Page 2: Read the press releases announcing these deals >>

By Jesse Berst

 

GigaOm analyst Katie Fehrenbacher comments on the latest illustrations of a long-standing trend -- members of the Big Four industrials (ABB, Alstom, GE, and Siemens) eagerly searching for smaller suppliers to snap up.

 

Siemens just snapped up RuggedCom, a maker of hardened routers for substations. And just in time. Ontario-based RuggedCom was squarely in the sights of networking giant Cisco, which has just expanded its own line of competing routers. The Siemens deal gives it the muscle to compete.

 

As for ABB, it grabbed Tennessee-based Thomas & Betts, a maker of old-school low voltage gear. The deal gives it access to U.S. customers who may be interested in ABB's much broader line.

 

One trend Katie doesn't note may be of interest to smaller suppliers – the balance of power may be shifting. Last year, the Bigs were still in bargain-hunting mode. Based on the valuations offered for these two deals, we may be transitioning to a strategic phase, where they may overpay a bit to grab technology they need to complete their product line, to get access to customers they can't reach on their own, or to block a competitor.

 

Meanwhile, long-time industry analyst and researcher Chuck Newton has weighed in with his take. He tells me he is concerned about the Siemens/RuggedCom hookup. "The acquisition was made by Siemens' Industrial unit, not the Energy unit," he explains. "Unless Siemens Energy can share in the future direction of this young, dynamic company, it could lose its focus. And it could lose its current commanding share of the substation business to the likes of Cisco and other direct competitors such as GarrettCom."

 

As for ABB, Chuck has a number of thoughts, which I will let you read on the Newton-Evans web site. He notes, for instance, that ABB is now in greater competition with Schneider. Schneider, long the global king in low-voltage equipment, recently moved into ABB's space with the acquisition of Telvent. Now ABB is firing back with its purchase of Thomas & Betts.

 

You may also want to read...

Self-healing smart grids: Siemens and RuggedCom team up in Virginia

ABB continues smart grid acquisition spree

 

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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