Photo by Schneider Electric
Laurent Vernerey, Schneider’s president and CEO, North American Operations

Schneider Electric’s Take on the Internet of Things

Oct. 10, 2014
The company has been spending billions on software that collects and analyzes information from electrical products for building owners and energy managers.

Schneider Electric executives used their Influencer Summit 2014 event on Sept. 11 to showcase their new North American headquarters in Andover, Mass. and to give about 80 analysts and editors insight into how they are positioning the company for growth with a blend of facility, industrial and utility software and brands such as Square D, Modicon and APC.

The event’s presentations all touched on a central theme — what Schneider Electric sees as a massive global business opportunity to modernize, retrofit and where necessary interconnect the existing buildings in virtually all market segments, as well as the greenfield opportunities to install the latest in interconnected energy-efficient electrical systems in new buildings. Schneider plans to link these devices with its stable of industrial, facility management and utility system software such as Wonderware, StruxureWare, other applications offered by Invensys, its recent $5.6 billion acquisition, and software for the utility market developed by Telvent, a provider of IT software and solutions for the utility, oil & gas, water and transportation markets.

The move of the company’s North American headquarters from Palatine, Ill., to a LEED-certified facility in the Boston suburbs, brought the company closer to several of its research labs in the Boston metro, the region’s tech hub, and to the many engineering graduates from top-tier engineering schools like MIT and Harvard, said Laurent Vernerey, Schneider’s  president and CEO, North American Operations. He is a 28-year company veteran who recently took over Schneider’s top executive post in North America from Chris Curtis in Oct. 2013.

The move comes at a time that in many ways symbolized Schneider’s evolution, too. Vernerey said Schneider is proud of its legacy products. “We are known by our brands,” he said. “We want them to know the Schneider brand, too.” It will be interesting to see how he, Chris Hummel, the company’s new chief marketing officer, and the rest of the executive team position the Schneider brand with respect to the legacy brands and their desire to build up the Schneider Electric corporate brand.

Vernerey said the company’s future depends on its ability to serve the growing need for real-time information on virtually any electrical system imaginable in regards to power usage, potential energy savings, maintenance issues, and, increasingly, potential digital security concerns. The company wants to give virtually any current-carrying electrical device an IP (Internet Protocol) address and pull all of the power-related information from that device into software that generates customized dashboards for building managers, contractors or a company executive so they can monitor their electrical systems remotely and in real-time. He said that while Schneider Electric sees an electrical world where all devices are connected, the “real game” is, “What do you do with all of that information?”

Schneider’s major areas of emphasis going forward will be: water and waste water; utility; healthcare; oil and gas; food and beverage; data centers; mining, minerals and metals; and OEMs.  Some of the opportunities for energy savings and sales in each of these markets are striking. For instance, in data centers, electricity can be 20% percent of operating costs, said  Schneider’s John Hoekstra, director of energy and sustainability services.

The company also sees huge growth in the utility market, in part because of the growth of the smart grid. One Schneider Electric said an estimated 30% of utilities are now running some sort of smart grid.

At over $30 billion in annual sales and $6 billion in U.S. sales, Schneider is not a small player in the energy market. But as it positions itself to compete not only in the distribution and control markets, where distributors have known brands like Square D, Modicon, and Telemecanique for decades, but in the utility market and in industrial and facility software, where  it now takes on new types of competitors, such as software vendors. Vernerey said Schneider now has the overall critical mass it needs and doesn’t anticipate making any real big acquisitions in the immediate future.


Photo courtesy of Schneider Electric
Before launching its new QuoteFAST software early next year, Schneider Electric asked its customers and distributors to test drive the program.