Two Companies, One Playbook: Turning Hardware Assets into Software Powerhouses

Over the past decade, Schneider Electric and Emerson, two of the world’s largest industrial technology firms, followed a remarkably similar path to build scaled software businesses — without starting from scratch.

The strategy: contribute assets, take a stake, then take control.

𝘚𝘵𝘦𝘱 1: 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘪𝘤 𝘈𝘴𝘴𝘦𝘵 𝘊𝘰𝘯𝘵𝘳𝘪𝘣𝘶𝘵𝘪𝘰𝘯

Each company began by contributing its industrial software divisions — visualization, control, and simulation — into a publicly traded software player.
This wasn’t a divestiture. It was a merger of convenience: the hardware group gained a foothold in software, while the target gained scale, capital, and customers.


𝘚𝘵𝘦𝘱 2: 𝘐𝘯𝘧𝘭𝘶𝘦𝘯𝘤𝘦 𝘛𝘩𝘳𝘰𝘶𝘨𝘩 𝘖𝘸𝘯𝘦𝘳𝘴𝘩𝘪𝘱

With roughly 55–60% ownership, the parent company gained governance control while keeping the software entity separate enough to grow independently.
It gave investors a pure-play software narrative — and the industrial parent time to mature its internal software DNA.


𝘚𝘵𝘦𝘱 3: 𝘍𝘶𝘭𝘭 𝘐𝘯𝘵𝘦𝘨𝘳𝘢𝘵𝘪𝘰𝘯

Once the software business had scaled, professionalized, and traded at a software multiple, the parent company moved to full ownership — bringing the software capability back into the group, now as a fully fledged SaaS business unit.

The Result:

👉 A controlled evolution from hardware-linked software to enterprise-scale SaaS — combining industrial domain expertise with software market agility.

The lesson:

In industrial tech, software transformation doesn’t have to be organic.

It can be architected — one equity transaction at a time.

This post was first published on LinkedIn in December 2025.