- May 27, 2011
Automation.com, May 2011
By Bill Lydon, Editor
ABB creates new role, appoints Brice Koch, to oversee relations with ABB‚Äôs largest customers and the development of opportunities in strategic growth areas such as rail, wind, water, solar, energy efficiency and smart grids. Koch will also be responsible for developing ABB‚Äôs service business.
ABB Solution Focus
By Bill Lydon, Editor
I recently had the opportunity to interview Brice Koch, Head of Marketing and Customer Solutions for ABB. He is a member of the ABB Group Executive Committee. This is a new position for ABB, created on Jan. 1, 2010 and described as a position to drive additional growth across the company’s markets and regions. Koch is also Chairman, ABB Technology Ventures Ltd. in Switzerland. Regarding his new position, Koch commented, "The world is increasingly integrated, creating new challenges for our customers that require novel solutions. We want to be indispensable partners for them in this new environment by listening carefully to their needs, combining and improving our offering in pragmatic, innovative ways, and by pioneering entirely new ideas."
In his role, Koch is responsible for overseeing relations with ABB’s largest customers and the development of opportunities in strategic growth areas such as rail, wind, water, solar, energy efficiency and smart grids. He will also be responsible for developing ABB’s service business.
Koch had been manager of ABB’s business in China and North Asia since January 2007. His career includes various positions within the Power Products division since joining ABB in 1994. Koch, a French national, holds a degree in Mechanical Engineering and a PhD in Materials Science, both from the Swiss Federal Institute of Technology (ETH) in Zurich.
Joe Hogan ABB Chief Executive Officer commented on this new position at the ABB Annual General Meeting April 29, 2011. Hogan stressed, “Business as usual is not an option to deal with either the opportunities or the challenges that we face today.” “First and foremost we are making sure our attention is firmly focused on the world outside ABB. This is one of the main roles of the team set up last year under Brice Koch and of the position taken up by Frank Duggan (Head of Global Markets) on the Executive Committee in March. As head of Global Markets, Frank will ensure the regional perspective and opportunities receive our full attention, while Brice is working to ensure that we serve our customers the way they want to be served and to harness what we have to offer across the Group.”
In our discussion, Koch talked about comprehensively combining both power and automation products and services from the five ABB divisions in ways that make sense to customers. Prior to this approach, ABB has been looking too much at the market as a “slice of one of the five divisions.” Koch emphasized that this is a new, “holistic” way to serve customers to meet new applications, new demands, and new solutions for customers. Describing his role, Koch told me, “Our team oversees all the big accounts, we have venture capital funds for investments in innovation through ATV (ABB Technology Ventures), we have the smart grid initiative, energy efficiency (which covers more than 50% of the portfolio), and the service business, which includes retrofit and lifecycle sales - all that is coordinated through my function. We keep the primary P&L in the divisions but my team puts it all together in order to create additional, profitable growth.”
Koch very candidly commented on ATV specifically by noting that they have learned that ABB may not always be the “only innovative guys on the planet” and there are lots of smart, agile companies that would be beneficial to work with. He cited ECOtality as an investment example in a company that has 10 years of accomplishments in the areas of electric transportation and storage technologies where ABB is now very active. ABB can strengthen ECOtality with investment and will in turn become stronger by working with ECOtality.
While discussing how this holistic packaging of technologies will deliver better value to customers, Koch cited data centers as an example where there is great opportunity that had been approached “piecemeal” by each division. Now that they have put the picture together and defined a power distribution solution set for the data center market it is clear that it is a large market opportunity when approached with a solution.
Brice Koch described key areas that ABB has targeted to deliver comprehensive solutions:
He described the Smart Grid as having five areas of opportunity for ABB - renewables, demand response, storage, E-mobility (charging infrastructure), and power distribution automation.
Today typically 25% of electrical or diesel locomotive content is equipment from four different ABB divisions including drives, motors, converters, controls, transformers, and switches.
ABB has been supplying components to the wind power industry since the mid 1970s and produces the main electrical drive train components that generate the electricity, including the generator, the convertor, breakers and switches to protect and disconnect the electrical systems, motors for yaw and pitch control and other auxiliary systems, PLCs for turbine control, transformers and medium-voltage switchgear to connect the turbine to the wind park collection grid.
ABB draws on its complete power and automation portfolio to serve the water sector, providing products and systems for water transmission, distribution and irrigation networks, desalination plants, and water and wastewater treatment plants. ABB has some interesting products for the water industry including sophisticated water leakage management software that helps water utilities reduce waste and increase revenues.
ABB contributes to energy efficiency improvements in two key ways by providing specialists capable of appraising and monitoring how energy is used and of identifying specific areas for improvement; and by providing the equipment, systems and solutions to reduce energy consumption and losses, improve productivity and manage equipment and processes more effectively.
While discussing energy efficiency, Koch described how, “Customers are more and more interested in getting a package.” He emphasized they want someone to guarantee their energy savings overall. The people deciding on capital expenditures (CAPEX) are not the people that get the benefit which creates the need for a better approach to these applications. I asked if ABB is doing energy services contracting to address this and Koch said they have started in Europe and Asia. They have specialists today who perform plant energy surveys and typically each survey results in a few hundred recommendations. ABB also plans to have more energy consultants in North America to support energy related sales.
ABB technologies control and integrate electricity generated by the two main types of solar generation - photovoltaic (PV) and solar thermal (also known as concentrated solar power, or CSP). ABB delivers a complete modular, 1-megawatt (MW) PV generating solution and also provides components such as low-voltage AC and DC equipment, motors and drives for solar trackers, high-efficiency solar inverters, control and monitoring systems and a calculation tool for optimal PV layout and generating capacity.
Overall the goal of ABB is to make it easier for the customer to work with ABB by comprehensively combining products to deliver solutions.
Regarding renewables, ABB has been actively investing in this technology area. The company sees different technologies that are coming very close to coal in terms of production costs. Koch described that this is how ABB is investing in different companies such as Novatec Solar and Aquamarine Power (wave electricity generation) to understand where to the technology will be in the future.
Their interest is providing the most innovative products for controlling, managing, and distribution of electrical power. According to Koch, “By exploring different technologies and different market approaches, we increase the likelihood of finding those that will address customer needs, keep us ahead of competitors and lead us to new growth.”
Thoughts & Observations
This is a corporate level initiative and Brice Koch described the mandate been given to him by the board and Joe Hogan. ABB is a company with a heritage of strong engineering to deliver technical products. Combining products to meet customer needs is following an old adage in marketing and sales, “People don’t buy the drill, they buy the holes!” This strategy is leveraging the technical products to deliver solutions.
Koch was clear that this is a customer facing approach to best meet their needs including product, service, and appropriate sales channel (direct, distribution, system integrator, etc.).
As Chairman of ABB Technology Ventures, Brice Koch is looking at both markets and technologies to broaden ABB’s horizons.
The creation of Brice Koch’s new position and the creation of ABB Technology Ventures further illustrate the changes Joe Hogan is making to improve ABB by doing new things that leverage the company’s products, organization, and technical strengths.
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