Q&A: Xylem CEO Patrick Decker on the Sensus acquisition

Q&A: Xylem CEO Patrick Decker on the Sensus acquisition

Find out how the Sensus network may be used to increase energy efficiency and prevent breakdowns in industries for water, wastewater and outdoor water. Xylem has announced plans to acquire Sensus, a leader in smart meters, network technologies and data analytics solutions. Patrick Decker, President and CEO of Xylem, explains how the Sensus acquisition would benefit Xylem customers.

Why did Xylem decide to acquire Sensus?

About a year ago, Xylem identified a few key areas that were priorities for the growth of the company. One of those areas was the need our customers have to make their water networks more intelligent. One of the opportunities we saw was to partner with or acquire a company like Sensus, which has a very strong telecommunications platform and a network of smart meters.

Sensus currently serves customers on what we call the clean water side, whereas we focus more on the wastewater network, as well as outdoor water, which includes lakes, rivers, dams, streams, ocean and coastal. Many Sensus customers, utility operators, already have FlexNet, which is the proprietary Sensus telecommunications network. These customers will, over time, be able to connect our wastewater pumps and networks into the system. They will also be able to move away from a lot of manual monitoring of their outdoor water systems.

The Sensus telecommunications platform is very strategic, as is their data analytics capability. They have a group of data scientists who are already providing simple user interfaces for Sensus customers. This enables them to mine the data that is being gathered off the FlexNet network for insights and ultimately solve various needs.

What kinds of customer needs does this help solve?

What Sensus does today is to provide a lot of important data for water utilities around things like non-revenue water. They’re able to help their customers identify leaks or breakdowns in their water systems. On the wastewater side, we will now be able to connect sensors on our pumps, and be able to gather data around energy efficiency and consumption, as well as data that will help us to provide predictive and preventative maintenance.

One of the greatest needs our customers have is managing their energy consumption. Energy consumption is one of the single largest operating costs for a water utility, and one of the biggest drivers of that energy consumption is the pumping station.

We are addressing this by building more energy-efficient pumps, like Flygt Concertor. This is the first wastewater pump on the market with integrated intelligence. Its built-in sensor automatically adjusts performance to actual conditions. With our equipment and the Sensus network, we will help customers gather data about their energy consumption across the network, and help them avoid unnecessary maintenance or breakdowns in pumping stations.

Will the data collected on wastewater networks be analyzed automatically?

That capability is being built as we speak. I would say that very few water utilities are actually that advanced right now, in terms of managing that kind of data. So what we are looking to do is build very simple user interfaces on tablets, smartphones, desktops, etc. One of the great things that Sensus brings with them is that they are already building that capability for the same water utilities, but focused on the clean water side of the network. We will be able to use this capability on the wastewater side with the same operators.

How will the Sensus acquisition benefit customers in the commercial building and industrial sectors?

Commercial building operators and industrial sites are also very focused on energy consumption. The pumps themselves are often the biggest source of energy consumption. We are still early on in thinking about how we could apply Sensus’ FlexNet capabilities in these sectors. We do think that there may be an opportunity for us to build our own proprietary technology in the same form to help building operators as well as industrial sites.

On the industrial side, the biggest opportunity for us is to move into more advanced industrial treatment capabilities. Much of the cost burden of water management is being shifted to industrial users, through increasing regulations on wastewater discharge from industrial sites. There is more demand on those industrial users to have their own embedded wastewater treatment capabilities.  We have some technologies there today, such as with our Wedeco brand. But we are also looking at how to build other capabilities, both organically and inorganically.

Sensus not only works with water utilities, but also electric and gas. Is that going to change with the Xylem acquisition?

No, this actually represents a great opportunity for Xylem. We are completely committed to the energy sector that Sensus is involved in, as well as their projects for building smart lighting networks for major cities. The whole move towards building smarter cities is a common theme. Even today, Xylem gets about 10 percent of our revenue from areas that are not in water, and I’ve said to investors regularly that I am not going to be dogmatic about that issue of water versus non-water. In fact, we have opportunities to invest and grow those pieces of the business, which are expanding quite rapidly.

Xylem has focused a lot on energy-efficient equipment. Is the Sensus acquisition part of a move towards looking at entire systems?

Yes, I think the opportunity for us here is to really leverage our core capability, which is in the actual equipment itself. From an R&D standpoint, that will continue to be a very strong core expertise for us. And we will continue to develop our portfolio around smart equipment.

What the Sensus acquisition does is allow us to focus on entire networks. This could be a wastewater pumping network, and all of the lift stations that exist around a city, or a clean water network that Sensus already helps manage. For outdoor water, this will give us the ability over time to be able to connect our sensors deployed in those areas, and gather data to the FlexNet network. This is going to be very powerful in helping utilities that have responsibility for that type of water. They will quickly be able to gather data about water quality that will help them meet environmental regulations.

by Chad Henderson