What next for Vertiv after rebranding from Emerson Power Network?
Following the recent rebranding of Emerson Power Network to Vertiv, its new management is upbeat about the future. The company is now expected to operate with greater flexibility while focusing on long-term investment and growth.
It takes great courage and foresight for a big company to take the often side-stepped path of business rebranding. It is an exercise associated with high costs, lengthy legal procedures, but even worse, the risk of entirely losing the company’s identity.
Yet, early this year, that is what Emerson Network Power decided to do when in a bold move it rebranded to Vertiv, following its acquisition by Platinum Equity in a transaction valued at $4bn. Vertiv is now all set to grow its market share in the Middle East and Africa this year, as it focuses on some of the key sectors in the region.
As an independent company, it is able to operate with greater freedom in terms of deciding on business strategies and investment decisions. Vertiv plans to position itself as a leading provider of mission-critical infrastructure technologies for vital applications in data centres, communication networks, and commercial and industrial environments around the region.
"With the launch of Vertiv, we are now able to operate with greater speed and agility, while building on a strong foundation of industry-leading brands, solutions and a regional footprint,” says Pierre Havenga, managing director, Vertiv, Middle East and Africa.
"We continue to see stronger demand in this region from industry verticals such as telecommunications, manufacturing, healthcare and education sectors along with the consistent initiatives by the government agencies on e-governance and digitalisation."
Vertiv is now a privately held company, with global revenues of $4.4bn, according to 2016 fiscal year under Emerson Network Power. Headquartered in Columbus, Ohio, USA and with regional HQs in China, India, the Philippines and the UK, Vertiv designs, builds and services mission-critical technologies for data centres, communication networks and commercial and industrial applications.
Its flagship brands include Asco, Chloride, Liebert, NetSure, and Trellis. With over 20,000 employees worldwide, it serves a broad range of customers in the power, thermal and infrastructure management areas.
Some of its well-known customers include Apple, AT&T, China Mobile, Ericsson, Facebook, Microsoft, Reliance and Verizon.
Vertiv is already building on the broad portfolio of product and service offerings for power, thermal and IT management capabilities it previously offered as Emerson Network Power, including its flagship brands ASCO, Chloride, Liebert, NetSure and Trellis.
Following the rebranding, it expects to enhance customer support with the help of over 255 service centres worldwide, 3,000 service field engineers and more than 400 technical support and response people across the globe.
“As a new, standalone company, Vertiv now has the opportunity to develop the business quicker and to make strategic decisions which are focused purely on the industry we operate in. The UAE as well as the broader Middle East & Africa region will continue to be a key market for us as it matures towards advanced deployments,” says Giordano Albertazzi, president of Vertiv in Europe, Middle East and Africa.
The company has been operating in the UAE for many years as unit of Emerson Group and it expects to continue supporting the country’s evolving needs in IT and digital infrastructure. Vertiv is looking to expand its network of technology distributors and resellers.
The spin-off, designed to allow the company be more dynamic, was announced in July 2015 and was eventually completed late last year. Although the unit is a leader in data centre power systems, its revenue has been declining, falling by 9% in the second quarter of 2015, and by 28% over from 2011 to 2014.
Emerson invested some $3.8bn in acquisitions to build its power unit since 2000, but it has been the least profitable part of the company, according to a Bloomberg article, and sales are in decline. Without it, Emerson’s profit margins are expected to grow form around 16% to 19%.
Platinum Equity has a strong relationship with Emerson, given that they previously bought a 51% controlling stake in Emerson’s embedded computing and power business.
According to Platinum Equity chairman and CEO Tom Gores, the move to buy Emerson Network Power is an investment that will be a cornerstone in their portfolio and is a great fit for Platinum Equity that plays right to their strengths.
“Emerson and its board of directors determined that a sale to Platinum Equity would provide the best opportunity to strengthen Emerson’s balance sheet and drive value for shareholders while also ensuring that Emerson Network Power is well-positioned for success moving forward,” says Gores.
Vertiv will continue to offer products for power and thermal management in data centres and other industrial environments, as well as infrastructure management, monitoring, controls and software solutions for critical applications.
The company is also targeting the banking sector -- as lenders are undergoing digital transformation.
"As a crucial enabler of that ecosystem, we design, build and help manage critical infrastructure which is essential for the IT and automation to work all the time. Banking industry is also undergoing digital transformation and pushing more applications on customer's fingertips. This and similar applications in other consumer focused businesses will push more computing and storage towards the edges of the network," says Havenga.
"We have pioneered converged solutions that combine power, thermal and infrastructure management solutions into easy to design and deploy modules starting from a single Smart Cabinet to medium sized data centres."
