GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE (GLOBAL) JANUARY 2013

Transcription

1 GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE (GLOBAL) JANUARY 2013 Verdantix Ltd Reproduction Prohibited.

2 GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE (GLOBAL) January 2013 EXECUTIVE SUMMARY Licensed Content This report provides a detailed comparison of 14 enterprise energy management software applications to help corporate buyers save time, reduce costs and mitigate risks when selecting products and suppliers. Based on the proprietary Verdantix Green Quadrant methodology, the analysis combines benchmark data from 14 live product demonstrations, responses to a 134 point questionnaire and interviews with an independent panel of 15 customers across 13 industries who have bought, or are planning to buy, energy management software. The study finds that customers requirements are continuing to increase in complexity and five suppliers currently lead the enterprise energy management software market. When selecting an application, buyers should focus on the value delivered by the software and supporting energy services. Successful implementations usually occur when suppliers design software for a specific energy domain, such as data centres, grocery retail or commercial offices, with the facilities owned by the customer. TABLE OF CONTENTS THE STATE OF THE ENERGY MANAGEMENT SOFTWARE MARKET Software Continues To Drive The Uptake Of Enterprise Energy Management BUYERS INCREASE SPENDING FOR APPS THAT OPTIMIZE ENERGY PERFORMANCE Energy Decision-Makers Have To Manage Energy Costs And Increased Volumes Of Energy Data Buyers Scale Up Investments In Energy Management Software Requirements Increase As Buyers Move From Measuring To Managing Energy Buyers Are Still Searching For Higher Levels Of Sophistication In Data Analytics Suppliers Must Demonstrate Scale, Integration And Domain Expertise To Win Buyer Confidence Buyers Prefer Suppliers With In-House Energy Expertise For Software Implementation GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Green Quadrant Methodology Evaluated Suppliers: Selection Criteria Evaluation Criteria For Energy Management Software CA Technologies, IBM and Schneider Electric Set The Bar High For Energy Management Software 2013 Verdantix Ltd. All Rights Reserved. Verdantix, Green Quadrant, Total Portfolio and Critical Moments are trademarks of Verdantix Ltd. All other trademarks are the property of their respective companies. Verdantix clients may make one attributed copy of each figure or paragraph contained herein. Additional reproduction is strictly prohibited. Verdantix Ltd Reproduction Prohibited. 2

3 Five Suppliers Emerge As Serious Contenders Six Suppliers Offer Targeted Energy Domain Expertise USER REQUIREMENTS SHOULD DRIVE SOFTWARE PURCHASE DECISIONS TABLE OF FIGURES Figure 1. Three Phases Of Energy Management Software Market Development Figure 2. Ranking Of Business Drivers For Purchasing Energy Management Software Figure 3. Priority Energy Management Initiatives Over The Next Two Years Figure 4. Annual Change In Spend On Energy Management Software By 2015 Figure 5. Functionality Requirements For Energy Management Software Figure 6. Important Attributes Of Energy Management Software Suppliers Figure 7. Preferences For Different Types Of Software Suppliers Figure 8. Preferences For Different Types Of Implementation Services Providers Figure 9. List Of The Suppliers And Software Assessed Figure Capabilities Criteria For Energy Management Software Suppliers Figure Capabilities Criteria For Energy Management Software Suppliers Figure 11. Momentum Criteria For Energy Management Software Suppliers Figure 12. Green Quadrant Energy Management Software Figure Capability Scores For 14 Energy Management Software Suppliers Figure Capability Scores For 14 Energy Management Software Suppliers Figure 14. Momentum Scores For 14 Energy Management Software Suppliers ORGANIZATIONS MENTIONED 1E, 4tell, ABB, Accenture, AkzoNobel, Alstom, Asda, AspenTech, Atos, Avaya, Building Automation Solutions, Bloomberg, BuildingIQ, C3, CA Technologies, Calico Energy, Capgemini, Carbon Disclosure Project, CarbonSystems, Cenovus Energy, CH2M HILL, Cisco, City of Des Moines, CloudApps, Coles, Colliers International, Cooper Industries, Costco, CRedit360, Dell, Deloitte, Deutsche Telekom, Dow Chemical, Eaton, ebay, Ecova, Elster EnergyICT, Emerson, Enablon, Energenz, Energy Advantage, Energy And Technical Services, Energy Metering Technology, Energy Quote JHA, Energy Solutions Group, EnergyCAP, EnergyPrint, EnerNOC, EnTech USB, Enviance, ENXSuite, ERM, esight Energy, ESS, Faronics, Fellon-McCord, FirstCarbon Solutions, GameStop, GE, GridPoint, Hara, Hasbro, Honeywell, HP, Husky Energy, IBM, ICF International, ICIS, Iconics, IHS, Infor, Infosys, InStep Software, Interval Data Systems, IMServ, Johnson Controls, Jones Lang LaSalle, JouleX, Locus Technologies, Logica, M&C Energy Group, Matrix, Microsoft, MicroStrategy, Noesis Energy, Novar, Noveda Technologies, Optima Energy Management, Optimal Energy Solutions, Oracle, Orange, OSIsoft, Pace Global, PE International, Phoenix Energy Technologies, Powerit Solutions, ProcessMAP, Pulse Energy, QAS, Raritan, Retroficiency, Rockwell Automation, RSMeans, Sacramento Municipal Utility District, Safeway, Sainsbury's, SAP, SAS, Scanenergi, Schneider Electric, SCIenergy, SEDAC Energy Management, Sentilla, Serious Energy, Siemens, smeasure, Spectra Energy, Stark, StratITsphere, Summit Energy, Sustainable Real Estate Solutions, Swisscom, Target, TEAM, Tesco, Trendpoint, Tridium, TRIRIGA, URS Corporation, US Air Force, US Bank, US Department of Defense, US General Services Administration, Utilyx, Valero, Verco, Verdiem, Verisae, Verismic, Vizelia, Vodafone, Walmart, Wipro EcoEnergy 2013 Verdantix Ltd. All Rights Reserved. Verdantix, Green Quadrant, Total Portfolio and Critical Moments are trademarks of Verdantix Ltd. All other trademarks are the property of their respective companies. Verdantix clients may make one attributed copy of each figure or paragraph contained herein. Additional reproduction is strictly prohibited. Verdantix Ltd Reproduction Prohibited. 3

