Bluefield Research attended this year’s London gathering of the World Water Techconference series with guarded optimism. The incoming US administration promises a boost in infrastructure spending, commodities prices are rebounding to support water infrastructure investments, a plethora of new technology solutions are gaining traction, and panelists captured the water industry’s desire to see greater collaboration on a number of issues. Three takeaways from the conference suggest we’re not necessarily on the cusp of a digital revolution in water, but the industry is adapting to the current market reality:
Takeaway #1: Keep Your Eye on The Picks and Shovels
Fathom’s CEO underlined the fact that profit gains for municipal water utilities need to be found ‘in the margins’ – that is to say, tackling inefficiencies of existing operations. Raising tariffs is often a non-starter, and making major capital investments is equally challenging. Fathom has targeted billing as one of those areas for optimization, but there are several others including leakage reduction and energy efficiency. And it’s not only the solution being offered, but how it is presented – especially performance based. Vendors with solutions that have a clear story on monetizing results, working within existing siloes, are gaining more traction that can lead to larger system improvements later on.
Takeaway #2: Municipal Utilities Continue to DRIP
‘Data Rich – Information Poor’ (DRIP) rang true in several discussions. Panelists pointed out that 30-40% of the industry still works on antiquated software like DOS, or excel spreadsheets. Often when projects start, utilities are keen to show what data they have, but are unable to sketch out how the data is used. Data management issues range from standardized names for different assets, to simply enabling multi-user access on antiquated systems such as COBOL deployed in the 1970s. But before tossing the system out the door and selling a new one, the recurring theme was to ask: What do we need this for? What is the specific outcome we want to achieve by creating this data feed? Although utilities may be biding their time for IoT to become more mainstream, with common communications protocols, even when it’s mature they will still need to focus carefully on a clear purpose for data capture to turn it into useful information–and vendors have a key role to play in setting them up for leveraging that data.
Takeaway #3: Industry-Municipal Water Symbiosis on the Rise
Water scarcity and commodities price drops in the past couple years has obligated industries to become more efficient. Discussion, led by Resonance Asset Management, about integrated catchment management confirmed there is much to be done to get municipalities and industries on the same page, but there are some positive signs. Bluefield Research is particularly keen to see more outsourced infrastructure for industries grappling with water issues – whether it’s fracking wastewater treatment in the US, a multi-mine desalination plant, or jointly funded conveyance projects.
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Keith Hays is Vice President and co-founder of Bluefield Research, a market research and insight firm focused exclusively on supporting companies addressing opportunities in water. Bluefield has individual reports on US water utility strategies and CAPEX forecasts, municipal wastewater and reuse trends, and investor-owned utility market trends.