Schneider Electric Makes Two Buys in Building Management

The buying spree continues with two pick-ups in France.

Schneider Electric purchased two companies in building management today as the race to build a suite of comprehensive suite of energy services rolls on.

Vizelia provides real-time energy management software for commercial buildings, similar to applications, similar to applications from BuildingIQ and EnerNoc, while D5X provides services to optimize how energy gets consumed in buildings, similar to what  fast-growing Scientific Conservation does. Both Vizelia and D5X are from France like Schneider. Vizelia only employs 12 people but it is expected to generate 4 million Euros in revenue for Schneider in the first year.

Expect Schneider to link these applications into its demand response offerings. Schneider expects demand response and demand management to become growth markets.

“When you talk about demand response, it is the avenue for connecting demand to supply. Is it something that automatically occurs? That is an interesting question. If it did, it would defy all historical logic to this point,” Chris Curtis, president and CEO of Schneider's North American operating group told us recently. “Demand response is a long ways from being a commodity. In fact, it is a question if it every will become a commodity because everyone’s situation is different.”

The two purchases come amid an industry-wide shopping spree. Earlier this month, ABB bought Insert Key Solutions, which specializes in asset management and control software for power plants and utilities, and electric motor maker Baldor Electric. EnerNoc made its ninth acquisition with Global Energy Partners. Itron also bought Asais, another French company, earlier this month to help it with smart meter data.

The overall idea behind these acquisitions is that once and intelligent network exists that connects utilities to their customers, applications can sit on top of those networks to control air conditioners, lights and other appliances for efficiency or decipher patterns in usage and consumption through mining meter data. Ultimately, companies like Schneider, ABB, Silver Spring and EnerNoc could serve as the intermediary between consumers and suppliers of electricity.

As Peter Graf, SAP's chief sustainability officer, noted last week, corporations to date have not tracked energy consumption with its centralized software applications in the same way the track finance or productivity. With increasing regulations and rising energy costs, they now will.

Many of the building-centric applications will ride on top of existing building management systems from companies like Honeywell and Johnson Controls, which will likely buy companies too. Honeywell, in fact, has already digested two companies in 2010.

Buildings, and the things inside of them, account for 39 percent of all energy consumption in the U.S. and they aren't particularly efficient. Look out on an urban skyline: very few of those lit offices are occupied.

Large companies like GE, Siemens, ABB, Schneider (the four horsemen of the smart grid) and Cisco have been the most active acquirers but even relatively new companies like Tendril and Silver Spring have been scooping up startups. The smart grid shopping spree started back in November 2008.