4 GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Many large firms have launched a strategic energy management programme to better manage growing energy costs, mitigate security of supply risks and benefit from the potential of decentralized electricity generation as well as renewable energy technologies. A more strategic approach to energy management means elevating policies and investments to the level of the CEO and CFO. Coordinating this programme requires enterprise-wide data held in a single system of record that permits timely analysis and reporting. Buyers in this market face a diverse range of software suppliers spanning enterprise software providers, equipment and controls firms, energy consultants and services firms. To help buyers save time and money in the software selection process, as well as reduce risk in purchase decisions, Verdantix conducted an independent, fact-based analysis of the 14 enterprise energy management software suppliers with the strongest claims to support global deployments. THE STATE OF THE ENERGY MANAGEMENT SOFTWARE MARKET This report helps senior executives and decision-makers across all industries to select a software provider to help them manage their firm s energy supply, consumption and cost from the facility to the enterprise level. These roles include Chief Sustainability Officers, CFOs, Directors of Energy and Facilities and Heads of Procurement. Key questions include: Which software applications are available in the market today to help achieve my firm s energy-related business objectives? Which energy management software applications are best suited to my firm s facility portfolio? Which suppliers lead the market for enterprise energy management software? What criteria should I use to shortlist suppliers of enterprise energy management software? To answer these questions, Verdantix interviewed an independent customer panel composed of 15 current or potential users of enterprise energy management software, representing firms with combined revenues of $340 billion. For the software application analysis, we interviewed 14 suppliers, conducted 14 live product demonstrations, and collected comprehensive product and company data on 134 criteria via a questionnaire. The resulting analysis is based on the proprietary Verdantix Green Quadrant methodology designed to provide an evidence-based, objective assessment of suppliers providing comparable products or services. Software Continues To Drive The Uptake Of Enterprise Energy Management The enterprise energy management software market follows the typical trajectory of all new categories of enterprise software: growth, consolidation and maturity. The market s development can be characterized as follows (see Figure 1): Proliferation of tactical energy management software from the 1990s. For many years energy software deployments focused on a single site or a single energy domain as Verdantix Ltd Reproduction Prohibited. 4

5 CUSTOMER SUPPLIER VERDANTIX GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Figure 1. Three Phases Of Energy Management Software Market Development Number of Suppliers Rapid growth of site level applications Arrival of enterprise-scale applications Consolidated market combined with niche solutions Software Domain Focus Energy domain specific One to two energy domains Energy systems Services None Offered through partner network Full in-house energy services capabilities Buying Role Site manager Head of energy, head of facilities or head of property Corporate executive Purchase Drivers Data aggregation and consolidation Cost reduction and energy efficiency Project, portfolio and strategic risk management Deployment Scale Site, plant, national Business unit, international Enterprise Source: Verdantix energy management was devolved to the plant manager or building manager. In each industry, suppliers such as EnTech USB and Optimal Energy Solutions offered applications for monitoring and targeting, and data management. These applications were offered with client/server architectures that could scale up to users at a single site, but were not designed for enterprise deployment. The value proposition for the software was tied to data collection, processing and back-office bill validation services. Many suppliers were not software specialists. Arrival of enterprise-scale apps responding to strategic energy management. As firms started to move towards multi-site implementations, a new software category emerged. The key elements of enterprise scalability include software-as-a-service (SaaS) architecture or web-based access, flexible organizational hierarchy designs and open application programme interfaces (APIs). These applications allow users to drill down from a corporate-wide view of energy information into specific geographies, business Verdantix Ltd Reproduction Prohibited. 5

6 lines or asset categories. In 2008 and 2009, 40 energy management software apps were launched into the global market (see Verdantix Buyers Guide To Energy Management Software). Entrants such as C3 and Hara now aim value propositions at CFOs and line-ofbusiness managers, as well as facilities and operation managers. The focus for the software is on large-scale energy efficiency savings, enhanced security of supply over the next 10 years, and a more accurate data set for energy consumption and GHG reporting and reductions. Maturing market through acquisition. Diverse suppliers, spanning energy services providers, equipment and controls suppliers and ICT providers, are acquiring specialist expertise to enhance their technology capabilities, broaden energy domain focus and gain market share before a global shakeout begins. During 2011 market consolidation began with IBM acquiring TRIRIGA, Schneider Electric acquiring Summit Energy, Infor acquiring ENXSuite and Siemens acquiring Pace Global (see Verdantix Software Acquisitions Provide Boost To Energy Services). Enterprise energy management software is evolving to serve as the integration platform for end-point energy devices, monitoring and control systems and external content feeds such as utility bills and energy price data. Expansion into platform-based energy services. Energy management will continue its migration from a tactical to strategic approach as firms raise governance to a global level, make decisions centrally, gain greater control over energy management processes and invest in on-site generation. The scale and complexity will shift from individual energy domains data centres or retail stores for example to integrated energy systems (see Verdantix The Future Of Energy Management). Firms will lack the in-house teams with an appropriate set of skills to manage the energy system, so they will turn to suppliers to provide end-to-end energy management. Enterprise energy management software will evolve to serve as a platform for energy integration, energy intelligence and energy services. Leading suppliers will integrate software and services to become a platform-based energy services provider that can cater for a firm s end-to-end energy requirements, from energy procurement and on-site generation to private smart grid and demand-side management. BUYERS INCREASE SPENDING FOR APPS THAT OPTIMIZE ENERGY PERFORMANCE Long-standing suppliers and new entrants are now developing capabilities to respond to firms ever-growing requirements to manage, report and optimize their energy performance. To drill down into purchase preferences and functionality requirements for energy management software, Verdantix interviewed an independent panel of budget holders in 15 global firms with over $1 billion in revenue. The firms were located in Africa, Canada, Mexico, Netherlands, the UK and the US, and represented 13 industries: automotive, banking, business services, chemicals, food and beverage, industrial engineering, media, personal and household, pharma and medical, public sector, retail, technology and telecommunications. Within these firms we spoke with decision-makers in roles such as Global Head of Sustainability, Director of Sustainable Operations and Director for Energy and Carbon Programmes. Verdantix Ltd Reproduction Prohibited. 6

7 Figure 2. Ranking Of Business Drivers For Purchasing Energy Management Software What are the business drivers for purchasing energy management software? Cost savings 6 Energy targets Financial data tracking Carbon management Reporting Increased visibility Environmental impact Project analysis Data normalization Regulatory compliance Data consolidation Time savings 40% 33% 2 2 Source: Verdantix N=15 Energy Decision-Makers Have To Manage Energy Costs And Increased Volumes Of Energy Data Verdantix asked respondents in the customer panel to characterize their firms energy programmes to better understand the drivers for enterprise energy management software investment. We heard that senior managers responsible for energy management decisionmaking: Implement energy management software today. Twelve members of the 15-strong customer panel have already purchased software to manage energy consumption. Verdantix analysis heard that only seven of these deployments cover more than 100 sites and more than one energy domain, with three firms having deployed energy management software across more than 8,000 sites. The three respondents that have not implemented energy management software are still using spreadsheets to monitor energy consumption. "We have now implemented energy management software within our office and retail sites in North America. The ROI that has been achieved exceeded expectations and we are now looking to implement the solution across our sites in Europe and China." (Personal and household firm) Identify cost savings as the number one purchase driver. Ten of the 15 panellists indicated that the ability to identify cost savings topped the list of reasons to purchase energy management software (see Figure 2). Six firms consider the ability to set and Verdantix Ltd Reproduction Prohibited. 7