Vertiv sees strong demand for its services from the telecommunications industry, as the telecommunications companies are aggressively increasingly their bandwidth and coverage on fixed-line broadband and mobile networks.
"Given the exponential growth expected in data generation, transmission and processing, we foresee telecommunications providers to invest on more robust and reliable infrastructure not just in their networks, but also their data centres.
"We are in the right position to enable the customers and technology providers in this industry with our superior understanding of their applications and infrastructure needs," adds Havenga.
Another potential growth area would be the transportation and manufacturing sectors as the government and private sectors put in high cost investments to improve infrastructure where high levels of efficiency are required.
With oil revenues down for nearly two years, GCC governments have been calling for operational optimisation. Utilities and other government bodies are increasing their levels of efficiency to cut down operational costs. This is one area that Havenga believes will be effectively served by Vertiv, which aims at guaranteeing high levels operational efficiency.
“Vertiv LIFE Services for instance provides real-time visibility into critical systems, resulting in early detection of anomalies and immediate reaction in case of alarms. Adding in the diagnosis capability of remote system engineers allows our technicians to be armed to quickly, accurately, and safely restore equipment to its proper operating condition,” says Havenga.
“Our team of experts constantly monitors all relevant parameters related to critical assets. This allows our experts to operate for immediate resolution in the case of an early warning condition. This fast, effective incident response capability maximises the availability of critical infrastructure and delivers uptime assurance.”
He says that Vertiv remote service experts can monitor equipment from the Vertiv LIFE Services centres, proactively analysing data and trends, to recommend actions for ensuring equipment always performs at its best.
“Our approach to servicing critical infrastructure covers all aspects of availability and performance, from single power and cooling equipment to entire mission-critical systems. Installation, start up, commissioning, site assessments, battery maintenance, replacements, upgrades, retrofits, 24/7 emergency service and remote monitoring and diagnostics are just a selection of the services that contribute to guaranteeing business continuity,” says Havenga.
Proactive servicing of an emergency lighting system maximises efficiency and minimises the risk of system failure. An emergency lighting system that fails to function correctly in an emergency situation could put lives at risk and by law building managers and owners have a responsibility to ensure that their emergency lighting systems are maintained in an efficient state.
The fundamental purpose of a standby power system is to provide a reliable source for the critical load, therefore it is important that maintenance of the equipment is undertaken at regular intervals to ensure that it continues to provide its vital function.
This is a gap that Vertiv hopes to fill with its comprehensive services on emergency lighting, central battery and other standby power systems including replacement of components, batteries and also complete systems utilising its team of customer service engineers.
Hybrid cloud a new common?
Havenga says that Hybrid cloud has the potential to become a norm for most enterprises.
According to IDC, 45% of ICT spend by enterprises in 2018 will be a mix of co-location, hosted cloud and public cloud data centres.
"The reality of these existing and emerging cloud trends is that enterprises are looking to bring applications online faster and cheaper. The challenge, though, is making sure that all computing resources are being utilised,” says Havenga.
Recently, Stanford’s Jonathan Koomey and Anthesis Group’s Jon Taylor found that enterprise data centre servers still only deliver, on average, between 5 and 15% of their maximum computing output over the course of a year. Additionally, the same study found that 30% of physical servers are “comatose,” meaning they have not delivered computing services in six months or more.
With that in mind, Havenga reminds that it is vital for organisations to identify these so-called zombie servers which can affect data centre productivity and can even be a security risk.
"The key is to have a smart power distribution system working in concert with an IT asset management DCIM monitoring that is controlling the PDU at the individual socket level. This is where DCIM is vital in a cloud strategy. DCIM is the zombie slayer, helping identify these comatose or zombie servers, saving up valuable space, power and other critical IT assets in the process," he says.
“At the same time, regional telecommunications providers are investing in their network infrastructure and data centres for increased internal demand and colocation opportunities. We are also expecting substantial growth in edge computing across all industries as the demand for IoT develops and network infrastructure is designed to accommodate this growing trend in computing and data management,” says Havenga.
Edge computing is data processing power at the edge of a network rather than processing power in the cloud or a central data warehouse, thus improving time to action and response time for businesses.
According to Havenga, in terms of industry verticals, Vertiv is well-positioned to support today’s transformational growth in mobile and cloud computing markets for their primary sectors, namely, internet data centres (IDC), and banking, financial services and insurance (BFSI) and industrial applications.
“In addition, there are a number of large infrastructure projects in healthcare and transportation which are currently in progress providing opportunities incremental to the traditional data centre business,” he says.
Havenga also sees growth happening in the telecoms market. “The telecommunications market is also continuing to expand with new technologies such as 5G about to come on-board and the hardening of network infrastructure in the region.”
Havenga hopes that Vertiv will perform well in these verticals because of its deep understanding and breadth of products and services in these verticals.