Power and automation technology company ABB, which had revenues of $32bn in 2009, has acquired software company Ventyx from Vista Equity Partners for $1bn.
Atlanta-based Ventyx provides a range of software to energy, utility and communications businesses, from asset management to energy analytics and solutions for planning and forecasting electricity needs, including renewables. The company has a large installed base in the US market and Europe and operates in more than 40 countries, with 2009 revenues of about $250 million.
One of Ventyx’s key applications enables the better matching of electricity generation with consumption, down to the household level, helping utilities to generate revenues from smart grids and carbon trading. The company’s load forecasting software can also help to integrate large amounts of unpredictable renewable energies, such as wind and solar power.
ABB plans to combine its network management business with Ventyx to form a single unit for energy management software solutions. ABB gets broader access to the utility enterprise management market and the energy management software market as a whole.
What fascinates me about the evolving smart grid sector is the way its development mirrors much of what has gone on in the past in the ICT market as a whole. I’ve mentioned before about the potential for small niche players to sell out to bigger rivals who need the expertise, not just in smart grids, but across the green ICT spectrum.
At the other end of the scale is the coming together of larger companies from very different markets to leverage their joint capability. In the ICT sector, history tells us that cultural differences in such mergers/acquisitions can pretty much negate the paper advantages. Think Capgemini/Ernst and Young, HP/EDS, or, in the UK context Serco/ITNET. It’s arguable whether any of these deals paid off. I’m not saying that ABB/Ventyx is not a good idea, but it takes great management to mix an industrial conglomerate and a software vendor and make the whole as much as, let alone more than, the sum of the parts.