Schneider Electric reports Q4, talks AVEVA

Schneider Electric reported Q4 results today — you can see them in full here — that also touched on how important AVEVA is to the overall product menu. A couple of nuggets from the press release and investor call presentation:

• Schneider Electric’s fiscal 2020 revenue, in the end, was down 5% on an organic basis. Q4 revenue was up 1% on an organic basis and steadily improved up as 2020 went on
• The company’s software revenue was up 6% on an organic basis for the year and now accounts for 17% of the company’s total revenue
• Putting those two facts together: software, in general, is incredibly important to Schneider Electric’s top and bottom lines — it’s a very profitable business and, with license options like subscriptions, can insulate the company a bit when slow end-industry investment stalls hardware buys
• AVEVA saw the “renewal of several large contracts [in Q4]”, a fact which we already knew from AVEVA’s statement in January. More detail today: “The Group’s industrial software offer through AVEVA performed strongly in the quarter … The Group continues to offer OpEx solutions combining Schneider Electric and AVEVA to drive efficiency and sustainability for customers.”

Schneider Electric gave an interesting example of this combined go-to-market: Data Centers. Not what one thinks of when thinking of how AVEVA used to approach the market:

The Group saw strong revenue growth from the DC [Data Center] end-market in the quarter, notwithstanding the high base of comparison from Q4 2019. The Group’s DC offering across the full spectrum of product, systems, software and services saw good demand throughout the year across geographies. The demand is supported by factors including increased internet traffic, roll-out of 5G, the increased use of video/virtual meeting platforms and automation/digitization trends in nearly all aspects of business and industry. The Group continues to provide a unique suite of solutions (incorporating Energy Management technologies coupled with AVEVA visualization tools) for customers across all types of data center, from the large off-premise installation through to more localized or Edge solutions where there is increased demand for lower latency, higher fidelity and data security.

The visualization tools spoken about here aren’t 3D flythroughs or rendering — they’re from AVEVA’s Unified Operations Centre, which integrates information from IT and OT systems, among other sources, to give operators a clear view into operations. If actions need to be taken as a result of that view, AVEVA’s monitoring, control, and industrial information management solutions can jump into play, to help make that happen.

We should expect to see many more of these types of offers — as you can see from the investor slide deck, SE sees its software assets as a way into much more of customers’ operations than was possible before:

You might notice RIB Software in the Build section of this slide — how’s it doing? Not much information given — I’ll listen to the earnings call replay and update if I learn more.

The Q4 results and improving trends as 2020 progressed lead Schneider Electric to optimism for 2021. It sees 2021 organic revenue up between 5% and 8% on an organic basis (so excluding the likely OSIsoft acquisition and anything else it might acquire during the year).