8 Figure 3. Priority Energy Management Initiatives Over The Next Two Years What are your firm's top energy management initiatives over the next two years? Equipment replacement Data analysis 4 4 Building controls 33% On-site renewable energy 2 Smart meters Strategic planning Software implementation Employee behaviour change Carbon and energy reporting Energy consuming asset maintenance Supply chain Source: Verdantix N=15 track energy targets to be a significant driver, while five firms mentioned financial data tracking as a considerable driver. Financial benefits are the main driving force for us at the moment; we want to do the right thing but we need a favourable return on our investments. We need to verify claimed savings by ensuring we have metering data from before and after changes are made to form a true picture of the economic impact. (Chemicals firm) Prioritize energy efficient equipment and energy data analysis. Seven of the members of the customer panel listed increased energy data analytics and upgrading inefficient legacy equipment in their top three energy management initiatives for the next two years (see Figure 3). Verdantix research shows that 28% of firms energy management spend in 2012 will be on equipment (see Verdantix Energy Leaders Survey 2012: Budgets and Priorities). In December 2011 the US Department of Defense awarded Johnson Controls a $34 million energy services performance contract that will cover the installation of wind and solar photovoltaic systems, LED lighting, energy management control systems and other energy conservation equipment over 16 years (see Verdantix US Department Of Defense Deploys Energy Management At Scale). We are looking to upgrade a lot of our legacy equipment within our manufacturing facilities. We have identified the big spenders and are now replacing these with new energy efficient versions. We replaced a legacy oven with a purpose built version that uses 50% less gas; we are also looking at installing CHP. (Industrial engineering firm) Verdantix Ltd Reproduction Prohibited. 8

9 Figure 4. Annual Change In Spend On Energy Management Software By 2015 How much do you expect your firm's year-on-year spend on energy management software to change over the next three years? Increase by more than 25% Increase up to 25% Stay the same Decrease up to 25% Decrease by more than 25% 4 Source: Verdantix N=15 Buyers Scale Up Investments In Energy Management Software Potential cost savings achieved through improvements in energy management drive firms to invest in software. To analyse purchasing trends, Verdantix asked the customer panel to describe its spending on energy management software. Verdantix heard that: Software price tags vary significantly. When asked how much their firm has spent on energy management software over the past three years, responses from the customer panel ranged from $50,000 to over $5 million. Firms that have already implemented energy management software attribute the majority of spending to licensing and hosting fees that are proportional to the scale of the deployment. Firms in the early stages of deployment attribute the greatest proportion of costs to software implementation and consulting services. We had significant upfront costs during implementation. Going forward we now only have licensing fees to pay. (Telecommunications firm) Most firms will increase spend on energy management software over the next three years. Two thirds of respondents expect spend on energy management software to increase on an annual basis through to 2015, with a fifth saying it will increase by more than 25% (see Figure 4). Respondents expecting spend to increase are about to implement a new solution or are in the process of rolling-out a solution across more of their facilities. Only of customer panel respondents expect spend on energy Verdantix Ltd Reproduction Prohibited. 9

10 management software to decrease. Firms that expect spend to decrease are those that have just finished implementing a new solution and have no plans in place to increase functionality or scope during the next three years. Firms already in a multi-year contract with an energy management software provider expect spend to stay the same as annual licensing fees account for the majority of their spend. We feel as if we have finally turned the corner, with key senior executives beginning to understand that there may be more value to energy management than previously thought. Our investment in active energy management is anticipated to increase, especially as we build new data centres. (Telecommunications firm) Requirements Increase As Buyers Move From Measuring To Managing Energy Two thirds of customer panel respondents expect their annual spend on energy management software to increase during the next three years as they implement new solutions, roll out existing solutions on a larger scale, or increase the functionality of existing solutions. When questioned on what energy management functionality customers require, Verdantix heard that (see Figure 5): Utility bill management has risen to the top of the priority list. Twelve out of 15 customer panel respondents require utility bill management tools. This category of functionality includes energy supplier management, utility account tracking, utility bill validation, utility bill accruals, multi-tenant billing, energy rebate validation and chargebacks. For example, US video game retailer GameStop selected Ecova s Utility Expense And Data Management platform to manage its 12,000 utility accounts in 2008, and after just one year projected ongoing annual savings of $734,000. We have come to the realization that utilities are the biggest expense for our group - to get better data on this and begin to reduce our expenses is a high priority for us. (Bank) Monitoring and targeting is essential. The entire customer panel said that they require or desire energy monitoring and targeting tools. This category of functionality includes target setting and tracking, trend analysis and forecasting, facilities benchmarking and identification of energy efficiency opportunities. In May 2012, the US General Services Administration selected IBM TRIRIGA to monitor the energy consumption of more than 32 million square feet of real estate, to help it meet its goal of reducing energy consumption in federal buildings by 30% by You can't manage what you can't see; we spend 300 million ($486 million) on utilities in the UK alone. (Retail) Reporting and certification are sought after. Eleven members of the customer panel require energy reporting and certification functionality from energy management software applications. Linked to this, nine require carbon reporting and certification tools for emissions disclosure to organizations such as the Carbon Disclosure Project. This category of functionality includes configurable reporting along with mandatory and voluntary reporting. IT services firm Capgemini states that CA Technologies CA ecosoftware has reduced the costs associated with creating reports by approximately 30%. Verdantix Ltd Reproduction Prohibited. 10

