News of the week: Siemens acquires venture capital-funded eMeter. What does this mean for both companies? More than the immediate sum of the two, according to both. With 17 mutual customers in three different countries already to their combined credit, the four-year partnership will ramp up further in 2012.
Without doubt, the big news of the week was Siemens Industry, Inc.'s announcement that an agreement had been signed to acquire eMeter Corporation this month.
We spoke both to Siemens and to eMeter about the agreement, and its ramifications for 2012.
Siemens is looking strategically at its smart grid play, and venture capital-funded startup eMeter (with whom it has had a working partnership agreement for the past three-plus years) was a logical acquisition, and a signficant footprint in meter data management.
The logical first question I asked Kevin O'Hara, vice president and general manager of Siemens Smart Grid Services for the U.S. and Canada, and Craig Cavanaugh, Siemens' director of metering services, was: "What's next in terms of Siemens' acquisitions? Will there be a meter company acquisition in the mix?"
"Stragically, at the moment, we don't have any plans to be a meter provider. We work with meter vendors and meter providers," O'Hara said.
But as far as other companies in the market are concerned? "Across our portfolio, all are fair game. We are strategically looking for companies that fit our focus," Cavanaugh said.
For eMeter, the acquisition by Siemens just plain made good sense. "We're very excited," said Kyle Artega, eMeter's global head of corporate communications and a spokesman for the company. "What makes the merger more natural is that we know each other really well. We have 17 mutual customers in three countries: Germany, Austria and the United States."
Cavanaugh concurs: "We entered 2011 as a partner with eMeter of six customers. We are exiting 2011 with seven to eight new (mutual) customers."
Siemens and eMeter have been working together since 2007, so when eMeter began looking at new funding to step up its efforts, and announced its intent, it received two unsolicited offerings, as well as new venture capital (VC) offerings. Compared against its VC offers, Artega said, "Siemens came through. We have received a level of attention from Siemens that we haven't seen before (in others), and a vision we haven't seen before. We really think (Siemens) can significantly accelerate our business."
eMeter's entire 175-person staff will be joining Siemens, but for eMeter CEO Gary Bloom, who is leaving the company, according to a report by online Xconomy.com. Bloom, who joined eMeter 20 months ago, revealed in a Q&A with Xconomy correspondent Wade Roush that, coming from a background as a software CEO, adapting to doing business with the utility industry has been what he termed "a fun challenge."
It's a sure bet we'll see Bloom heading up another fast-moving industry start-up in 2012. I met with him at DistribuTECH earlier this year, to talk about eMeter's move into the cloud, and he was logical and straight-to-the-point in a way that some others were not. "I see it as business management," he said. "They (utilities) see is as: is IT really my business? Why not hand off IT to everyone in the cloud?" At the time, eMeter had taken the step others had not yet tread: the company bore the banner of being the first energy service in the cloud. Bloom called it "the birth of the energy cloud."
"For us, this is an additional reach into the marketplace," he told me. "Architecturally, this product is ideally designed."
On the Siemens-eMeter front, expect great things in 2012. Artega, who reports that eMeter, which has a number of partners, such as SAP and IBM, says that, "In general, our customers have been excited, for the most part, and so have our partners."
And then there's that industry triple play: analytics.
"Siemens also buys into our vision regarding analytics," Artega told me. "Our analytics play could exceed our MDM play."
Siemens' Cavanaugh agrees. He says there are two pieces of the portfolio, and one of them is MDM as a conduit of customer data back into the enterprise (utility). "We clearly see it as a critical cornerstone platform into the processes we are developing," he said.
And the meter data management platform sits, in a most visual way, as the octupus head of a multi-armed opportunity within the electric utility industry. "Your octopus analogy is very apt," Cavanaugh said, "because of where the application sits within utilities and the data landscape." MDM intercepts a lot of data, and the granularity a utility is able to get from that data is extremely useful in terms of new offerings, better planning, and even, perhaps, generation procurement in the future.
Siemens will be announcing, within the next few months, a number of new utility deployments. Will they also be announcing new acquisitions? Stay tuned here for the answers.
editor-in-chief, Intelligent Utility magazine