In late September, Schneider Electric, the big power and automation concern, held a customer conference in Orlando that drew approximately 1,500 people, including about 50 journalists. Called Initiative 2006, the event's purpose was to showcase Schneider's capabilities in electric power management and automation and control across such well-known brands as Square D, Telemecanique, and Merlin Gerin.
The message, not unlike that promoted by other large automation companies, was that Schneider is a global player possessed of the track record, financial wherewithal, scope of products, and customer-focused culture to do just about everything a manufacturer needs in power management and automation. And it's not just circuit breakers, relays, PLCs, and assorted other devices. Yes, you've heard it before: It's a pitch about being a solution provider.
Sales pitches are as sales pitches go, but the backdrop of Schneider's message is a serious attempt to position the company to play a much deeper role in its customers' businesses, partly by wrapping its products with value-added services.
Such a change is not a simple or easy task for what has been an industrial products company whose wares have been largely sold through third parties such as distributors, but Schneider has been working at it for some time. The Initiative event concept first rolled out in Europe in 2003 and was exported to more than half a dozen countries, including Mexico, Australia, China, and others before it arrived in Orlando. Schneider officials say they have been pleased with the events and intend to do more.
In an interview during the conference, Andy Gravitt, senior vice president of automation and control for the North American Operating Division, said that Schneider's services strategy has three parts: repair and exchange, upgrades, and implementation and integration. Without providing exact financial figures, he said Schneider has grown its services business by more than 15% in the past year and hopes to double it in the next two to three years.
But how far into services will Schneider venture? Will it seek to actually do what systems integration partners, for example, now provide to end-user customers? North American unit CEO Dave Petratis says that in critical power, he can see Schneider someday actually running the systems. But what about the risk of channel conflict?
Chris Curtis, the president of Schneider Electric USA, says there's a middle ground. "The question isn't whether it's turnkey or not," he says. "We have to coalesce our partners. We don't intend to do everything, but we do intend to take more responsibility."
Meanwhile, Schneider devoted much space at the conference's exhibition area to its many products. In fact, it quietly displayed a new mid-range PLC it is designating the M340. Due to be formally announced toward the end of the year, the M340 will replace the company's Concept product, according to Gravitt, and will be "aggressively priced."
This article originally appeared in the November 2006 issue of Managing Automation.