11 Figure 5. Functionality Requirements For Energy Management Software To what extent do you require the following energy management software functionality? Utility bill management 80% Energy monitoring and targeting 73% 2 Energy reporting and certification 73% Energy asset management 6 2 Energy project and portfolio management 60% 2 Carbon reporting and certification 60% Energy procurement and risk management 40% 40% Required Desirable Not Required Undecided Note: data labels are rounded to zero decimal places so may not sum to 100% Source: Verdantix N=15 The approaching nexus of financial, sustainability, and energy reporting is going to have a big impact on our energy management software requirements over the next 12 months. We will need to be able to report energy performance with the same frequency and accuracy as we do financial data. (Personal and household firm) Requirements for energy asset management vary by energy domain. Ten of the respondents said that their firm requires energy asset management functionality; one said it is desirable and the remaining four said it is not required. Verdantix heard that this functionality is attractive to industries such as automotive and manufacturing as they operate a large number of high energy-consuming assets. This category includes control of energy consuming and generating assets, maintenance scheduling, condition assessment, demand response and problem diagnosis. Monitoring the condition of equipment and calculating when it is better to maintain or replace assets results in significant cost savings. For example, the City of Des Moines implemented Infor10 EAM within its waste water facilities in January After only six months it had reduced energy consumption by 100 GWh with annual savings of $200,000. I am looking for greater intelligence around energy efficiency identification. I want energy management software to identify/predict when an asset is operating at non-optimal capacity. (Telecommunications firm) Project and portfolio management is desirable. Nine members of the customer panel require project and portfolio management functionality from energy management Verdantix Ltd Reproduction Prohibited. 11

12 software applications. A further four said this functionality would be useful for on-going energy efficiency or energy generation projects, but is not immediately required. This category of functionality includes equipment selection, project planning and analysis, and portfolio planning and analysis. We knew we were about to implement a number of energy efficiency projects and wanted to verify the results independent of weather conditions. (Public sector) Requirements for energy procurement depend on existing arrangements with specialists. Six members of the customer panel said that they require energy procurements tools; another six said that this functionality is not required. This category of functionality includes procurement process management, tariff and cost analysis, risk management and scenario planning. The split in opinion as to whether or not this functionality is required depends on whether or not firms already cater for this either through their own finance and procurement teams or outsourced specialists such as M&C Energy Group and Utilyx. We have a specialist supplier that takes care of utility bill management and procurement for our firm. It does not have good reporting and project analysis capabilities so we have also invested in energy management software. It would be too much upheaval to transfer everything into the one system and we do not see it as being necessary. (Pharmaceutical firm) Buyers Are Still Searching For Higher Levels Of Sophistication In Data Analytics As firms requirements continue to increase and market leading capabilities become the norm, suppliers must continue to out innovate their competitors. When questioned on what energy management functionality customers will require going forward, Verdantix heard that firms will require: Integration with other business systems to enhance business performance. Seven customer panel respondents would like to see energy management software incorporate greater levels of non-energy related data in the next 12 months. Respondents understand that energy consumption depends on a number of variables, such as weather conditions, occupancy levels and production schedules. Respondents increasingly look to understand the relationship between non-energy related information and energy consumption to identify trends that could result in energy savings or assist in strategic business planning (see Verdantix Smart Innovators: Big Energy Data Software). I want to see greater interaction with utilities and internal management systems that may not be directly related with energy consumption such as financial or production management systems. I should be able to view energy consumption alongside a whole host of other metrics to better understand how energy impacts other areas of my business. (Chemicals firm) Increased automation and analytics. Five members of the customer panel mentioned that they would like to see more advanced data analytics to help them prioritize and resolve issues rather than simply identify them. Buyers that have a history of monitoring energy consumption are now looking to move to the next level and start managing energy more effectively. Respondents expect energy management software to reduce the amount of effort required to manage facilities from an energy standpoint, achieving this through Verdantix Ltd Reproduction Prohibited. 12

13 increased automation and intelligent alerting. I want to see greater automation with regards to the control of assets and reporting. I do not want to have to babysit the solution running reports and then look for issues. Instead I want the software to automate solutions and interact with me when it discovers a potential issue that requires my attention. The software needs to be intelligent enough to know when to generate reports and alarms etc. (Industrial engineering firm) Software that can maximize the value of having real-time energy data. Eleven members of the customer panel do not currently require real-time energy data. All 15 respondents said that they do not require real-time data across all facilities, but do see where it does/could add value within manufacturing plants or data centres, for example. The most common reason for not requiring real-time data is that firms do not have the internal resources to act upon the information. Panel members highlighted this as one area they would like to see greater developments from software suppliers. Respondents would like to see energy management software that can intelligently act upon real-time data, rather than just flag potential issues to users. I can see the benefit in having information in real-time however my maintenance department does not have the resources to react in real-time so would not experience the associated benefits of having real-time information. If the system could prioritize work orders and intelligently incorporate them into the existing daily schedule based on priority then that could be of interest. (Chemicals firm) Suppliers Must Demonstrate Scale, Integration And Domain Expertise To Win Buyer Confidence The number of customers that now require the seven energy management functionalities assessed in this study has increased across all functionalities between 2011 and 2012, reflecting the increasing expectations that customers have from energy management software. Verdantix heard that buyers look for specific supplier attributes, in addition to product attributes, when shortlisting software suppliers. Verdantix heard that customers (see Figure 6): Expect previous experience of global rollouts. One of the primary criteria that customers look for when selecting an energy management software supplier is previous enterprise deployments across at least several hundred sites spanning multiple countries. The entire customer panel said this was an important factor, reflecting preferences for solutions to match the expanding scale of their energy management programmes. Demand proven integration with hardware and equipment systems. Respondents show a strong preference towards suppliers ability to show previous integration successes with meters and controls. Fourteen members of the customer panel said that this was either important or very important. Integration across multiple energy domains is complex because it requires integration with meters, Building Management Systems (BMS) and lighting systems within commercial buildings, Supervisory Control and Data Acquisition Systems (SCADA) within manufacturing facilities, and Uninterruptible Power Supply (UPS) units, servers and racks within data centres. Software can integrate with these systems in near real-time through pre-built connectors with data historians or customized APIs and offer two-way connectivity with the equipment allowing assets to be controlled remotely. Verdantix Ltd Reproduction Prohibited. 13

