With the Emerson Global Users Exchange going on this week in San Antonio, Texas, it’s not as if the automation supplier didn’t have plenty of news to share already. But Emerson decided to make another big announcement today: It has agreed to acquire GE’s Intelligent Platforms division.
Peter Zornio, Emerson’s chief technology officer, flagged the news at an event press briefing this morning before letting industry journalists know that he wouldn’t be able to comment any further at this point. “We don’t own them yet, so we can’t say anything about where it’s going,” he said, adding later, “It’s another key piece of digital foundation for us to add to our portfolio as well as some digital capability in our Plantweb area.” Plantweb is the digital ecosystem that Emerson launched two years ago and serves as its Industrial Internet of Things (IIoT) platform.
The excitement at the Emerson Exchange today has been palpable, with quiet murmurs at lunch or in the halls between sessions about finally getting into the programmable logic controller (PLC) space. The implications of the acquisition are relatively clear: Pulling GE’s PLC technologies into the portfolio will enable Emerson to go to market with a broader range of control capabilities. Emerson—a strong player in continuous processes, particularly in oil and gas, where its DeltaV control system is widely used—will now have expanded opportunities in machine control and discrete applications in some key hybrid markets, such as metals and mining, life sciences, food and beverage, and packaging.
Interfacing Intelligent Platforms’ PLC technology with Emerson’s distributed control could help customers connect their “islands of automation” within the plant, the company said, further enhancing operational performance, safety and reliability.
“Adding GE’s Intelligent Platforms business makes Emerson an even stronger player in the automation space and expands our capabilities to serve the needs across process, hybrid and discrete markets,” said David N. Farr, Emerson’s chairman and CEO. “This is another important investment in our global portfolio of automation technologies, offering discrete and machine control capabilities that complement our process control expertise to provide better solutions to our customers.”
It’s interesting to look at today’s announcement within the GE context of late. Under Jeff Immelt’s leadership, GE made it very clear how dedicated the company was to driving digital transformation in industry. Since John Flannery took over as CEO a little more than a year ago, that focus has been less clear with Flannery putting more emphasis on the company’s aviation and power activities and dialing back its IoT ambitions in an effort to turn a hobbling business around. Rumors began to swirl through industry this summer about GE selling off key parts of its digital division. And just yesterday, GE made a surprise announcement that it had replaced Flannery with Larry Culp, the first outsider ever to take over the GE helm.
GE Intelligent Platforms has been a strong player in the growth of digital industry—including the recent development of cloud-connected controllers and devices—and could be well served by joining Emerson’s like-minded ranks. “This transaction enables Intelligent Platforms to be best positioned to pursue its growth strategy, while accelerating our reinvestment in GE Power to develop the energy technologies of the future and provide the world with reliable, affordable electricity,” said Russell Stokes, president and CEO of GE Power.
Intelligent Platforms recently developed a new family of cloud-connected controllers and devices to enable smarter plants, which will fit in well with Emerson’s Plantweb digital ecosystem.
The Intelligent Platforms business, based in Charlottesville, Va., provides industrial automation for machine control, industrial computing, I/O and networking devices, project and integration services, and other hardware/software systems. These products will complement the lineup in Emerson’s Automation Solutions business, providing critical capabilities in discrete control.
“Intelligent Platforms brings a solid product portfolio to serve our target markets, along with a significant installed base,” said Lal Karsanbhai, the brand new executive president of Emerson Automation Solutions, introduced yesterday at Emerson Exchange as he took the reins from Mike Train, who will take over as president of Emerson. “We are extremely pleased to have this unique opportunity to add a recognized discrete control capability to our growing portfolio of products and software applications that help our customers operate more safely and efficiently.”
The acquisition is expected to close in the first half of fiscal 2019, subject to regulatory approvals, GE’s consultation with employee representatives where required and other customary closing conditions.