New AspenTech will absorb Emerson’s OSI and Geological Simulation units.

On October 11, Emerson Electric announced that it would contribute its software units OSI Inc and Geological Simulation Software to AspenTech and create a new software leading giant tentatively called “New AspenTech.” Emerson also announced a $6 billion cash contribution to gain a 55 percent stake in this new company.

Emerson’s QuickShip service helps companies move parts and products quickly. (Image courtesy of Emerson Electric.)

Emerson Electric has a fairly straightforward business purpose—“We drive innovation that makes the world healthier, safer, smarter and more sustainable.” This is broad and generic, sure, but it speaks to a growing sentiment among the public faces of companies today. Society wants to see a company doing good work for the world, as opposed to seeing it do good things just for its business cases.

Emerson’s Living Our Purpose page showcases its causes of Planet, Champion, Humanity, Inclusion and Future, with several examples for each case. Through its #weloveSTEM initiative, the company is committing resources toward helping to educate STEM students during the pandemic, hosting day camps at its facilities around the world, and sponsoring the annual AVENTICS compressed air-powered vehicle competition.

AspenTech, on the other hand, says that its purpose is “Optimizing Assets to Run Safer, Greener, Longer and Faster.” The company is 40 years old, born from a grant to MIT’s chemical engineering group from the U.S. Department of Energy in response to the energy crisis of the 1970s. AspenTech’s asset management software uses artificial intelligence, digital twins and plant digitalization to help a company monitor and manage the performance of its assets while optimizing its processes. Like Emerson, AspenTech’s purpose is to make the world a better place, and it does this by optimizing its customers’ assets.

Emerson has been working to build a strong sustainable software portfolio that adds to its current offerings, and this acquisition brings in several proven software pieces that can be used immediately to scale up its offerings. This new AspenTech will have more than 3,700 worldwide employees and an expected revenue of $1.1 billion in fiscal year 2022. The business mix is targeting 86 percent of its revenues from software and 14 percent from services. The new AspenTech will be headquartered in Bedford, Mass. and the current CEO of AspenTech, Antonio Pietri, will stay on to lead the new unit.

The Investor Presentation offered by the two companies is a 34-page behemoth that showcases the best parts of each company and the growth potential of this new AspenTech moving forward. Geological Simulation is currently operating in the Process realm, and OSI Inc. sits on the Power Transmission side of industry. AspenTech, according to the presentation, sits in a zone between these two companies with expertise in life sciences, metals and mining, food & beverage, and pulp & paper industries.

A chart showed Geological Simulation, OSI Inc and AspenTech on an Asset Lifecycle axis moving from Engineering/Modeling and Design, to Optimize Production and Operations, to Asset Performance Management. AspenTech already has software operating across the full life cycle and will supplement the current Emerson units that are residing only in the Design and Operations phases without any Asset Management components.

(Image source: Emerson.)

Emerson Presents AspenTech as a Partner in Sustainability

AspenTech was introduced as a comprehensive asset optimization software with approximately $720 million in revenue. The company has more than 2,400 total customers worldwide with solid representation of the 20 largest companies in the industries where Emerson operates. The acquisition was presented as a 100:1 value-to-cost ratio that will enhance Emerson’s sustainability goals, and the new company will push into the fields of digitalization, sustainability and end market dynamics.

Emerson also showed several examples of AspenTech meeting its customers’ sustainability goals, as well as a commitment to sustainable operations that will dovetail with Emerson’s existing purpose. Dow Chemical has used AspenTech’s DMC software to achieve $700 million in savings and reduce emissions by 80 percent over a nine-year energy project. Dow was also able to increase its energy efficiency by 9 percent across 15 of its worksites. A typical Emission Reduction project, the presentation notes, would give its customers a 30 percent carbon dioxide reduction, a 15 percent energy savings, and a 10 percent decrease in water usage.

This fits well with OSI’s work with the Salt River Project and the company’s monarch operational technology platform. monarch is an open system architecture built to work across several operating systems, databases, hardware and protocols. Salt River is using monarch as part of its goals to reduce carbon emissions by 65 percent by 2035 as it services more than two million customers. A typical OSI Grid Modernization project sees improvements in system resilience and efficiency and establishes distributed energy resources management system (DERMS).

Both companies have a carbon capture component to their business units. Aspen Plus Carbon Capture gives customers the ability to model an optimum energy usage for a location and then create a plan to move toward that ideal state. Carbon dioxide emissions can be calculated, monitored and reported to the Environmental Protection Agency (EPA) or tracked internally to help a company meet regulatory goals or its own internal benchmarks. Aspen Plus also helps a company to simulate the transformation of its carbon dioxide emissions to algae biomass or biofuel.

Emerson is using its AVENTICS pneumatic sensors and Internet of Things (IoT) software to reduce energy waste at Colgate’s packaging facilities. Starting with its toothpaste and toothbrush packaging lines, Colgate realized a 15 percent reduction in energy and expects more energy savings as the sensors and software are implemented across product lines and facilities. The project is part of Colgate’s goal to reach net zero carbon emissions by 2040.

The FP Corporation used AspenONE supply chain management software to boost its sustainability programs for the one billion plastic food containers that FP produces every month. In 2019 the implementation saved 160,000 metric tons of emissions and reduced landfill waste by 443,000 metric tons. Using circular economy principles and supply chain management software, the company was able to reduce its carbon emissions by 19 percent from the previous year.

Aspen sample models can optimize emissions tracking and carbon capture. (Image courtesy of AspenTech.)

Monica Schnitger discussed the merger at the Schnitger Corporation and her parting thought was that the acquisition is a good move. Emerson believes that bringing in a fully formed software company with strengths in areas where Emerson hasn’t worked previously is an excellent business proposition. Schnitger says that industrial companies buying software companies makes good sense. Creating a stronger software arm to build opportunities with Emerson’s hardware will give Emerson great incentive to keep AspenTech’s core business strong and vital. If a financial services firm had acquired AspenTech, the motivation for continued successes and business expansion might not be as strong. Emerson and AspenTech both issued press releases as well, presenting bright outlooks for the future of this newly formed unit.

Engineers watching this new AspenTech being formed can be comforted by a few things. Engineering and technology are valued more than ever in the markets right now. A commitment to optimization, innovation and using artificial intelligence to make the world a better place is evident in several news stories every week. This merger of two software branches will help the new company to create a more sustainable future with an eye on lowering carbon emissions and reducing its energy use.