Eaton: Acquisition of Tripp Lite Strengthens Partnerships

EATON CHANNEL CONFERENCE — Earlier this year, power management company Eaton completed its acquisition of Tripp Lite. The deal meant Eaton not only bought its competitor, but that the Dublin, Ireland-based corporation would now be able to bring a broader range of these particular types of products to partners: single-phase uninterruptible power supply systems, rack power distribution units, surge protectors and enclosures for data centers. Eaton paid $1.65 billion for Tripp Lite.

The company is holding its 2022 channel conference in Fort Lauderdale, Florida this week. The theme, ‘Powering a Brighter Future,’ is in part to help partners navigate the changes due to the acquisition.

Graciano Beyhaut is commercial integration leader at Eaton. He said the integration of the companies is going faster than expected.

Eaton’s Graciano Beyhaut

“Usually, these projects are about two to two-and-a-half years long,” he said. “However, we’re about halfway through, and really it’s about driving synergies both from a sales and cost-target perspective.”

He added that Eaton has completed more than 100 integrations since the 2000s, so the company has a system in place that moves the process faster. All this speed means partners must catch up, something Eaton representatives say they are prepared to help them do.

Complementary Portfolios

Eaton’s Steven Loeb

“Things are moving very quickly, but we have team members who want us to succeed for our partners,” said Steven Loeb, vice president of distributed infrastructure sales at Eaton.

Loeb acknowledged one way Eaton has supported its partners, as well as the legacy partners from Tripp Lite, combining some sales and marketing resources to support them during the integration period. This is important, he said, because when the companies operated independently, their marketing campaigns had different strategies. In the past, Eaton took a somewhat regional approach to campaigns, whereas Tripp Lite focused heavily on national branding. Loeb said Eaton can now play to both strengths.

Also, in this integration period, Eaton is leaning heavily on its presales organization, comprised of 30 channel sales engineers. The team has doubled in size in recent months.

What’s also increased in size is the company’s portfolio and market share of core products. Eaton and Tripp Lite had complementary portfolios, go-to markets and partners. For instance, Tripp Lite did an “excellent job of attacking the SMB space” whereas Eaton tackled the “driving spec model,” Beyhaut said.

“And so, the opportunity here is to scale,” he said. “You know, both of us separately didn’t really have what the other had together. Now, we’re really able to leverage the scale and hopefully grow for our partner base.”

The Supply Chain

When it comes to scale, Eaton is building its largest warehouse in the United States outside of Chicago. Set to begin construction in the third quarter of this year, Eaton officials say it will house items the company will be able to source, despite global supply chain issues.

Hervé Tardy is vice president of marketing and strategy, critical power and digital infrastructure division at Eaton. He said the company has been fortunate not to be as hard hit by some of the supply-chain woes caused by the pandemic. The company’s products do not entirely come from China.

Eaton’s Hervé Tardy

“So, you know all the lockdown issues that we hear about right now in Shanghai? They’re not really impacting us,” said Tardy. “Most of our products are manufactured in the Philippines.”

For partners struggling to source products for their customers, this is welcome news.

That said, Tardy admitted that there’s no way to escape the supply chain concerns when 80% of the electronic components in the world are still being manufactured in China. Whereas some of Eaton’s products are assembled in the Philippines, components still travel there from China.

However difficult the supply chain may get, Tardy said Eaton will not sacrifice its commitment to the sustainable sourcing of materials.

“We’re working diligently to keep our sustainability targets despite all this. In the end, especially when you push a sustainability message, it’s all about trust. You want customers to trust your message. We are a very ethical company, and when we commit to something, we just do it.”