14 Figure 6. Important Attributes Of Energy Management Software Suppliers How important are/were the following attributes of a software supplier in your selection process? An existing deployment that covers at least four countries and 400 sites 80% Proven integration with meters and controls across data centres, commercial buildings and industrial plants 8 Domain expertise to offer effective solutions within a particular sector 60% 33% Financial resources to compete effectively over the next two years 6 Proven ability to deliver value through consumption reduction and cost reduction 53% 2 Quality of commercial partnerships with other firms or organizations 33% 33% Offices in at least 3 countries 40% 33% High brand awareness 2 4 Very Important Important Neutral Unimportant Note: data labels are rounded to zero decimal places so may not sum to 100%, data ranked by sum of first two responses Source: Verdantix N=15 Push for an industry-specific track record. Fourteen of the respondents from the customer panel said that a successful and proven industry track record was either very important or important. Customers acknowledge that energy management requirements can vary widely across industry sectors. For example the banking sector has different energy-related equipment, energy consumption patterns and operational processes from that of the automotive sector. In a mature market suppliers will be able to provide business cases, case studies, or at least anonymous references from satisfied customers as a proof of point experience. Downplay brand recognition during the selection process. Only two members of the customer panel acknowledged the importance of high brand awareness when choosing a potential energy management software supplier. Verdantix surveyed 250 corporate energy decision-makers on brand preferences on different energy management software suppliers and found technology brands such as IBM and SAP garner higher levels of awareness and engagement than smaller, specialist energy management software firms such as C3 and Hara. This group of budget holders also harbours positive perceptions of the energy management software capabilities of building automation and controls suppliers such as Johnson Controls and Schneider Electric (see Verdantix Global Energy Leaders Survey 2012: Brands). Verdantix Ltd Reproduction Prohibited. 14

15 Figure 7. Preferences For Different Types Of Software Suppliers Which category of supplier would you prefer to buy energy management software from? (Rank in order of preference from 1 to 5, with 1 as the highest preference) Specialist software firm 40% 40% Specialist energy services firm with software 33% 2 2 Large software firm 2 33% Equipment and controls firm with software 2 33% Large technology firm with software 33% Source: Verdantix N=15 Buyers Prefer Suppliers With In-House Energy Expertise For Software Implementation Buyers look for suppliers that can demonstrate previous global deployments, a successful industry track record and proven integration with data sources. But when faced with a spectrum of choice, buyers find it difficult to choose amongst different categories of software suppliers. When Verdantix asked the customer panel which type of suppliers they preferred to buy software and implementation services from, we heard that buyers: Prefer to buy from specialist software and services suppliers. Twelve members of the customer panel said they would prefer to buy energy management software from specialist software suppliers focused on energy management, such as CarbonSystems or Verisae (see Figure 7). The next highest preference is to buy directly from an energy services specialist such as EnerNOC. Buyers look for suppliers to provide specialist capabilities, beyond software provision, such as getting data into the system and advising on how to analyse the data to save on energy costs. De-prioritize large software, equipment and technology suppliers. Five respondents said they would prefer to buy energy management software from large software firms, with only two selecting it as their first choice. Another five panel members said they would prefer to buy energy management software from equipment and controls suppliers, with only one respondent selecting this as their first choice. Verdantix heard several respondents were tentative about purchasing energy management software Verdantix Ltd Reproduction Prohibited. 15

16 Figure 8. Preferences For Different Types Of Implementation Services Providers Who would you prefer to implement energy management software? (Rank in order of preference from 1 to 4, with 1 as the highest preference) Software supplier 4 2 My firm's IT function/ outsourcer 2 40% IT systems integrator 40% Engineering/energy consultant 2 33% 33% Source: Verdantix N=15 from equipment and controls suppliers such as Eaton, Emerson and Honeywell as they perceived their energy management software as another channel through which to sell equipment and/or services. Prefer software suppliers to technical consultants as implementation partners. Verdantix heard that seven panel members prefer the software suppliers to deliver the implementation of energy management software (see Figure 8). Several respondents cited time and cost savings as a reason for this preference. In terms of preferences for external implementation partners, three respondents favour IT integrators such as Capgemini and Deloitte, while one respondent prefers engineering firms such as CH2M HILL and URS. Regardless of who is selected to implement the software we heard that customers require: greater support to customize software configuration in the early stages of installation; greater input into product development; and greater communication between project management teams during implementation. Increasingly look for in-house teams to be included in implementation efforts. Respondents to this year s customer panel are in favour of using their own firm s IT function to implement energy management software; this was cited as the least favourable option in the 2011 study. Verdantix heard that some customers have struggled because they underestimated the internal resources required to select, implement and operate energy management software and no longer want the IT function to play a peripheral role. Verdantix Ltd Reproduction Prohibited. 16

17 GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Based on the insights provided by the independent customer panel and our in-depth interviews with suppliers, Verdantix defines energy management software as: Enterprise-scale software that enables firms to monitor, analyse and reduce energy consumption across commercial buildings, data centres, industrial plants, on-site energy generation, as well as stationary and mobile fuel sources. This definition does not include software designed to be deployed on a site-by-site basis or with a focus solely on carbon, EH&S or other sustainability metrics. Previous Verdantix research shows that environmental management and sustainability management software applications differ in usage scenarios, user groups and functionality; they are not suitable to be included in this Green Quadrant study. Green Quadrant Methodology The Verdantix Green Quadrant methodology provides buyers of a specific product or service with a structured assessment of comparable offerings at a certain point in time. The methodology supports purchase decisions by identifying potential suppliers, structuring relevant purchase criteria through discussions with buyers, and providing evidence-based assessments of the products and services in the market. To ensure the objectivity and accuracy of the results of the study, the research process is based on the following principles and activities: Transparent inclusion. We aim to analyse all suppliers that qualify for inclusion in the research. For those suppliers that decline our invitation or fail to respond, we aim to include them in the report based on public information where this would provide an accurate analysis of their market positioning. Analysis from the buyer s perspective. We recruit a panel of individuals who have bought or plan to buy the product or service analysed in the Green Quadrant. Their role is to define relevant buying criteria and to weight the evaluation criteria in the model that drives the Green Quadrant graphic. Reliance on professional integrity. Since it is not feasible to check all of the data and claims made by suppliers, we emphasize the need for professional integrity. Assertions made by suppliers are put in the public domain in the Verdantix report and can be checked by competitors and existing customers. Scores based on evidence. To assess the expertise, resources, business results and strategy of suppliers, we gather evidence from public sources and conduct interviews with multiple spokespeople and with industry experts. When suppliers claim to be best-in-class we challenge them to present the evidence. Comparison based on relative capabilities. We construct measurement scales based on worst-in-class and best-in-class performance at a certain point in time. A supplier s position in the market can change over time depending on how its offering and success evolves compared to competitors. Green Quadrants are typically repeated once a year. Verdantix Ltd Reproduction Prohibited. 17

