On March 1 2018, UK-based listed industrial design and management software leader AVEVA Group announced the completion of its merger with the industrial software business of Schneider Electric which was announced in 2017 after two previous attempts had failed.
AVEVA serves customers from highly capital-intensive industries going through profound digital transformation, ranging from power and utilities, the chemical industry, food and beverage, shipbuilding, infrastructure and smart cities to life sciences, the mining, minerals and metals industry, oil and gas (upstream, mid-stream and downstream) and, last but not least water and wastewater.
All the top energy companies across the globe use AVEVA software, as do 9 of the top 10 global shipyards. In the capital-intensive industries it’s active in AVEVA provides software to transform the schedule, cost efficiency, quality, safety and compliance of their asset delivery processes, from complete contract control to asset life cycle information management, assembly planning and far beyond.
Accelerating how capital-intensive industries achieve end-to-end digital transformation
By merging its business and the industrial software business of Schneider Electric, AVEVA states it wants to combine the power of two leading software companies to accelerate how capital-intensive industries achieve digital transformation across the entire value chain in an end-to-end way.
The combined, enlarged business will employ over 4,400 people in more than 80 locations in 40+ countries across the mentioned industries which are going through profound changes in the age of Industrial IoT, the transformation towards smart industry or Industry 4.0 as industrial transformation is callled and the integration of IT, OT and ET.
Schneider Electric, leader in the digital transformation of Energy Management and Automation, states that the combination, which creates a global leader in engineering and industrial software, will enhance the value proposition of its Industrial IoT platform (EcoStruxure, the center of its IoT-enabled applications with various levels/layers from connected products and edge control to applications, analytics and services, built upon cloud technology with Microsoft’s Azure IoT) for industrial & infrastructure customers.
The industrial software business of Schneider Electric ranges from simulation through to asset performance and real-time manufacturing operations management as AVEVA puts it on the overview page of the merger, when stating that the combination of this software business with its own design, engineering and construction capabilities for capital assets unlocks the power of two successful portfolios, delivering improved profitability and operational excellence across capital-intensive industries.
Powering digitalization in capital-intensive industries say that digitalization
The Schneider Electric industrial software offering to a large degree overlaps with that of AVEVA from a served industry perspective, making the merger all the more powerful.
The industrial software business of Schneider Electric includes:
- Wonderware (SCADA HMI software, manufacturing executing systems or manufacturing operating management: industrial information management and real-time production management with its System Platform 2017 being leveraged by the IIoT-enabled, open and interoperable system architecture for plants and machines, EcoStruxure for Industry, which was presented at the occasion of the edition 2017 of Hannover Messe),
- Avantis (asset management software for the operation of production plants and processes with on top of its Enterprise Asset Management software, PRiSM Predictive Asset Analytics and Avantis’ Condition Based Maintenance and Monitoring solutions, to name a few),
- StruxureWare Supply Chain Operation software suite of APS or advanced planning and scheduling software solutions,
- ClearSCADA software for telemetry and remote SCADA applications, enabling the centralization and optimization of operations and overall management of geographically dispersed infrastructure,
- Ampla operations management software to enhance production process performance and energy usages in the metals, mining and minerals industry (Ampla Mining Operations Management,…),
- SimSci: process simulation models, process plant lifecycle optimization and process design tools,
- Spiral: integrated feedstock data management, planning, scheduling and envelope optimization solution designed to support supply chain work processes,
- Enterprise Pipeline Management Solutions (ePLMS) to manage day-to-day activities of crude, refined products, gas and petrochemical pipelines,
- InStep: real-time performance management and predictive asset analytics software and solutions for the power and energy market (after the 2014 acquisition of InStep Software),
- Termis District Energy Optimization Software: operational software for the real-time planning and optimization of district energy networks,
- Aquis Water Management Software: operation system expanding water distribution network SCADA capabilities, forecasting behavior of the distribution network and anticipating impact of planned and unplanned events – for water SCADA operators to optimize their distribution networks in real time,
- Citect SCADA – flexible and high performance Supervisory Control and Data Acquisition software solution for industrial process customers.
A look at the subsites of the various industrial software solutions of Schneider Electric mentions the merger and in some cases AVEVA Group Plc. at the bottom of their pages where we also read that the Schneider Electric and Life Is On trademarks of course remain owned by Schneider Electric but are being licensed to AVEVA by Schneider Electric.
Craig Hayman, who as expected was appointed as new Chief Executive Officer in February 2018 at AVEVA (he previously worked at PTC) in the press release: “88% of leaders in capital-intensive industries say that digitalization would increase their revenue. Yet less than half of these companies are actually in the process of adopting a digital strategy. This represents an incredible opportunity for AVEVA to be our customer’s digital transformation partner.”
Two stronger players in a large number of areas of ongoing convergence and transformation
Analyst Craig Resnick of ARC Advisory Group comments: “New technologies are accelerating the merging of the virtual design and physical equipment worlds, requiring the creation of new business models that must support the convergence IT, OT and ET to enable digital services”.
With the merger of its industrial software business and AVEVA, Schneider Electric has a 60 percent stake in the combined global leader in engineering and industrial software and at the same time can continue and accelerate its highly transformational path around the EcoStruxure offering and IIoT platform as well as its innovation roadmap, which covers several connected levels where traditional silos are falling, leading to unprecedented opportunities. Schneider Electric was recently named a leader in one of its core strengths, facility optimization and the market of facility optimization software by leading research firm Verdantix.
The enlarged industrial software business as said will also enhance the value proposition of EcoStruxure for industrial & infrastructure customers.
Schneider Electric is leading the way in the ongoing integration of the various levels in its roadmap which are driven by evolutions on several fronts at the same time: IoT, convergence, advanced data analytics with artificial intelligence, changing customer demands and global challenges in the scope of, among others, ecology, sustainability and smarter ways to turn the insights of ubiquitous data from ever more sources through ever more connectivity solutions and connected ‘things’ into benefits in areas such as energy, power, building management, grid and so forth.
More information about the merger of AVEVA and the industrial software business of Schneider Electric in the press release and on the dedicated merger update page on AVEVA’s website. Existing customers of Schneider Electric’s industrial automation solutions can request more information via this link.
The planned tie-up between AVEVA and Schneider Electric was officially announced in September 2017 after previous attempts had failed (CEO Richard Longdon, who was active at AVEVA for over 3 decades, stepped back in the Summer of 2016 after a second failed merger attempt).
Now both companies struck an agreement in the form of a reverse takeover whereby Schneider Electric takes a 60 percent stake in the merged, enlarged group consisting of AVEVA and the industrial software business of Schneider Electric.
Schneider Electric on the completion of the combination between Schneider Electric industrial software business and AVEVA financial aspect (PDF): “Following the closing of this transaction as per the terms set in the AVEVA prospectus, Schneider Electric owns 60 percent of AVEVA Group on a fully diluted basis. Emmanuel Babeau (Deputy Chief Executive Officer and Chief Financial Officer) and Peter Herweck (Executive Vice President – Industrial Automation) of Schneider Electric have been appointed as Non-Executive directors of AVEVA Group, with Emmanuel Babeau additionally assuming the role of Vice Chairman.
AVEVA will be fully consolidated in Schneider Electric accounts within the Industrial Automation division, with a full-year operational margin accretive to the Group, Schneider Electric says.
According to a blog post by Monica Schnitger, CEO Craig Hayman, said to investors that “This combination represents a transformational opportunity for AVEVA to drive growth and advance the digitalization of the industrial world”.
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