Report: Utilities to Increase Investment in Smart Water Technologies

According to a new report, “US Smart Water: Defining the Opportunity, Competitive Landscape, and Market Outlook,”  from Bluefield Research, the U.S. municipal water sector is projected to spend more than $20 billion on software, data, and analytics solutions over the next decade. As a result, more than 40 companies are positioning to deploy state-of-the-art solutions to enable more advanced levels of system intelligence, real-time network visibility, energy efficiency, and customer management.

“Historically, utilities have been hobbled by their inability to generate actionable insights from disparate network and water usage data, but this is changing with more advanced data management and cloud-based solutions,” says Will Maize, a Senior Analyst at Bluefield Research. “Early adopting utilities, including American Water and East Bay Municipal Water District, are leading the shift towards smart water technology adoption.”

A number of factors, including state legislation for water loss, aging infrastructure, and pressure on utilities to be more efficient, are driving interest in smart water technologies.

In the near-term, advanced water meters will represent the majority of forecasted expenditures at 82% from 2017 through 2026. A consolidated group of established metering players are expanding their product and service portfolios to leverage the value of data collected through their installed hardware. Market leaders, including Mueller and Itron, have moved downstream into communications, data management and analytics, while recent market entries via acquisition by Xylem and Honeywell will further reshape the competitive landscape.

Exhibit: US Smart Water Forecasts

Source: Bluefield Research

At the same time, more than $2.7 billion will be directed towards asset condition assessment and pipeline monitoring through 2026. Operating expenditures on leakage management will total $1 billion through the forecast period.

While smart meters garnered the most attention, asset intelligence and visibility into real-time network conditions also are expected to offer significant benefits.

Seizing on this burgeoning demand for solutions is an outside group of venture-backed start-ups seeking to leverage their data expertise, much of which draws from other industry applications. These data and analytics companies are looking to integrate disparate sources of data to optimize networks, track water quality, and generate insights for asset performance management. Their primary challenge, however, will be overcoming a credibility gap with demonstrated pilot projects and buy-in from municipal utilities. A select group of companies from more mature smart water markets, Europe and Israel, are also beginning to make headway in the U.S. market.

Exhibit: US Smart Water Value Chain 

Source: Bluefield Research

Making inroads into 50,000 U.S. municipal water systems is no small task for vendors, particularly the new entrants without proven track records. The challenge is further heightened by their need to navigate utilities’ operating silos- back office operations, billing and revenues, and network operations.

“The market is already beginning to take on a different shape,” added Maize. “We are seeing larger, diversified companies enter the fray, utilities reshaping their mindset, and Silicon Valley-types applying data expertise.  This combination has huge potential to change the way the U.S. water industry works. If you looked at the smart water market a few years ago, there were just a handful players.”

Related News

From Archive

• Most Read
• Most Commented