- January 28, 2014
- Schneider Electric
By Bill Lydon, Editor
With this acquisition, Schneider Electric significantly enhanced its position to serve the process industries and now has a complete portfolio of products to serve the entire industrial and process automation industry. This article highlights a few key aspects of the integration of the two companies.
By Bill Lydon, Editor
On January 17, 2014, Schneider Electric completed the acquisition of Invensys. On January 24, 2014, I had the opportunity to speak with the two key people who are managing the integration of Invensys with Schneider Electric, namely Clemens Blum, Executive Vice President of Schneider Electric’s Global Industry Business, and Mike Caliel, CEO and President of Invensys' Software and Industrial Automation. Both Blum and Caliel have been involved in the due diligence and other activities before the close of the sale. Currently, the Invensys organization is managed by Mike Caliel, who reports to Clemens Blum. Both men are industry veterans and, based on discussions with each of them individually, I believe they have a solid understanding of the automation business. It was noted in our discussion that the Invensys fiscal year ends on March 31, 2014.
Clemens Blum, Executive Vice President of Schneider Electric’s Global Industry Business (right), and Mike Caliel, CEO and President of Invensys' Software and Industrial Automation (left), discuss the integration of Invensys.
With this acquisition, Schneider Electric significantly enhanced its position to serve the process industries and now has a complete portfolio of products to serve the entire industrial and process automation industry.
Blum described how the acquisition of Invensys provides Schneider Electric with good access into the process and DCS markets. He noted this was one key advantage of the acquisition. Alternatively, the investment to build a process and DCS capability with Schneider Electric’s current products and organization would have required a significant amount of time, money, and risk. Invensys has a large installed base and established brands, including Foxboro, Eurotherm, and Triconex that are complementary add-ons to Schneider Electric’s offerings. Blum also discussed the strength of Invensys people who understand the process control industry and products and have project execution proficiency. In addition, he talked about the strong advances of the Invensys (Wonderware) software portfolio. Blum acknowledged that the knowledge and knowhow of Invensys people is a fundamental and important part of the acquisition.
Blum identified the three top priorities of the integration are:
- Continued Business Flow
- Maintain Customer Continuity
- Excellent Employee Experience
Last week, the company held their annual leadership forum in Berlin, which 700 Schneider Electric personnel and the top 100 Invensys personnel attended. In the forum discussions, attendees focused significantly on the exciting technical and business opportunities that will result from the integration.
Clemens Blum noted that merging the cultures is a very important "people" part of the integration process. The company had an external consultant do a survey of Invensys and Schneider Electric employees to understand the cultural differences and similarities. Blum said that the consultant reported a striking commonality of values between the two organizations' employees. Mike Caliel noted that employees are very excited about the potential to leverage Invensys technologies in the discrete and hybrid industries in addition to exploiting Schneider Electric’s capabilities in heavy process industries.
In the discussion, I asked about the existing Wonderware software distribution channel. Blum noted this is an important group that provides strengths, and the combined organization wants to build upon this as an important asset. Blum went on to say that the Schneider Electric software team will report into the Invensys industrial software group, and the combined group will serve all vertical industry initiatives.
The Wonderware software products and ArchestrA platforms are significantly more advanced. The refined software architecture would be a huge positive asset if Schneider Electric leverages it throughout the company. The Wonderware organization has a stable of talent with knowledge, knowhow, and expertise that is some of the best in the industry. The Wonderware distributor/partners may be the strongest software delivery organization in the industry, and it is one of the reasons companies like Citect found it difficult to gain major market share.
Invensys has been a leader in the vision and development of their Enterprise Control System (ECS), initially launched in 2009. The foundation of ECS is an integration framework that ties applications together in an open Services Oriented Architecture (SOA), allowing systems to be deployed with standard components with minimal customization. The open ECS SOA framework enables the Invensys partner ecosystem to add and extend the capability of the software. This extensibility enables the system to meet varying industry and global needs, solve a wide range of customer problems, and improve efficiencies. The ECS framework encompasses manufacturing business systems, including manufacturing execution systems, ERP, production control and process control.
Plant Structure PES & Foxboro Evo
In February of 2013, Schneider Electric announced the PlantStruxure PES (Process Expert System) saying, "It is the innovative Process Automation System that brings together the best from the PLC/SCADA and DCS worlds and combines this with integrated energy management features." This has been a trend that virtually all the PLC manufacturers have been following to pursue the process industries. The stickler in this strategy is that Schneider Electric does not have process instruments, process controllers, or a DCS system. Schneider Electric PLC products and software are an extremely weak fit for process applications and lack fundamental process functions. Invensys technologies can certainly solve this problem.
The Invensys acquisition positions Schneider Electric to pursue complex process applications, particularly with well-known process industry products, including Triconex and Foxboro, and sell more electrical products into these process markets. This is comparable to the advantages enjoyed by Siemens and ABB.
I asked Blum and Caliel if PlantStruxure PES and Foxboro Evo will be merged. The answer at this point was they will remain separate with the possibility of sharing technology to strengthen each where appropriate. The logic is Foxboro Evo serves large complex process industries, and PlantStruxure PES satisfies hybrid requirements.
Thoughts & Observations
Clemens Blum and Mike Caliel have a great deal of work ahead of them. The integration of Invensys with Schneider Electric is just getting underway. I believe that, based on the short time that I have known them, Blum and Caliel are up-front, logical thinkers, and the odds of success are in their favor.
I asked about personnel cuts, and the answer was at this time they are focused on opportunities and both companies view this combination is a “growth deal.” Hopefully, with an improving economy and little organizational overlap, the combined organization will remain stable.
Video by Schneider Electric on the Acquisition of Invensys
- Schneider Electric Executive Interview
- Schneider Electric closing in on Invensys purchase – Benefits and Challenges
- Schneider Electric Targets Process Control
- Foxboro Evo System Features Multiprocessor Controller
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