APC 2012 Annual Report Download - page 153

2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 151
BUSINESS REVIEW
4
TRENDS IN SCHNEIDER ELECTRIC’S CORE MARKETS
Utilities and Infrastructures
Electrical Utilities
The investment pace of European utilities has been affected by
the ongoing crisis. North American utilities have maintained their
investment effort towards more effi ciency, reliability and grid security.
Both geographies showed a particular focus on network renovation,
utility-scale renewable projects and energy effi ciency, in a context
of weak or even negative consumption growth. In China, the
GDP slowdown impacted utility investments, while India has been
penalized by the slowing down in its economy as well as fi nancing
constraints from certain players. The trend towards a smart grid
is now reaching all regions, stimulating innovation and enabling
advanced applications in distribution automation and advanced
distribution management systems. The increasing penetration level
of renewable energy, in conjunction with a greater demand side
participation in the grid management will be the main drivers for the
coming period (a s a matter of fact, energy consumers have become
more active, with the ability for instance to inject renewable energy
into the grid or to modulate their consumption ).
Oil and Gas
In 2012, Oil & Gas markets confi rmed the recovery engaged
since2010. With USD600billion invested in Exploration&Production,
investment strongly grew again and far-exceeded the level reached
pre-crisis in2008. Uncertainties caused by the geopolitical tensions
in Middle East and North Africa (Arabic spring), combined with the
sovereign debt turmoil have not altered the confi dence of Oil&Gas
companies.
The Middle East continued to invest in production capacities (Saudi
Arabia, Gulf), while large developments were underway to ramp
up production on large fi elds in Iraq. In North America, investment
was sustained by the shale gas and oil sands development. Finally,
strong investments occurred in Brazil, Latin America, Australia, with
promising developments in Central Asia.
Data centers and Networks
The global IT markets recovered modestly in2012, impacted by
slow growth in Europe-Middle East-Africa, lower growth in China
and a slowdown in the US in the second half. After a challenging
2011, x86 server growth (a key market tracker) was slower than
expected in2012. Asia Pacifi c, Europe and Latin America did not
perform as well as in2011. Meanwhile, the continued high growth
rates of tablets and smartphones and their impact on data storage
in the cloud were the bright story of the year.
Our transactional single phase market leveraged good dynamics
in emerging countries such as Africa, Asia and Russia, offsetting
slower growth in other economies.
The drivers for long term growth in Data Centers continued with
the migration to the Cloud and to larger Data Centers, where fast
growing Collocation and Cloud companies are battling with telcos
and IT outsourcers. The high growth in Cloud and Collocation led
to a signifi cant slowdown in the largest segment of the datacenter
market: internal datacenters within the enterprise (as enterprise
applications and services have migrated to these segments). Strong
IT business customers in the Collocation segment, benefi ting from
continued access to capital markets or from the backing of large
Private Equity groups, have accelerated their development. These
companies accelerated their international expansion as well to meet
growing global demand.