18 Evaluated Suppliers: Selection Criteria To ensure the Green Quadrant analysis only compares suppliers providing similar products or services, we define inclusion criteria. The software suppliers included in this study were chosen because their applications have: Enterprise-scale product architecture. This study only considers applications designed to scale up to multi-country, multi-site deployments for an enterprise with annual revenues greater than $1 billion. All suppliers provided evidence of a customer implementation with users in at least four countries and across at least 400 sites. Proven integration with meters and controls. To deliver cost savings, energy management software needs to integrate with a wide range of assets. The Green Quadrant analysis assesses automated data capture across four sources: 1) controls, equipment and meters in buildings; 2) equipment and meters in data centres and networks; 3) controls and meters in manufacturing plants; 4) primary energy and on-site generation. Core energy management functionality. This study targets enterprise-class apps with a broad set of functionality. Each application must, at a minimum, have functionality for automated data capture, master data management, workflow and task management, energy monitoring and targeting, and carbon reporting. In addition to the product attributes, Verdantix included only those suppliers with: Offices in at least three different countries. This criterion reflects the need to support international deployments. Resources to compete effectively in the market in the next two years. This criterion maps to customer demands for implementation and financial stability. Evidence of enterprise deployments for global firms with revenues of at least $1bn. This criterion maps to customer demands for evidence of enterprise implementation capabilities. This report compares 14 energy management software suppliers (see Figure 9). All software suppliers included in this study actively participated through interviews, product demonstrations and responses to a 134-point detailed questionnaire. The following suppliers of energy management software did not meet the inclusion criteria: 1E, 4tell, ABB, Alstom, AspenTech, Building Automation Solutions, BuildingIQ, Calico Energy, CloudApps, Cooper Industries, CRedit360, Eaton, Ecova, Emerson, Enablon, Energy Advantage, Energy And Technical Services, Energy Metering Technology, EnergyCAP, Energy Points, Energy Solutions Group, EnergyPrint, EnTech USB, Enviance, esight Energy, Faronics, FirstCarbon Solutions, GE, Honeywell, ICIS, Iconics, IMServ, InStep Software, Interval Data Systems, Locus Technologies, Microsoft, Noesis Energy, Novar, Noveda Technologies, Optima Energy Management, Optimal Energy Solutions, Oracle, OSIsoft, Phoenix Energy Technologies, Powerit Solutions, ProcessMAP, Pulse Energy, QAS, Raritan, Retroficiency, Rockwell Automation, SAS, Scanenergi, SCIenergy, Sentilla, Serious Energy, smeasure, Stark, Sustainable Real Estate Solutions, TEAM, Tridium, Verco Global, Verdiem, and Verismic. C3, EnerNOC and PE International qualified for this study but declined to participate. Verdantix Ltd Reproduction Prohibited. 18

19 Figure 9. Suppliers And Software Assessed Supplier CA Technologies CarbonSystems Software CA Data Center Infrastructure Management (DCIM), CA ecodesktop, CA ecogovernance, CA ecometer Sustainability Resource Management (SRM) Platform Elster EnergyICT EIServer GridPoint GridPoint Energy Manager Hara IBM IHS Hara Total Resource Performance Management IBM TRIRIGA (10.3), Tivoli Monitoring for Energy Management (6.3), IBM Systems Director Active Energy Manager (4.1), IBM Maximo Asset Management for Energy Optimization (7.1) IHS Energy & Carbon Solution Infor Infor Enterprise Asset Management (EAM) Johnson Controls Panoptix JouleX JouleX Energy Manager (JEM) SAP Energy and Environmental Resource Management Schneider Electric Energy Operation, Resource Advisor, StruxureWare Siemens Energy Monitoring And Control (EMC), Pace ECM Verisae Sustainability Resource Planning (SRP) Source: Verdantix Evaluation Criteria For Energy Management Software Verdantix defined the evaluation criteria using a combination of existing domain expertise from the 2010 and 2011 Green Quadrant studies, interviews with customers, services firms and software suppliers (see Verdantix Green Quadrant Energy Management Software (Global) 2011). The Green Quadrant analysis compares offerings from 14 software suppliers using 134 weighted criteria grouped under the following categories: Capabilities. This dimension, captured in the vertical axis of the Green Quadrant graphic, measures each software supplier on the breadth and depth of its software functionality. To assess performance on this dimension Verdantix collected data on 103 criteria grouped into 18 areas: commercial and retail building energy data capture, data centre and ICT energy data capture, industrial and manufacturing plant energy data capture, primary energy and on-site generation data capture, IT systems integration and Verdantix Ltd Reproduction Prohibited. 19

20 manual input, market data capture, data architecture and scalability, master data management, workflow and task management, security and data audit, internationalization, utility bill management, energy procurement and risk management, energy monitoring and targeting, energy asset management, project and portfolio management, carbon reporting and analysis, and energy reporting and analysis. Market momentum. This dimension, captured in the horizontal axis of the Green Quadrant graphic, measures each software supplier on a range of strategic success factors including publicly announced customers and internal sustainability performance. The 31 criteria included in this axis are grouped into seven areas: market vision and sustainability, product strategy and architecture, customer momentum, implementation and value, organizational resources, financial resources, and partnerships. The evidence provided by each supplier is captured in a quantitative model. Each top-level criterion is broken down into sub-criteria. Taking the energy monitoring and targeting capability section as an example, the sub-criteria are: 1) target setting and tracking (25%); 2) trend analysis and forecasting (); 3) energy efficiency identification (10%); 4) benchmarking (15%); 5) energy cost saving analysis tools (); and 6) energy budgeting and planning (10%). Each sub-criterion is awarded a score based on a scale of zero to three. Each top-level criterion is allocated a weighting that is used to calculate the overall score; these generate the Green Quadrant graphic. Details on the top-level criterion are provided in Figure 10-1, Figure 10-2 and Figure 11. These figures also provide (in brackets) the weighting attributed to each top-level criterion in the model. CA Technologies, IBM And Schneider Electric Set The Bar High For Energy Management Software The Green Quadrant analysis segments the market into four quadrants (see Figure 12). Within the Leaders Quadrant, three suppliers stand out: CA Technologies, IBM and Schneider Electric. The factors that distinguish these suppliers from the other 11 suppliers analysed are: Proven integration with meters and controls across multiple energy domains. The leading three suppliers post high scores for integrating with other software, systems and equipment to directly capture data across multiple energy domains. CA Technologies achieved the highest score on data centre and ICT infrastructure data capture (2.8) because of its CA ecometer app s best-in-class integration capabilities with data centre-specific equipment for customers such as StratITsphere. Schneider Electric achieved the highest score on industrial and manufacturing plant data capture (2.4) with best-in-class integration capabilities for SCADA systems and process historians for sectors such as basic resources and chemicals. IBM and CA Technologies achieved high scores for commercial and retail building energy data capture (2.5) because of their best-in-class integration capabilities with BMS and HVAC control sensors. Robust energy monitoring and targeting capabilities. The leading three suppliers scored highest for energy monitoring and targeting functionality that includes facilities benchmarking, identification of energy cost savings, and budgeting and forecasting for energy spend. On this capability, CA Technologies scored the highest overall (2.5) demonstrating best-in-class capabilities in target setting and tracking, and trend analysis and forecasting, followed by IBM (2.4) demonstrating best-in-class capabilities in target setting and tracking, and energy efficiency identification. Elster EnergyICT is the only Verdantix Ltd Reproduction Prohibited. 20

