With Invensys Acquisition, Energy Meets Automation

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When most people think of “the future” they invariably gravitate toward consumer devices: Google Glass, privatized space travel and wristwatches with voice and video. The future once promised on Saturday morning cartoons is rapidly becoming a reality.

Of course, that’s mostly the sexy consumer stuff that we all like to talk about. But the 21st Century is manifesting itself in commerce and industry at the same, if not a faster, pace. In fact, the automation of business processes is an exciting new area for our company and signals where we are headed in the future. We are pushing further into the automation market through our $5.2 billion acquisition of Invensys PLC, which closed earlier this year.

This deal greatly enhances our position as a provider of innovative, advanced solutions that integrate our core competencies in power management with enticing efficiencies produced through automation technology. The Invensys unit covers three main business segments: software, industrial automation and energy controls. The company has long been a leading provider for control and safety systems to oil platforms, nuclear power plants and other facilities where security and uptime are paramount concerns. Invensys has served as a partner with Microsoft on cloud-based solutions for manufacturing workflow and process management.

Chris Hummel_Invensys post_Industrial Automation

While it’s early, we are already pleased with what we are seeing. Invensys racked up strong order growth in our 2013-14 fiscal year ended March 31, up 9% at constant exchange rate. That performance was driven by double-digit growth in software orders and high single-digit growth in industrial automation. On top of that, the growth was experienced across all geographic regions, especially in Asia-Pacific and North America. Better yet, the revenue growth was complimented by higher profitability. Our Chairman and Chief Executive Jean-Pascal Tricoire said it best: “We are pleased with the solid performance of Invensys. Integration is well on track and teams are aligned to execute on synergies.”

So what’s the upshot? Schneider has historically been a leader in efficiency and energy management. We owe a good portion of our worldwide reputation to creating systems that let businesses and consumers garner the greatest amount of output from the least amount of input. With Invensys, we are now able to provide a broader spectrum of automated solutions for our customers’ core processes and operations to fit multiple market segments and scale requirements

Thus, as wearable devices and driverless cars grab the headlines, keep in mind that the big story will be about how the enterprise systems on the back-end are making them possible. Driverless cars won’t function unless they are linked to extensive networks of intelligent streetlights or analytics that can differentiate between an approaching car and an approaching person. In the workplace, expect to see systems that will help people make informed decisions about critical developments—shipping schedule changes, process work-arounds—in real-time. Training will be vastly improved too because data can be harnessed to develop realistic, real-world scenarios.

It won’t be easy. The industry, and Schneider, will have to prove that the highest standards of security and reliability can be maintained. We will also have to work on things like user interfaces—we’re moving into an era where people will control giant manufacturing facilities with a phone— heat dissipation, power consumption and more intelligent embedded systems. It will require engineering advances along with insights into industrial psychology.

It may not be the stuff of Saturday morning cartoons, but it will have a monumental impact on the future.

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