AVEVA completes merger with industrial software business of Schneider Electric

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.

The combination of AVEVA and Schneider Electric’s industrial software business brings together CAPEX and OPEX, creating a path to digitalization from conceptual design to commissioning, and from operations back to revamps (Monica Schnitger, Schnitger Corporation)

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.

AVEVA Schneider Electric industrial software merger completion

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.

The convergence of solutions from both AVEVA and Schneider Electric’s industrial software business enables its customers to take full advantage of the complete spectrum of technologies and solutions needed to increase both their top and bottom lines to better thrive in an ultra-competitive global economy (Craig Resnick, ARC Advisory Group)

As the name already indicates, the industrial software business of Schneider Electric is not related with the company’s activities as a leader in, among others, building management, power and energy management, data centers, green buildings and so forth with its EcoStruxure platform and the IoT taking center stage.

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.

Digitalization demands a fundamental rethink of the way organizations operate. They need to be confident that their technology investment will deliver a high return on capital and can lower the total cost of asset ownership. AVEVA’s combination of proven solutions, industry-specific knowledge and a global partner ecosystem will drive innovation across capital-intensive industries, as companies plan their digital transformation journey (Craig Hayman, Chief Executive Officer at AVEVA)

While the precise solutions aren’t mentioned in the press release, they will become clear soon. However, the merger certainly among others include the portfolio of Wonderware (SCADA HMI software, manufacturing executing systems or manufacturing operating management and industrial information management), Schneider Electric’s Avantis portfolio (Enterprise Asset Management software, PRiSM Predictive Asset Analytics and Avantis’ Condition Based Maintenance and Monitoring solutions, to name a few), Schneider Electric’s Pulp and Paper Industry solutions (kraft pulping, mechanical pulping and paper making), the Enterprise supply chain management software and the waste and wastewater applications of Schneider Electric. Also at least part of Schneider Electric’s smart city applications such as its transportation solutions are part of the merger, as are its solutions for upstream, midstream and downstream operations in oil and gas and the Ampla Mining Operations Management.

Expect more details to be announced but 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 new enlarged business and at the same time can continue and probably even accelerate its highly transformational path around the EcoStruxure offering and its innovation roadmap which covers several connected levels where traditional silos are falling and leading to unprecedented opportunities. Schneider Electric was recently named a leader in one of its core strengths, facility optimization and the market of facility management software by leading research firm Verdantix as you can read here.

The convergence of solutions from both AVEVA and Schneider Electric’s industrial software business enables its customers to take full advantage of the complete spectrum of technologies and solutions needed to increase both their top and bottom lines to better thrive in an ultra-competitive global economy (Craig Resnick, ARC Advisory Group)

On top of now being part of a leading engineering and industrial software company, 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, 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.

New AVIVA CEO Craig Hayman on TwitterNew AVIVA CEO Craig Hayman on Twitter

The planned tie-up between AVEVA and Schneider Electric was announced in September 2017. After previous attempts 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.

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”. Emphasizing that AVEVA now more than doubled in size she also shows the difference between an ‘About AVEVE’ footer from before and after the finalization of the merger which indeed is…telling.

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