Water Online

JUL 2017

Water Innovations gives Water and Wastewater Engineers and end-users a venue to find project solutions and source valuable product information. We aim to educate the engineering and operations community on important issues and trends.

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from these meters — if collected at all — needs to be managed and analyzed. This is where we see big improvements and opportunity. We are also seeing huge potential in two other areas: asset intelligence and leakage management. We predict that asset intelligence, including 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 $2.7 billion will be directed towards asset condition assessment and pipeline monitoring through 2026, according to our analysis. Given the state of municipal infrastructure, there is a wealth of low-hanging opportunities for improvements. At the same time, operating expenditures on leakage management will total $1 billion through 2025 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. Which companies or utilities are leading the charge? Smart water is bringing a wide range of new companies into the water industry from multiple sectors and value chain positions, which is fitting for an industry opening itself up to the massive potential. Seizing on this burgeoning demand for solutions is an outside group of venture-backed startups 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. These companies are not new to data and IoT, but many are new to the water industry. Since 2014, 42 acquisitions in smart water have exceeded $8.2 billion, reinforcing the growing confidence larger water companies are placing on water data and analytics as growth opportunities. We are seeing more diversified players like Honeywell, Trimble, and Xylem moving deeper into the sector. Early-adopting utilities, including American Water and East Bay Municipal Water District, are leading the shift towards smart water technology adoption. Market leaders, including Mueller and Itron, have moved downstream into communications, data management, and analytics, while recent market entries via acquisition will further reshape the competitive landscape. As a result, more than 40 companies in the U.S. 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. We can also look to Europe as a model. European utilities are really at the forefront in driving this space — in the areas of energy efficiency, smart meters, and leakage management. What hurdles does the water industry face in adopting smart water technologies? Culture. This is killer to innovation and improvements. For so long, out of sight, out of mind was the modus operandi for utility operators. Today, however, a combination of drought, water quality events in Flint and Pittsburgh, and customer expectations for real-time data and knowledge are increasing the demands on the utilities. The solutions are not new, and water utilities also face some of the hurdles that other industries are confronting when it comes to Big Data and IoT. They must address key questions such as who owns the data — the utility, the homeowner, or the technology provider? What defines a smart utility? Which of these startups will be around in the next three to five years? There are issues to be worked out, but we are not that far off from consumers being able to see water usage alongside electricity usage — all from their smartphones. What would you say to skeptics who say smart water is just a fad? I would say that just a few years ago there was only a handful of hardware players. But now the market looks entirely different. We are seeing larger, diversified companies enter the fray, utilities reshaping their mindset, and Silicon Valley applying data expertise. This combination has huge potential to change the way the U.S. water industry works. Smart water is a big deal for the water industry and is here to stay. On the one hand, we are grappling with age-old issues of water infrastructure, pipes over 100 years old. At the same time, there are major technological advances that could revolutionize the water sector. The bottom line is that the water industry has a huge need to be more efficient. And there are higher expectations than ever from customers that information networks be more sophisticated. I don't see any of this going away. If anything, there will be more players entering the market and more investment in this space. Where can our readers get more information on smart water? Bluefield provides data and analysis across global water markets, and smart water is a key area of focus for us. In April, we released a new report, US Smart Water: Defining the Opportunity, Competitive Landscape, and Market Outlook, which is available for purchase and download from our website (www.bluefieldresearch.com) n 18 wateronline.com n Water Innovations SMARTWATER The bottom line is that the water industry has a huge need to be more efficient. And there are higher expectations than ever from customers that information networks be more sophisticated. WILL MAIZE senior analyst, Bluefield

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