From products to solutions – Ensuring compatibility
Thomas S. Gross, Chief Operating Officer, Eaton
Thomas Gross, Chief Operating Officer of Eaton, one of the largest power management companies globally, explains why most of the major global challenges, and the markets that emerge around them, depend directly on the ability to connect solutions from different suppliers. The transition from products to total solutions requires interoperability and other standards. Eaton wants to be a leader in these transformations. That’s why Eaton and, for that matter hundreds of other companies work in the IEC and sit at the table where the rules for global trade are written. They understand that leaving this up to the competition would jeopardize their company’s future.
Thomas S. Gross, Chief Operating Officer, Eaton
Why is it important that products from different manufacturers are able to connect?
Gross: We believe electrical energy will continue to rise as a percentage of total energy. The demand for electricity is growing rapidly. The infrastructure to create that electrical energy, and then of course distribute it to the eventual final usage points will get more and more elaborate.
No one company, not even Eaton, has everything to get electricity from the point where it’s produced to the points where it's used. Interoperability standards are absolutely critical from any perspective; because if the solutions, products and information systems of different suppliers don’t connect easily, the market will be impeded.
Active participation in the standard development has a cost; how does Eaton justify this investment?
Gross: Eaton considers standards as a strategic element of our business and for the entire industry. We view IEC as the most global standards body that's available for us to work through. This particular aspect is so important because we can't have country specific standards in the future. The cost of that is too high. We have to move to a much more global set of standards so that we, as suppliers, and our customers around the world can easily take advantage of all kinds of technology and the lowering of costs that standards can produce.
There is an enormous opportunity to increase the efficiency of electricity generation and of individual devices such as light bulbs, motors or cooling systems. We think that the world is going to spend an awful lot of time and money on the infrastructure associated with electricity between now and the year 2030.
Standards play a critical role and they really make markets. That’s why Eaton’s involvement with IEC is extensive. We expect over time it will be even larger because we think IEC will play an even larger role in important things like the smart grid and the security around it.
We are in our 100th year of existence as a corporation. Doing business right is just such a critical aspect of longevity in our opinion. When you're 100 years old, you certainly start taking a longer-term view of your company.
Do you think International Standards will increase in importance?
Gross: Standards will unify over time, there is no question in my mind about that. And they will have a profound impact not just on the way we technically approach the design of products and how they connect; they’ll also have a profound impact on marketing activities and all kinds of ways in which we’ll deploy full and partial solutions in the future.
Involvement in international standardization is, in my opinion, one of the best investments a company can make, whether it's a small, focused company or a very large, wide company. We will all be powerfully influenced by international standards in the future; it’s already happening today, but certainly it will just be more so in the future.
I don't think we’ll standardize everything in the electrical industry. So I think it’s best to think of it as the logical places where things need to connect, communicate and work together. And those are the focus points for IEC.
How many Eaton experts are involved in standardization work in the IEC?
Gross: There are hundreds of people involved in the IEC, most of them part-time. That’s how it should be, because we want our best and brightest scientists, marketing and business people to participate and share their expertise. I haven’t taken the time to add it up but it wouldn't surprise me if the number was somewhere around 400 or 500 people that are heavily involved in some aspect of IEC and other standards.
Our industry, and other industries, are right now going through a transition from products to total solutions, and from hardware to software solutions. The IEC is right in the middle of all of that. And that’s why we participate actively.
With historic differences in terms of voltage, plugs and sockets, etc., how real is globalization in your industry, for your company?
Gross: On the one hand we are seeing a surprising consistency around the world in and around the need to evolve electrical and power infrastructures. And I think everywhere you go you see the same types of concerns and opportunities. It's clear that power will become scarcer over time, it will become more expensive and the need for more efficiency and a lower impact on the environment is just going to increase. And that is true everywhere in the world almost without exception. IEC International Standards are widely used in our industry. We can develop a solution to a problem and we in general terms are able to market that everywhere in the world.
Of course there are some nuances and sometimes standards are unfortunately still different; but in general everybody wants better heating, ventilating, air conditioning, all kinds of things that are incredibly similar. So we view that as a very good thing and it certainly helps our company to globalise.
It seems that the focus on electricity is increasing. Why is that?
Gross: A day without electricity, even an hour without electricity is scary for most people. I think in the future it will be even more difficult to imagine life without electricity. Many people in developing countries are transitioning into middle class, and one of the first things they want is more electricity so that they can have refrigeration and other devices that will create a better standard of living for them. At the same time technologies are going through a major overhaul: we’re moving from individual products to systems that have to improve efficiency by an order of magnitude. All of this creates a terrific opportunity and a crushing need for standardization to enable those markets, those changes to occur. Eaton wants to be a clear leader in all of those transformations. As an industry we have an enormous responsibility to keep the lights on.