Proving the Business Case for the Internet of Things

Utilities expected to spend $37bn on customer analytics by 2023, says Navigant Research

Steve Rogerson
May 12, 2015
 
Utility customer information systems and analytics spending is expected to total nearly $37bn from 2014 to 2023, according to Navigant Research.
 
The report analyses the global market for billing and customer information systems (CISs) for electric utilities, including global market forecasts for CIS software purchases and upgrades, services, maintenance fees, software-as-a-service and analytics until 2023.
 
With a broad diversity of customer situations to account for, billing and customer care is often a complex issue for utilities. This, combined with a changing competitive landscape, increasing customer expectations, and a growing number of media for customer engagement, is expected to prompt many utilities to upgrade their CISs in the coming decade. According to the report, global spending on utility CISs and analytics is expected to total nearly $37bn from 2014 to 2023.
 
“Billing and customer information is at the heart of most businesses, but for the electric utility industry, changes in the market environment, the advent of distributed generation and smart grid technologies, as well as energy efficiency mandates and deregulation, have converged to place growing strains on legacy systems,” said Richelle Elberg, principal research analyst with Navigant Research. “Add in utilities’ increasing needs for effective customer engagement and the desire for integration with digital platforms, such as mobile devices, web portals and social media, and utilities face a perfect storm of new requirements for billing and CISs.”
 
While these factors might indicate to some that a vigorous upgrade market for modern CISs is on the horizon, the push and pull of new demands versus cost and risk have resulted in a relatively flat market in recent years. According to the report, though, the market’s dynamics are expected to continue to evolve, and Navigant Research expects accelerating growth in CISs and related services later this decade, particularly in North America and Europe.
 
The report provides an analysis of market drivers, challenges, and trends related to the adoption of off-the-shelf CISs and managed services for billing, customer engagement and related analytics. Global market forecasts for CIS software purchases and upgrades, services, maintenance fees, SaaS and analytics extend to 2023. The report also reviews the key technologies related to billing and CISs and provides profiles of dominant vendors for different regions, product offerings and utility types.
 
• The Americas held the largest smart meter market share of 41 per cent in 2013, according to a report from Markets & Markets. In North America, the USA is the largest market and is expected to continue its dominance in the smart meters industry.
 
The country is currently focusing on upgrading and replacing aging infrastructure, improving grid reliability, and enabling smarter power networks. Increasing demand for smart meters in North America is highly attributed to government initiatives, which comprise allocating funds and making smart meters mandatory in a number of states such as California and Texas.
 
AEP, PG&E, Southern California Edison, Southern Company, Florida Power & Light and Oncor are some of the largest utility groups having committed to full-scale rollouts of smart meters to all their customers.
 
Leading players of this industry include Itron (USA), Elster Group (Germany), Landis & Gyr (Switzerland), Siemens (Germany), Schneider Electric (France), Badger Meter (USA), Circuator (Spain), EDMI (Singapore), Holley Metering (China), Honeywell (USA), ICSA (India), Neptune Technology Group (USA) and Sensus (USA).