Software AG CTO on what keeps him awake at night

• It’s those ‘under-the-radar’ stealth startups and their disruption
• The new world will have less human power (Read: Fewer jobs)

 
MANY large companies usually worry about their fellow giants – deep-pocketed and firmly established in the market – and whatever marketing and R&D (research and development) tricks they have up their sleeve.
 
Not so much these says, and certainly not for Dr Wolfram Jost (pic above), chief technology officer of German giant Software AG.
 
His biggest concerns are young startups and companies that are under the radar.
 
“I am not afraid of the ones that I can see; it is those that I don’t see that worry me,” he says, speaking at a recent media roundtable in Kuala Lumpur.
 
READ ALSO: German giant Software AG moving R&D workloads to Malaysia
 
It is not just the software industry that needs to keep on its toes, says Jost, noting other examples: Airbnb has disrupted hotel chains; Tesla is disrupting automakers; and fintech (financial technology) startups are disrupting banks.
 
“If you ask the banks today what are they worried about the most, they will tell you that it is not the other big banks but the young fintech companies that are coming up.
 
“Even in the automotive sector, which is a key part of the German economy, Tesla is showing that cars don’t need to have engine cylinders to run anymore,” he adds.
 
Even tech companies that have a reputation for being innovative have not been spared, argues Jost, although he notes that this has always been the case: IBM didn’t see Microsoft coming, Microsoft didn’t see Google coming, and Google didn’t see Facebook emerging.
 
“The worst comes from things you don’t see and things you don’t believe. I can bet that Microsoft [in the past] did not believe that a company like Google would exist in the future. But it happened, and it happened fast.
 
“The point is, if you see this coming, then it is already over, because it is not that they will take 20 years to develop and give you time to buy them, or to kill them ... it is no longer possible, as it was in the past, for a Microsoft to kill off a Netscape,” he adds.
 
Microsoft was the dominant software company in the 1990s, with its Windows operating system having a higher than 90% market share in the desktop space, but it was slow to foresee the impact of the Internet.
 
When it did, however, and poured its enormous resources into it, it managed to knock Netscape Inc – and its dominant Navigator browser – off the pedestal in a few short years.
 
Jost says that that what makes today’s digital disruption so fearful is that it does not need to be asset-heavy anymore.
 
Today, Siemens has over 400,000 employees while Google has under 70,000 employees. However, in terms of market value, Google – via its holding company Alphabet Inc – is about five times more valuable than Siemens.
 
“Today, if we create new digital companies, we will not have 300,000 employees. This means the new world will have less human power, but more digital power.
 
“This shift, for a country like Germany, is a challenge,” says Jost.
 
As part of Software AG’s efforts to reduce the risk being disrupted by “unseen potential startups,” the company has headed straight into the battle-front, setting up a team in Silicon Valley in the United States.
 
“We have people there to monitor and closely watch the startup ecosystem,” says Jost.
 
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