Convergence of Water and Data Drives $20B U.S. Smart Water Forecast

5 May 2017  |  Eric Bindler

The U.S. municipal water sector, which has traditionally been slow to adopt new technologies, sits at the cusp of change, with over $20 billion of forecasted spending over the next decade. As a result, companies across the value chain 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. Bluefield´s new report U.S. Smart Water: Defining the Opportunity, Competitive Landscape, and Market Outlook, addresses key questions around smart water in the U.S.

What is driving smart water adoption in the U.S.? As water scarcity and subsequent water conservation efforts apply downward pressure on utilities volume-based revenues, and deteriorating infrastructure and mounting environmental regulations pace increasing demands on operating budgets, utilities are turning to alternative methods to improve operational efficiency and find unaccounted for revenue. Water scarcity events have also influenced the development of nascent state-driven regulation targeting water loss. From within these states, early-adopting utilities, including American Water and East Bay Municipal Water District, are leading the shift towards smart water technology adoption.

What does the competitive landscape look like? Smart water has garnered the attention of a wide range of companies, from diversified water players to innovative start-ups. At the core, a 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 also expanding into leak detection and pipeline monitoring. Recent market consolidation, highlighted by Xylem´s acquisitions of Sensus and Visenti in 2016, is reshaping the competitive landscape, which should accelerate as data and analytics companies establish utility track-records across the U.S. Our report profiles over 40 of the leading smart water players in the U.S. market, and offers insights into sector M&A and funding trends.

What are the trending segments in U.S. smart water? Often the first step in the utilities smart water journey in the U.S., smart water meters (e.g. AMR, AMI) will continue to represent the lion´s share of forecasted expenditures at 82% from 2017 through 2026. Asset intelligence– pipeline monitoring, asset condition inspections, and asset management– will emerge as a key smart water segment as utilities seek efficiency under mounting pressure of operating and capital replacement budget stress. Over US$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 as smart solutions for leakage management, driven by fixed-network acoustic technologies, satellite leak detection, and improved real-time network intelligence, capture increased market share.

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