Schneider brings Citect field operations in–house

Schneider Electric has announced plans to integrate the field operations team of its Citect SCADA and MES software subsidiary with that of the parent company with effect from January 1, 2009. Field operations, in this context, cover sales, professional services and training. At the same time, Schneider has announced plans for further investment in R&D at Citect. The company says that the changes are designed to improve service to customers and further strengthen development of the Citect software suite. “The combined expertise of the Citect and Schneider Electric automation field operations teams will give customers simpler, but greater access to our integrated automation solutions, while our increased investment in research and development, and focus on service and support, will further increase the value we offer customers,” said Citect CEO Christopher Crowe.

Growth

Citect was acquired by Schneider in January 2006 after a hard-fought take over battle during which it was forced to increase its offer from an initial Aus $1.55 a share or Aus $80 million to a final Aus $2.20 a share or Aus $115 million. The Australian SCADA vendor had, up to that point, been seen as one of the few credible hardware- independent SCADA vendors alongside Wonderware and Iconics and had branded itself “one of the world’s largest independent real-time intelligence software companies.” Since then, and despite reports from competitors in Europe and North America of a diminished presence―but then they would say that, wouldn’t they?―Schneider claims that the two companies have achieved average growth of 20% in the SCADA business, based on a dual-brand strategy under which Citect sells the CitectSCADA package, while Schneider sells its own branded version, Vijeo Citect, that has been developed by Citect to offer customers the option of a complete, integrated Schneider Electric hardware and software solution.

Under the new arrangement, Citect will continue to develop both Vijeo SCADA and CitectSCADA in concert with its other software products. Citect has invested heavily in recent years, both before and after the Schneider acquisition, in attempting to develop an MES capability to stand alongside the SCADA offering and sustain the rate of growth to which the business had become accustomed. Significantly, perhaps, the latest announcement makes no mention of MES or of the Ampla MES product other than  referring to “other software products.”

Integration?

Schneider says that CitectSCADA will continue to be offered through Citect’s network of more than 500 partners across Asia Pacific, South Africa, Europe and the Americas. However, the position of wholly owned subsidiaries such as Citect Ltd. in the U.K. is less clear. INSIDER attempted to contact Citect Ltd. managing director Paul Hurst to obtain some clarification, but at the time of writing had yet to receive a response. Meanwhile the Australian process and automation magazine PACE appeared to be quoting a Schneider source when it reported that the “sales, professional services and training teams will now be part of Schneider Electric’s in all of the 20 worldwide locations where Citect runs offices.”

The move, which was described by Crowe in an interview with PACE as “stage two of post-integration,” appears to represent a further step in the evolution of Citect from independent software vendor to integrated software division. While enhancing Schneider’s ability to offer turnkey solutions, it can only diminish Citect’s standing as a competitor for implementations on third-party, non-Schneider hardware platforms. The experience of other software vendors who have been acquired by and subsequently integrated with major PLC hardware vendors does little to suggest that Citect or Schneider have a longer term future as independent SCADA or MES software vendors or indeed that Citect itself has a future as anything more than a Schneider brand.

That view is if anything confirmed by the comment of Schneider’s Pacific Zone managing director Lionel Finidori that “The integration of the field operations teams, and their on-going management under Schneider Electric, adds a new level of service to the combined group, as they are able to more expertly address customers’ needs for a hardware and software solution” even if, as he claims, “Citect’s expanded R&D program and its focus on services and support protects the integrity of the software, both at the development and implementation stages.”

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