Schneider Electric accelerates its transformation

Oil and gas, data center markets are core growth areas, says new North American CEO Laurent Vernerey

By Bob Vavra, Content Manager, CFE Media May 9, 2014

As growth in key segments of its U.S. customer base expands, Schneider Electric sees itself as growing and changing after the acquisition of Invensys in 2013.

“We have to accelerate our transformation from an industrial company to a technology company,” said Laurent Vernerey, the new president and CEO of Schneider Electric’s North American operations, in an exclusive interview with CFE Media. “We have to embrace software and services. We also believe we need to have strong alliances in the industry to bring answers to the technology challenges our customers are facing.”

Vernerey said the emphasis on managing big data has led to the rapid growth of data centers, and the U.S. oil and gas industry continues to expand rapidly. “We have a bullish view of the U.S. market because of the issues of the aging system infrastructures and the data revolution,” he said. 

Schneider Electric has expanded its existing services business to a stand-alone division, Schneider Electric Global Services. “We see a significant trend in managed services, and information services. This is not an episode. It’s something we do. It has to be part of our DNA.”

The acquisition of Invensys gave Schneider Electric a strong and complementary portfolio of products in the oil and gas sector. What was less discussed at the time, but an area Vernerey thinks is just as crucial, is a competency in cybersecurity management.

“Compliance is a key question,” he said “We’re seeing a lot more questions about cybersecurity. That picture has changed significantly. (Invensys) had assembled a team of cybersecurity experts, and they bring a legacy of what’s happening at the compliance level.

“But we don’t believe we should be doing this on our own,” he added. “We’re working with outside companies such as IBM and Cisco. This topic is too large for just one company to focus on it.”

While the U.S. market has generally been strengthening over the past four years, Vernerey sees some challenges on the near-term horizon. He noted the changes in government spending and a continuing issue of how to use technology to fill some of the Skills Gap as barriers to growth. Still, the economic slowdown in the first quarter of 2014 was largely attributed to a brutal winter in much of the U.S. as opposed to some underlying economic weakness. “The first quarter was impacted by the weather,” Vernerey said, “and the early days of the second quarter have shown people ready to take investment forward. There’s been a big move in data centers. We have seen some resurgence.”

When it comes to acquisitions, Schneider Electric has been among the more aggressive companies in the past decade. The Invensys acquisition is the last in that trend for a while, Vernerey said. “We’ve been very clear. We’ve arrived at a time in our history where we’ve put together a strategic portfolio that we believe now is quite complete. Now we are going to begin to leverage the Schneider Electric portfolio.

“Right now, our number-one focus is on organic growth,” Vernerey added. “We are seeing some consolidating in our industry, and we still believe our industry going to consolidate. We are going to stay very focused on our strategy.”

– Bob Vavra, content manager, Plant Engineering. bvavra@cfemedia.com