Repositioning a Giant: Schneider Turns its Focus to the Smart Grid

Our sister site, Smart Grid Central, just posted a profile of Schneider Electric (see link below). I’ve spent some time with the company’s management, and I wanted to add a few comments to explain why you need to pay attention to this French-based global giant.  In a nutshell, Schneider wants to broker the relationship between utilities and large customers.

Historically, Schneider has focused on the customer side of the meter.  It is a world leader in areas such as industrial automation, building automation, backup power, and circuit breakers.  After a four-year acquisition binge that caused it to double in size between 2004 and 2008, it is now repositioning itself.  Part of the motivation comes from the global financial crisis, but many of the company’s changes are driven by the desire to play a role in the Smart Grid revolution.

The first part of the transformation is a shift in focus from products to solutions.  Schneider will package products into logical bundles and add consulting and other services. The second part of the change is to become the global leader in energy management.  Schneider wants to provide the central management function that ties together industrial automation, building automation, backup power, sub metering, and all the other energy aspects of a large commercial or industrial customer.  It wants to automate and centralize all these functions and then become the bridge between the customer and the utilities that provide the power.

In practical terms, this is likely to mean that Schneider will take on the following:

• Add more consulting services
• Integrate and centralize many of its scattered offerings
• Add automation and artificial intelligence
• Add interfaces to utility programs for load curtailment, energy efficiency, demand response, and bill presentment
• Create a rules-based “dashboard” customers can use for most or all of their energy management

You’ll also see the Schneider brand become much more prominent.  Until now, it has been content to buy smaller companies and sell their products under their existing brand names.  As a result, it currently has more than 150 brands worldwide and very little mind share.  For instance, you probably know of brands such as Square D (circuit breakers) and Xantrex (inverters), but you may not realize they’re both owned by Schneider.  Within the next decade, the company plans to reduce its brand names to less than 10. 

When I asked which trends they think are most important, they answered (1) embedded intelligence and (2) microgrids. I certainly agree that both trends are growing in importance worldwide, especially in the developing world, where Schneider intends to focus its expansion efforts over the next few years. Taken to extremes, this vision conjures up a “walled garden” feeling. C&I customers might use Schneider generators, devices and energy management software behind the meter, and then use Schneider software to talk to the utility. Although it is unlikely to get that extreme in the developed world, self-sufficient microgrids may become quite common in parts of India and China where the grid is so unreliable it forces C&I users to find home-grown solutions.

In all parts of the world, I predict that Schneider will use its size, resources, and strong customer relationships to become an important part of the Smart Grid ecosystem.

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