The Biggest Company You Never Knew Speaks Out

December 5, 2000
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LAS VEGAS, NV - After dropping one coin after another into those hungry slot machines, the words of New York Yankee Hall of Fame pitcher Whitey Ford started to ring very true: “They always told me that money talks, but the only thing it ever said to me was ‘Goodbye.’”

Money isn’t saying goodbye, however, to the host company of Invensys Conference 2000, held here recently at the Venetian Hotel. Invensys plc, headquartered in London, England, and now in the process of getting listed on the New York Stock Exchange, wants to get the word out that it is a power in controls and automation.

Jim Mueller, chief operating officer of the company, kicked off the conference with an overview of the firm. Although not a household name, Invensys is a large company. Created in February 1999 by the merger of Siebe and BTR, its current value is over $10 billion, with an operating profit of $1.6 billion. It has four divisions: Control Systems, Power Systems, Software Systems, and Automation Systems.

Of the company’s markets, Mueller said, “There isn’t one that dominates.” It has 8% of its business in hvacr and 8% in appliances. Other sectors include information technology, utilities and power, and several others.

A key force in automation and controls, he stated, is that new intelligent software networks are spurring major productivity im-provements. The boom in e-commerce and e-business is driving growth in networks and software.

Long-term industry growth in automation and controls is projected to be 5%-plus, said Mueller.

In a panel discussion, Mueller was joined by the four divisional chief executives: Rod Powell of Control Systems, Tom Gutierrez of Power Systems, Bruce Henderson of Software Systems, and Richard Armbrust of Auto-mation Systems.

Asked if the push for networked homes will come from homeowners, utilities, or other sources, Powell said, “All of the above.” It could come from homebuilders, appliance makers, Best Buy/Circuit City, or Sears, for example.

Mueller noted that the bulk of the restructuring is complete. The firm’s competitive differentiation is that a division can offer the capabilities of other divisions to provide added benefit to the customer that they may not be able to get elsewhere.



ENERGY is A DRIVER

“Energy deregulation has been a big driver for our business,” said Powell. The company has metering systems and data centers to measure the amount of energy used. Gutierrez noted, “Power demand is far outstripping the infrastructure.”

Henderson stated that the company is building a full e-enterprise suite to offer customers.

Regarding building management, Powell said that the building environment is extremely important. “People want more control in their offices and at home. We’re going to focus on that.”

In the keynote address, Allen Yurko, ceo of the corporation, said that sales are up 18%, with research and development a little over 4% of sales. Listing the top companies in the automation and controls market, Yurko pointed out that Invensys is now No. 4. The top three are Siemens, Emerson, and ABB, so Invensys is among the very biggest names.

Markets are changing fast, he said. Some are maturing while others are exploding. “New products, which two years ago were only 20% of sales, are now 40% of sales.”

In a breakout session, Dane Ehrich, vice president of technology, Meter Systems, talked about networked energy meters, a new technology in energy metering.

Ehrich noted that deregulation is creating different needs and opening different opportunities. The new meter provides ultrasonic gas flow measurement with no moving parts. The unit “also opens applications for combustion control,” said Ehrich.

The built-in electronics enable networks of connected meters that use low-power RF or power line carrier. Users can network more than just meters, including climate controls, appliance controls, and building automation systems.



CHANGES

After the conference, a couple of significant changes occurred at the company. Rick Armbrust, divisional ceo of Automation Systems, has left to become president and ceo of Engage, a company with which Invensys shares an energy-focused joint venture.

Also, according to the Reuters news service, the corporation reportedly is spinning off its Power Systems Division for approximately $5.7 billion.

Sidebar 1: Invensys and Sun Microsystems Announce New Collaboration

LAS VEGAS, NV - Invensys Control Systems, a division of Invensys plc, Richmond, VA, announced that it will collaborate with Sun Microsystems, Palo Alto, CA, to develop and market “smart home” infrastructure that is expected to accelerate the delivery of services for wired appliances, the company says.

Sun’s residential gateway technology, Java Embedded Server™ (JES) 2.0, will be incorporated into Invensys’ home gateway devices.

“This strategic partnership is a significant step forward toward realizing the connected home vision,” said Rod Powell, ceo of the division. “In collaboration with Sun, we can expand the capabilities of our residential gateway and network systems products to bring the full benefit of the connected home to the consumer.”

Connecting with service providers across an open communications platform is what experts consider to be the catalyst needed for the smart home market to reach its full potential. A forecast from Parks Associates says that there will be 25 million networked devices in U.S. households by the end of 2005, creating a market worth $5 billion.



Sidebar 2: Strategic Alliance Formed By Invensys and Williams

LAS VEGAS, NV - Invensys plc announced a strategic alliance with Williams, Tulsa, OK, to develop integrated energy management and communications solutions for customers in residential, commercial, and industrial markets. The announcement was made at Invensys Conference 2000, held here recently.

Creating communications networks and energy management systems for schools, colleges/universities, health care facilities, and commercial buildings will be an initial focus of the alliance. The companies have also agreed to pursue other initiatives.

The agreement will combine Williams’ expertise in energy transportation, power marketing, and trading as well as broadband communications and enterprise network integration together with Invensys’ core capabilities. These include facilities automation, optimization, monitoring, and control; power distribution and energy management in homes and buildings; and other applications.

The two companies also announced that they would team to provide communications and energy services to Minority Serving Institutions (MSIs) affiliated with the Executive Leadership Foundation’s Technology Transfer Project.

Through the foundation, the Executive Leadership Council (ELC), a professional network and forum for African-American business leaders, formed the Technology Transfer Project (TTP) to provide historically black colleges and universities with access to the latest technological advances for use in the teaching and learning process.



Sidebar 3: Addressing All Control Points

LAS VEGAS, NV - The Internet is going to be a part of everyone’s daily life, stated Rod Powell, ceo of Invensys Control Systems, division of Invensys plc. Because of that, he said, “Our goal is to make all control points web-addressable.”

Powell added that the division “currently monitors more than 3,500 buildings worldwide over the Internet.”

The Building Systems operation, he said, is moving away from supplying components to providing complete systems. The Climate Controls unit will retain its product brands such as Robertshaw.

“No brands are weak and won’t be faded out,” he emphasized.

The company makes some controls for fuel cells and may get into that more.

The division will have e-commerce across the board. Powell noted that Fasco is most advanced as far as orders go.

“It’s a general trend that people want more control over their environment,” he stated. This requires 24/7 remote access with networked systems and web-enabled service. The service channel, remarked Powell, could be the early driver to get networked home applications going.

Publication date: 12/11/2000

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