in
-siemens/
17. http://www.thefuturebuild.com/assets/images/uploads/products/1638/033_ref_citypenrit
h_1008231.pdf
18. http://usa.healthcare.siemens.com/press/pressreleases/healthcare-news-2012-08-21-2
19. http://www.fiercemedicaldevices.com/story/siemens-snatches-pennsylvania-ultrasound-im
aging-startup/2012-08-22
20. See, for instance, R. Gulati (introduction), “How CEOs Manage Growth Agendas,” Harvard
Business Review 82 (July–August, 2004): 124–132.
21. G. Pohle and M. Chapman, “IBM Global CEO Study 2006: Business Model Innovation
Matters,” Strategy and Leadership 34, no. 5 (2006): 34–40.
43

44. 22. H. Chesbrough, “Making Sense of Corporate Venture Capital,” Harvard Business Review 80
(March 2002): 90–99; R.A. Burgelman, “Designs for Corporate Entrepreneurship in
Established Firms,” California Management Review 26, no. 3 (spring 1984): 154–166; R.A.
Burgelman, “Strategy Is Destiny: How Strategy-Making Shapes a Company’s Future” (New
York: Free Press, 2002); R. Moss Kanter, “Evolve!: Succeeding in the Digital Culture of
Tomorrow” (Boston: Harvard Business School Press, 2001); and R. Moss Kanter, “When
Giants Learn To Dance: Mastering the Challenges of Strategy Management and Careers in
the 1990s” (New York: Simon & Schuster, 1989).
23. See R. Foster and S. Kaplan, “Creative Destruction: Why Companies That Are Built To Last
Underperform the Market — And How To Successfully Transform Them” (New York:
Doubleday Publishing/Currency Books, 2001); G. Hamel, “Leading the Revolution: How To
Thrive in Turbulent Times by Making Innovation a Way of Life” (Boston: Harvard Business
School Press, 2000); Kanter, “When Giants Learn To Dance”; R. Liefer, C.M. McDermott, G.
Colarelli O’Connor, L.S. Peters, M.P. Rice, R.W. Veryzer and M. Rice, “Radical Innovation:
“How Mature Companies Can Outsmart Upstarts” (Boston: Harvard Business School Press,
2000); and M. Baghai, S. Coley and D. White, “The Alchemy of Growth: Practical Insights for
Building the Enduring Enterprise” (New York: Perseus Books, 1999).
24. “Innovation and Entrepreneurship: Practice and Principles” (New York: Harper & Row,
1985); and C. Christensen, “The Innovator’s Dilemma: When New Technologies Cause Great
Firms To Fail” (Boston: Harvard Business School Press, 1997).
25. M. Maula and G. Murray, “Corporate Venture Capital and the Creation of US Public
Companies: The Impact of Sources of Venture Capital on the Performance of Portfolio
Companies,” in “Creating Value: Winners in the New Business Environment,” eds. M.A. Hitt,
R. Amit, C.E. Lucier and R.D. Nixon (Oxford: Blackwell Publishers, 2002).
26. http://www.bvkap.de/privateequity.php/aid/665/cat/156/pdf/BVK_EnOcean_GmbH%3A_
Wireless_technology_for_energy-efficient_buildings.pdf
27. http://www.sta.siemens.com/mission.html
28. http://www.siemens.com/innovation/en/publikationen/publications_pof/pof_spring_2002/
start_ups_spin_offs.htm
29. http://sloanreview.mit.edu/article/the-future-of-corporate-venturing/
30. http://www.polarion.com/company/press/archive2004/en/Shroeder_Appointment_Nov-22
-2004.pdf
31. https://www.crunchbase.com/organization/polarion
44