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Africa Outlook

Schneider Electric
Africa energy
Africa technology
energy technology
Southern Africa
data centres
APC

SCHNEIDER ELECTRIC

Access to Energy for Everyone

Schneider Electric’s influence across the SADC region has successfully infiltrated numerous industrial and energy domains over the years, but its more recent data centre efforts emphasise a more innovative facet of its operations

Writer: Matthew Staff

Project Manager: Donovan Smith

Based on Schneider Electric’s motto of ‘Life is On’ and its belief that access to energy is a basic human right,  the organisation continues to diversify and migrate across sectors in order to diffuse its innovative solutions across as wide a spectrum as possible. 

As the global specialist in energy management and automation, Schneider Electric creates connected technologies that will reshape industries, transform cities and enrich lives.

Catering for all nations within the SADC region - from Angola, Malawi and Zambia all the way down to South Africa - its four pillars present in the current day set the tone for sustainable services, forward-thinking solutions and wider community enrichment; all with this common goal of energy accessibility in mind.

Often, these forays into new domains have been facilitated by strategic acquisitions to compound its successful organic growth, and this has certainly been the case in regards to its recent data centre drive; an area at the peak of development in Africa at the moment, crying out for a Company like Schneider Electric to apply its technical expertise.

“As part of our IT infrastructure business, our role in traditional date centres was enhanced via an acquisition of American Power Corporation (APC) which subsequently formed Schneider Electric IT Business Unit, enabling our penetration into the infrastructure markets,” explained the Company’s Vice President of the IT Business, Bruce Grobler in 2016.

“APC by Schneider Electric is divided into three main segments; distribution which looks after traditional single-phase backup power, home and network facilities, and office backup power. Then there is secure power, where we go to sectors such as mining and water and provide secure power for critical applications. And finally, we have the traditional date centre and IT infrastructure business.”

As a clear market leader in the market, APC’s existing offering prior to the Schneider Electric acquisition was blessed with differentiators and unrivalled value, leaving the latter in an odd - yet comforting - position where it could both leverage the existing model, while using it as a platform to introduce its own expertise to add further value to the offering.

Through the secure power strand of Schneider Electric, the business was able to bring a new dimension to the APC structure, ultimately forming a best of both worlds where each business’ expertise, specialised business partners and reputation could flourish under one banner.

“Our data centre and secure power business is growing astronomically and it’s now a case of trying to rebrand ourselves in terms of retail to capitalise on APC’s role as market leader and to revolutionise ourselves from a brand awareness perspective in order to be strong in this space for a very long time,” Grobler emphasised.

Adding value

This most recent pillar epitomises the evolution of Schneider Electric over the years, in establishing a stronghold in a certain industry segment, optimising the knowledge already established within the business, and making up for any shortfalls in the expertise-base through methodical acquisitions.

Its traditional partner pillar kick-started this ethos in catering for the typical distributor, equipment and contractor space via its energy management solutions.

“So this included the panel builders, distributors, contractors, overloads and traditional switchgear equipment that we are specifically known for,” Grobler picked up. “The channels there are traditional distributors, electrical distributors, wholesalers, our electricians, our panel builders and those kinds of avenues.

“The next pillar is our industrial market, looking after various segments such as mining, water, and food and beverage; providing system integrators, industrial integrators and turnkey projects into these various segments.

“The third pillar is our traditional energy market, and that’s what we deem as our energy distribution segment. We don’t do the transmission of energy, but we do distribution, and that includes transformers, medium voltage switchgear and very much the distribution to power grids and smart grids across Southern Africa.”

 As showcased by the APC acquisition, Schneider Electric’s success across each pillar has derived from not only its reputation within the wider industry, but its consequential ability to leverage this reputation to complete some of the most significant acquisitions in each respective sector.

From a partner project perspective, this has included the acquisition of a local panel making facility in South Africa to facilitate customised electrical panels three years ago. On an industrial scale, the same method was applied in acquiring multiple companies to enhance its standing in the market; resultantly being able to integrate a hybrid DCS system to boast a platform up there with any others in the surrounding sector.

Energy-wise, the acquisition of Ariva proved to be one of the business’ key investments of recent years from a distribution point of view, to add a further element of vertical integration to its manufacturing function.

Grobler continued: “What Schneider Electric does very well is not only bring in a company, but then adds value to that company. For instance, on the IT side, we were very much industrial but we were missing a key aspect of our world in terms of the IT infrastructure.

“Schneider Electric really wanted to get into that space and APC is the market leader in being able to create not just the backbone of a data centre but the entire infrastructure to build around that too. So that’s really how this final pillar came to be, and Schneider Electric thought that would be a massive opportunity for us to grow in that world.”

Market maturity

Rather than simply taking on the best in the business and thriving under that guise, Schneider Electric has proven itself equally adept at reinventing each of its pillars over the years in reaction to various industry trends and consumer requirements.

From a technological perspective, this inevitably takes on added dimensions thanks to the ever-changing nature of the industry, and the Company has subsequently had to revolutionise its offering and bundles to ensure that its portfolio adds sustainable, long-term value, rather than simply addressing the status quo.

However, the main challenge derives not from sector trends, but the levels of maturity across the Company’s geographical footprint, as Grobler detailed: “You get South Africa which is one of the major BRICS and then you get the other SADC countries like Angola or Mozambique or Zambia who might be lagging slightly behind.

“So in regards to trends in South Africa, it’s a very mature market and I’m seeing South African institutions not wanting to build their own data centres, rather taking the prospect to a traditional colocation (colo) company and saying ‘you host it for me, I don’t want to hire people, all I want to do is hire space from you’.”

Global internet heavyweights are therefore coming into the country via a hosting partner, while players in peripheral industries such as telecoms are being presented the opportunity to branch out into new domains of the first time via the expertise that companies like Schneider Electric can offer.

Conversely, in the rest of Southern Africa, companies are still looking to carry their own burden - or flagship data centre, depending on the outlook - which in turn calls for heightened levels of education and support which can only be offered up by a business of Schneider Electric’s knowledge base.

“What we’re doing now is certifying and training our partners so they become an extension of me into Africa,” Grobler noted. “So we make sure that we train partners that are local to be able to give that support in the country.

“I am also opening up a training academy, which is very difficult normally for companies like us, which will train people across basic fault finding, partnership building, engineering certifications and technical aspects; it will be in South Africa, for Africa.”

Energy for everyone

Empowering individuals and enhancing skill-sets is one key facet of the Company’s corporate social responsibility plan too, with a skills gap still evident across some areas of Schneider’s jurisdiction.

However, its primary ambitions remain intertwined in its strive towards energy accessibility, and its BIPBOP initiative to create electrification for Africa forms a pivotal part of this drive at present.

“We went to a village in Durban with plastic lights that you can charge and put into your housing, and we pretty much installed all of these in the houses, as well as a central battery charging facility,” Grobler explained.

Other insertions include solar street lamps and water purification plants as part of its BIPBOP scheme, and this is compounded by further charitable works that embrace areas of education and practical application, to bring its CSR efforts full circle back to its core operations.

“Our business aspirations are not just about continuing to be the market leader in transactional business, but are about launching ourselves into becoming smarter,” Grobler stated. “We need to make sure that even though we’re the market leaders now, we continue to keep growing with the trends and revolutionising the business. We will continue to provide solutions to existing customers of the business while striving to position and maintain ourselves as industry leaders.

“Overall, our key differentiator has always been access to energy for everyone; from people in Africa to industrial corporations, there needs to be access to energy. And this will continue to be the key driver of everything that Schneider Electric does moving forward.”