COMPUTER BUSINESS REVIEW

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Issue Date: June 2007

Powering change

June 2007
Darren Smith, editorial director, Technews

Barcelona is a city of constant renewal, of dynamic change, and infused with creative and artistic spirit. So it was appropriate that it hosted APC’s recent Annual Partner event, particularly in light of the changes that APC itself was embracing.

It was, to all intents and purposes, the point at which the new APC-MGE era began (certainly for its EMEA partners and customers) and it was here that the APC-MGE executive team announced itself ready, willing, and able to take its partners, and its clients through a period of unprecedented change in power and cooling design. Technews reports.
For those readers not up to speed on the story, it may be appropriate to take a step back and revisit events of recent months.
On 14 February, 2007, Schneider Electric (a French manufacturer of equipment for electrical distribution, and industrial control and automation) announced the completion of its acquisition of American Power Conversion Corporation (the world's number one manufacturer of uninterruptible power supplies (UPS) among other power protection equipment).
The combination of APC and MGE UPS Systems created a worldwide leader in the critical power and cooling services market, the combined operations having well balanced geographical positions, strong innovation capabilities and unparalleled access to market channels.
Valued at $6,1 billion, this huge acquisition combines the strengths of one of Europe's leading UPS manufacturers (MGE) and the world's number one (APC), creating the largest UPS business in the world with an enviable product and solution portfolio globally.
Upon announcing the close of the transaction in February, Jean-Pascal Tricoire, president and CEO of Schneider Electric said: "The combination of APC and MGE will generate value for our customers through a large choice of tailored solutions, a global services network and a large technical expertise. It will also enhance value creation for our shareholders by leveraging the complementary characteristics of both companies and extracting synergies."
"We are now ready to greatly strengthen Schneider Electric in the fast growing segment of critical power and cooling and we are extremely confident in the combined talents of the APC and MGE people to achieve this."
Added Rob Johnson, former president and chief executive officer of APC: "The APC team is excited to join with Schneider Electric and MGE UPS Systems. Together, our focus on the customer and on innovation will be stronger than ever as we partner with our worldwide customers to help them solve unprecedented powering and cooling challenges."
Claude Graff, president of MGE UPS Systems noted that: "APC and MGE within Schneider Electric is a powerful combination, offering our customers the largest choice of solutions and services, bringing together the broadest service organisation, the industry's best known brands and the strongest technologies."
Positive synergies
Some of the positive synergies that can be taken out of this merger include:
1. It combines APC, a traditional leader in small and medium sized UPS systems, with MGE UPS, a leader in large UPS systems in the European market.
2. More than 50% of APC's sales are from the North American market, whilst it has been striving hard to get a foothold in the European large segment market, ironically competing with MGE and other European companies. This acquisition provides a platform to complement their businesses and grow as one single business unit.
3. APC's InfraStruXure architecture aimed at the growing global datacentres market, along with MGE's market reach in Europe, propels the combined company to a leadership position in the European power protection market.
4. The acquisition combines the services of both companies, resulting in one of the most experienced and extensive footprints globally.
Schneider Electric has seen fit to retain the APC brand by merging the two big names to create a much bigger brand (like Emerson Liebert and Eaton Powerware). Having been fierce competitors in the power protection market, there is expected to be some consolidation of both the business, including - services, human resources, technologies, R&D; and facilities, etc. With all this anticipated activity, the sailing will not be all smooth. However, given Schneider Electric's past experience in integrating new businesses into the Group, we might have very well witnessed the creation of a power protection behemoth.
To get some insight into just how the ship will be sailed, see 'The DNA of powering change'.
APC-MGE fact file
APC-MGE offers critical power and cooling services from the desktop to the data centre to the factory floor. Its markets include:
Consumer/residential – as more and more users access critical data from the office or home over the Internet, usage of small UPS systems to keep PCs and residential gateways up and running, even during blackouts, is spreading.
Enterprise networking – the classical computer room has given way to numerous distributed technical rooms with rack-mounted servers, internetworking equipment and storage systems that require power protection and high availability features.
Industry – industrial applications include critical process for semiconductor, chemical or pharmaceutical manufacturing. Manufacturing plants have to cope with serious power problems (ie harmonics) that require special solutions or rugged equipment.
Telecommunications – telecom central offices typically operate from large battery banks (DC power). They also include AC powered equipment such as servers, storage systems or routers that require specific power supplies called inverters. The rapid deployment of third-generation mobile phone systems like UMTS creates new opportunities for UPSs and inverters in base stations.
Data centres – Internet data centres provide the physical environment necessary to keep web servers up and running 24 hours a day, seven days a week. They offer the highest level of power quality through fully redundant UPS and power distribution systems.
APC-MGE boasts more than 12 000 employees, including:
* More than 1600 solution engineers in the field.

* More than 500 inside support engineers.

* More than 1500 field service engineers who are all, in turn:

* Backed by a worldwide team of more than 40 000 consultants, systems integrators, and value-added partners.


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