Stephen Dow
President
Embedded Computing
Emerson Network Power

This interview was featured in the March 2008 issue of CompactPCI and AdvancedTCA Systems magazine.

Q&A

With the acquisition by Emerson of Motorola Embedded Communications Computing (MECC), Stephen Dow became president of the Embedded Computing business of Emerson Network Power. Here Joe Pavlat, CompactPCI and AdvancedTCA Systems editorial director, and Stephen discuss an acquisition of interest to many in the embedded space.

Joe – Stephen, Emerson isn’t considered much of a player outside of their power control systems for data centers. So, give us your 50,000-foot view of the transition from Motorola embedded communications computing (MECC) to Emerson and how you see things going forward.

Stephen – Emerson Network Power has been growing rapidly through a variety of acquisitions. Its core business, as you mentioned, is power supplies and power systems. It’s not just for data centers though, they also acquired Huawei’s power supply business, as well as Nortel’s and Ericsson’s. Their Network Power Group, where the Embedded Computing business resides, also supplies the chargers for Nokia and Motorola. So Emerson does quite a bit of business with the same telco customers as MECC.

They have been very successful targeting growth by acquiring businesses that are adjacent to their current product lines. They see embedded computing as adjacent to their power business and since MECC has many of the same customers, it makes good business sense for Emerson to grow their business through this acquisition.

Emerson recognized that the commercialization of power supplies was coming to fruition, which is why they bought the power supply companies, and the reason companies like Huawei, Motorola and Ericsson don’t build power supplies any more is because you can get them commercially better, cheaper, faster. In other words, Emerson saw an opportunity for exponential growth, and they went after it.

They believe that embedded computing is about to hit the same kind of ramp – that the opportunity for commercialization of board-level products and system-level products in the embedded space is on the verge of experiencing a significant growth period – which is already evident in the number of traditional COTS-based industries in addition to telecom (for example, military, aerospace, medical and industrial automation) that have expressed interest in open standards architecture.

An important distinction from the way many companies operate is that each of Emerson’s businesses must stand on its own and meet its own plan. If one division is struggling, they don’t come and hammer the rest of them; they expect you to actually run your business as a business.

Joe – So what makes it exciting for you to run this business?

Stephen – Think of it – this new business has the DNA that includes Motorola’s embedded computing business, Artesyn, Force Computers, Heurikon, Blue Wave Systems, Mizar, Prolog, NetPlane and Spider Software! These companies have been in this business a long time and for the first time they have been brought together with a very clear direction and very clear support to go ahead and grow. This is a big business, this is prime time, and Emerson is expecting it to grow. And that’s very exciting! Plus, if you consider Emerson’s financial track record, they are a $23 billion dollar company. They are 117 years old. They have 51 years of consecutive dividends to share holders. They have had only three CEOs in the last 50 years. Clearly they’re doing something right.

I treat this opportunity like I now have a $700 million dollar start up that I get to run. That is the way Emerson wants me to manage the business and attack the market. And as you know, Joe, I do not “NOT succeed.” The market opportunity is there, the company support is there and I have every intention of growing this business and our leadership position. And that’s what makes it exciting to me!

Joe – Motorola has very good global reach and many AdvancedTCA and CompactPCI deployments are outside of North America. Does Emerson have the same reach outside North America that Motorola does?

Stephen – More than 50 percent of Emerson’s business is outside the U.S. and I have a tremendous amount of Emerson support in Europe and Asia. In fact, my relationships with companies like Nokia-Siemens, Ericsson, Alcatel-Lucent and Huawei, for example, are strengthened now because they already do quite a bit of business with Emerson. And these companies do not consider Emerson a competitor.

Joe – That was always the challenge under the Motorola banner. What can Emerson bring to the embedded space, the telco space, the enterprise space that Motorola could not?

Stephen – The very first thing that will happen is a rejuvenation of the embedded computing business. With Motorola, embedded computing was not core to its business. But Emerson doesn’t think that way – they think about acquiring businesses that will increase value to their shareholders.

Emerson took a look at this business and said, “you know, this embedded computing stuff is pretty good so what’s wrong with doing medical applications or military applications if it is all embedded computing? ”Their answer was – “Nothing!”

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