21 Figure Capabilities Criteria For Energy Management Software Suppliers CAPABILITIES Commercial and retail building energy data capture (10%) Can the software integrate with energy meters and building management systems within commercial buildings? Can the software integrate with HVAC, lighting and refrigeration asset? IT, data centre and telecoms energy data capture (8%) Can the software integrate with energy meters, uninterruptible power supply units, data centre power monitoring equipment, IT and communications power monitoring equipment and other IT management systems? Industrial and manufacturing plant energy data capture (8%) Can the software integrate with energy meters, supervisory control and data acquisition systems, manufacturing execution systems and process historians from industrial and manufacturing facilities? Primary energy and on-site generation data capture (3%) How does the software capture oil consumption data, natural gas consumption data, coal consumption data and biomass consumption data? How does the software capture energy generated on-site and excess energy that is exported off-site? IT systems integration and manual input (8%) Can the software integrate with existing IT and communications systems and third party technology systems? What functionality exists to capture EDI billing data, spreadsheet data and data from mobile devices? What functionality exists to allow users to manually input other energy data? Market data capture (2%) Does the software feed in weather data, utility tariff rates, energy benchmark information and data on financial incentives? Data architecture and scalability (2%) What characteristics of the software architecture facilitates real-time data capture and analysis? What functionality exists for data normalization and calculation for large data sets? How scalable is the architecture and what tests are in place to ensure it matches customer requirements? Master data management (4%) What functionality exists to define, configure and change organizational hierarchy? How does the software capture and track geographic location information? Workflow and task management (5%) Can the software account for user-based capabilities? How does the user allocate tasks and set alerts? Can the user create customized workflow? Does the software contain any pre-built workflow or energy management system certification workflow? Figures in brackets represent the weighting given to each criterion in the flexible multi-criteria model that generates the Green Quadrant graphical analysis. Source: Verdantix Verdantix Ltd Reproduction Prohibited. 21

22 Figure Capabilities Criteria For Energy Management Software Suppliers CAPABILITIES Security and data audit (1%) What data change controls does the system have? How does the system provide access security? What hosting environment security does the supplier provide? What data recovery processes are in place? What tools does the software contain for data estimation, uncertainty? Internationalization (3%) How many user interface languages does the system support? How many currencies does the system support? How many energy metrics does the system support? Utility bill management (10%) What functionality does the software have for supplier management, account tracking, bill accruals, utility bill validation, multi-tenant billing for buildings, energy rebate validation and chargebacks? Energy procurement and risk management (5%) What functionality exists to manage the procurement process, analyse costs and tariffs, manage risk associated with procuring energy, plan multiple procurement scenarios and manage renewable energy certificates? Energy monitoring and targeting (10%) What functionality is there to set energy related targets and track progress against those targets, analyse trends and forecast into the future, identify energy efficiency opportunities, benchmark facilities, analyse energy cost savings and budget energy spend? Energy asset management (5%) What functionality exists to schedule asset maintenance or predictive maintenance, diagnose problems, directly control energy consuming and generating assets, demand response, condition assessment and asset power factor analysis? Project and portfolio management (8%) What functionality exists to create energy efficiency or energy generation projects, analyse those projects, create a portfolio of projects and effectively plan and prioritize those projects? Carbon reporting and analysis (3%) What emissions factors does the software contain? How does the software capture fugitive emissions? How does the supplier provide emissions accuracy? What functionality is provided for the user to report emissions mandatorily and voluntarily and analyse those emissions? Energy reporting and analysis (5%) What functionality does the software have for mandatory and voluntary energy reporting? How is the user able to configure reports? How configurable and user friendly is the dashboard? Figures in brackets represent the weighting given to each criterion in the flexible multi-criteria model that generates the Green Quadrant graphical analysis. Source: Verdantix Verdantix Ltd Reproduction Prohibited. 22

23 Figure 11. Momentum Criteria For Energy Management Software Suppliers MOMENTUM Market vision and sustainability (15%) What market vision does the firm have? What is the firm s corporate sustainability strategy? Does the firm report its own sustainability data? Product strategy and architecture (30%) Customer momentum () What is the planned functionality for 2013? How frequently does the firm release new software? What is the flexibility of the firm s license model? What is the firm s average deal size? What application architecture options does the firm have? How familiar are the customer panel with the firm and its software? How many named customers does the firm have? How many have revenues above $1 billion? What is the largest deployment the firm has undertaken? Implementation and value (12.5%) What implementation and process change support does the firm provide? How flexible is the software? What energy management services does the supplier offer? What value does the firm deliver to its customers? Organizational resources () Where are the firm s offices located? Where does the firm have hosting facilities? Where does the firm have technical support locations? How many employees does the firm have? What domain expertise does the firm have? Financial resources (3%) How much revenue does the firm generate from energy management software? What funding has the firm received? Partnerships (12.5%) What consulting partners does the firms have? What systems integrators does the firm partner with? What technology suppliers does the firm partner with? Figures in brackets represent the weighting given to each criterion in the flexible multi-criteria model that generates the Green Quadrant graphical analysis. Source: Verdantix supplier outside of the Leaders Quadrant that scored as highly (2.1), with best-in-class scores for target setting and tracking, and trend analysis and forecasting. Advanced energy efficiency project and portfolio management tools. Only the leading three scored above a 2.0 for project and portfolio management functionality: IBM scored the highest overall (2.8), followed by CA Technologies (2.7) and Schneider Electric (2.2). IBM stood out amongst its peers for its best-in-class capabilities in energy equipment specification and selection by providing model and asset-specific equipment data from US construction data provider RSMeans to help customers estimate equipment costs when budgeting energy efficiency projects. The CA ecogovernance app stands out from the crowd in this category with functionality such as phase-gate methodologies, hierarchical project relationship management and in-depth financial and energy efficiency project analysis. Schneider Electric and GridPoint achieved best-in-class scores for on-site energy generation project planning. Verdantix Ltd Reproduction Prohibited. 23

