Siemens snaps up partner PSE for process design

Sep 18, 2019 | Hot Topics

If you pay attention to the process industries (oil and gas, chemicals, and so on), you’ll know that much of the economic decision-making rests on the design of the chemical processes that transform crude into heating oil or petroleum by-products into commodity chemicals. It’s like baking: you can make cookies from a lot of different ingredients, bake them hot and fast or not as hot and slower … they’re all cookies, in the end, but some are better than others. What you choose to make (and how) depends on the ingredients you can source, the oven available to you and what, in the end, your consumers want. That, but more complicated and with thermodynamics, is process design.

Last year, Siemens announced a partnership with Process Systems Enterprise (PSE) to digitalize plant operations via device and status monitoring to predict future performance. PSE makes gPROMS, a process modelling tool that’s used in formulation and research, and engineering and later, manufacturing process optimization.

Fast-forward to earlier this week, when PSE today announced that it will be acquired by Siemens and integrated into the Process Automation Business Unit of Siemens Digital Industries. Notice that this is software not going into the Software business within Digital Industries. Confusing, that.

Eckard Eberle, CEO of the Siemens Process Automation Business Unit said in PSE’ press release about the deal that “high-fidelity predictive models and process data [play] an increasingly important role in the digitalization of design and operations in the process industry … With PSE we will be even better equipped to meet the specific requirements of our process industry customers.”

No word on why the partnership was seen as no longer sufficient, but all 160 PSEers and the current PSE management team will join Siemens when the deal closes sometime later this year.

No financial details were disclosed but PSE is relatively small — I’d say revenue under $30 million.

Bottom line: It’s easy to see why the two companies thought this was a good move. PSE gets far bigger distribution via Siemens than it could ever build on its own. Siemens adds an important early-stage component to its design suite for the process industries — and can claim that it enables process industry customers to build a more complete digital twin, one that starts with design and ends with production optimization.

UPDATE: I finally had the chance to check PSE’s filings, and revenue in 2018 was £18.6, up slightly from 2017. That’s $21 million at today’s exchange rate. The filing says that in 2018, software revenue grew 10%; the services business, however, contracted.