APC 2011 Annual Report Download - page 147

1452011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
BUSINESS REVIEW
4
TRENDS IN SCHNEIDER ELECTRIC’S CORE MARKETS
Utilities and Infrastructures
Electric power
While emerging economies keep on investing heavily in their grid
infrastructures to meet their growth objectives with strong rising
demand, mature economies have adjusted their investment plans
to deal with aging grid assets and the need to connect more
renewable sources, still maitaining or improving their performance
in terms of reliability of power supply. As a result, the global e lectric
p ower market keeps enjoying a steady 4 to 6% growth rate.
Themomentum towards smart grids is materialized by a growing
activity in demonstration pilot projects to test new technologies
and associated business models, as well as sustained investment
in distribution automation and advanced distribution management
systems which offer attractive return on investments for grid
operators. Market accelerators such as the increased activity in
grid-connected renewables, the roll-out of electric vehicles and the
implementation of demand response programs will strenghten the
need for new investments world-wide.
Oil and gas
In 2011 Oil & Gas markets have confi rmed the recovery engaged
in 2010. With more that USD500billion invested in Exploration &
Production, investment surged by 15% in 2010, and exceeded the
level reached pre-crisis in 2008.
Uncertainties caused by the geopolitical tensions in Middle East and
North African (Arabic spring) together combined with the sovereign
debt turmoil have not altered the confi dence of Oil Companies in
2011 who pursued their investment. Those short term uncertainties
do not hamper the long term vision where more than 75% of energy
demand is supplied by fossil energy.
The Middle East continued to invest to maintain its production
capacities (Saudi Arabia) while Iraq fi elds are promised to large
developments to tap its large O&G reserves. In North America
investment is sustained by the shale gas and tar sand development.
Schneider Electric has been present in all key O&G geographies
and large Oil & Gas companies, as well as major EPC companies,
have been Schneider’s customer for years. Schneider supplies
energy management and control solutions that allow them to
improve Energy Management and brings them innovative solution
to tap reserves in harsh environment. By complementing its O&G
expertise and IT capabilities, the acquisition of Telvent in June2011
will foster the development of new integrated business solution that
will deliver more effi ciency to the Oil & Gas infrastructures.
Data centres and Networks
The IT global markets grew at a moderate pace in 2011, impacted
in the second half by a slowdown in Europe with an expected
spillover into a more cloudy 2012. After strong growth in 2010, x86
server growth was more modest in 2011, primarily supported by
Asia and Latin America.
At the same time, the drivers for long term growth remained
unchanged with the migration to the Cloud and larger Data Centres
where fast growing collocation companies will battle it out with
T elcos and IT Outsourcers. Strong ITB customers’ in the Collocation
segment, with access to capital markets or with the backing of large
Private Equity groups, as well as Telcos will continue to operate their
Data Centres at very high utilization and will expand their number of
sites on a global basis to meet demand.
Our Data Centre Solutions and Services offerings experienced a
strong growth confi rming ITB’s leadership in those key segments,
reinforced further with the integration of Unifl air, Lee Technologies
and Viridity. In the fast growing Data Centre Infrastructure
Management software segment, Schneider Electric was named a
Market Leader by IDC. In the Emerging markets, Schneider Electric
strengthened its position in India with the acquisitions of Luminous
and APW President.