24 CAPABILITIES VERDANTIX GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Figure 12. Green Quadrant Energy Management Software CHALLENGERS LEADERS IBM CA Technologies Schneider Electric CarbonSystems Siemens Verisae Johnson Controls GridPoint Infor Hara Elster EnergyICT SAP IHS JouleX ENTREPRENEURS SPECIALISTS MOMENTUM Capabilities This dimension assesses capabilities for: commercial and retail building energy data capture, IT, data centre and telecoms energy data capture, industrial and manufacturing plant energy data capture, primary energy and on-site generation data capture, IT systems integration and manual input, market data capture, master data management, workflow and task management, security and data audit, internationalization, utility bill management, energy procurement and risk management, energy monitoring and targeting, energy asset management, project and portfolio management, carbon reporting and analysis, and energy reporting and analysis. Momentum This dimension assesses strategic success metrics including: market vision and sustainability, product strategy and architecture, customer momentum, implementation and value, organizational resources, financial resources, partnerships. The Green Quadrant graphic is generated from a multi-criteria model in a spreadsheet. The flexible design of this model enables Verdantix clients to add providers and re-weight or re-score criteria for additional insights. Source: Verdantix Verdantix Ltd Reproduction Prohibited. 24

25 CA Technologies CarbonSystems Elster EnergyICT GridPoint Hara IBM IHS Infor Johnson Controls JouleX SAP Schneider Electric Siemens Verisae VERDANTIX GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Figure Capability Scores For 14 Energy Management Software Suppliers Commercial and retail building energy data capture IT, data centre and telecoms energy data capture Industrial and manufacturing plant energy data capture Primary energy and on-site generation data capture IT systems integration and manual input Market data capture Data architecture and scalability Master data management Workflow and task management Security and data audit Internationalization Measurement scale is 0 to 3 This figure represents the quantified assessment of supplier commercial capabilities based on the Green Quadrant benchmark data. A full bar indicates best in class capabilities (3/3), an empty bar indicates no capabilities (0/3). Source: Verdantix Verdantix Ltd Reproduction Prohibited. 25

26 CA Technologies CarbonSystems Elster EnergyICT GridPoint Hara IBM IHS Infor Johnson Controls JouleX SAP Schneider Electric Siemens Verisae VERDANTIX GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Figure Capability Scores For 14 Energy Management Software Suppliers Utility bill management Energy procurement and risk management Energy monitoring and targeting Energy asset management Project and portfolio management Carbon reporting and analysis Energy reporting and analysis Measurement scale is 0 to 3 This figure represents the quantified assessment of supplier commercial capabilities based on the Green Quadrant benchmark data. A full bar indicates best in class capabilities (3/3), an empty bar indicates no capabilities (0/3). Source: Verdantix Energy and industry domain credentials. The CA ecometer application, targeted specifically at data centre and building energy management; and CA ecodesktop, targeted specifically at PC power consumption, differentiate CA Technologies from its peers. IBM increased its capabilities within building energy management through its acquisition of TRIRIGA in April 2011, inheriting over 200 customers including the City of New York (see Verdantix IBM Acquires TRIRIGA To Boost Smarter Buildings Initiative). Schneider Electric increased its expertise and understanding around supply side energy management with its acquisition of Summit Energy in Established enterprise-scale customer bases. All three suppliers have strong customer portfolios including a large number of firms with annual revenues greater than $1 billion, with proven deployments covering at least 4,000 sites and 65 countries. In March 2012, IBM s largest publicly disclosed customer deal, the US Air Force, signed to deploy the IBM TRIRIGA software across its physical infrastructure portfolio. This spans 626 Verdantix Ltd Reproduction Prohibited. 26

27 CA Technologies CarbonSystems Elster EnergyICT GridPoint Hara IBM IHS Infor Johnson Controls JouleX SAP Schneider Electric Siemens Verisae VERDANTIX GREEN QUADRANT ENERGY MANAGEMENT SOFTWARE Figure 14. Momentum Scores For 14 Energy Management Software Suppliers Market vision and sustainability Product strategy and architecture Customer momentum Implementation and value Organizational resources Financial resources Partnerships Measurement scale is 0 to 3 This figure represents the quantified assessment of supplier market momentum based on the Green Quadrant benchmark data. A full bar indicates best in class momentum score (3/3), an empty bar indicates no momentum (0/3). Source: Verdantix million square feet of real estate and approximately 30,000 users will be using the solution by CA Technologies and Schneider Electric also have examples of very large deployments, although they cannot name customers because of confidentiality clauses. The large number of deployments across multiple countries reflects a key buying criterion for cautious customers representing firms with multi-billion dollar revenues and international operations. Strong momentum through a partner ecosystem. The three leading suppliers have established a large number of partnerships with systems integrators and consultants to help deliver global enterprise solutions. CA Technologies has built a partner ecosystem comprised of consulting firms such as ICF International and Jones Lang LaSalle, systems integrators such as Capgemini, Deloitte and Wipro EcoEnergy, and technology partners such as Cisco and Trendpoint. IBM orchestrated the Green Sigma coalition in 2009 with ABB, Cisco, Eaton, ESS, Honeywell, Johnson Controls, SAP, Schneider Electric and Verdantix Ltd Reproduction Prohibited. 27

28 Siemens making up its founding members. The Green Sigma enables an industry-wide interoperability of metering, monitoring, data communications and software within multiple energy domains. JouleX and Schneider Electric provided the most extensive list of partners including consulting, systems integrators and technology firms achieving best-inclass scores (3.0) for the size and quality of their partner network. Compelling market vision. Among all participants in this study, IBM and Schneider Electric articulated the most grounded and detailed vision for market evolution. Schneider Electric believes its customers will need integrated energy management technology architecture that enables domain-to-enterprise level visibility, access, control, optimization and management. IBM s vision is to help customers leverage increasing volumes of data to improve future operational, environmental and financial performance. It will do this by providing increased business intelligence that is driven by advanced analytics and process automation. Comprehensive sustainability strategy. The three leading suppliers have integrated sustainability deep into their own organizations, leveraging many of their own solutions to improve energy and environmental performance. By doing so, they lead by example reducing their environmental footprint and provide valuable proof points for potential customers about how their solutions can improve energy performance. Superior organizational and financial resources. In 2011, CA Technologies, IBM and Schneider Electric generated revenues of $4.8 billion, $106.9 billion and 22.4 billion ($29.3 billion) respectively. Global presence and large workforces are attractive to customers with international operations of their own. Healthy profits and balance sheets provide assurance that the supplier will not cease in the middle of a multi-year contract. Significant financial backing also allows suppliers to invest in long-term product strategies and make strategic product acquisitions. Five Suppliers Emerge As Serious Market Contenders Another five suppliers CarbonSystems, Elster EnergyICT, Johnson Controls, Siemens and Verisae have scored above 1.45 on the capabilities axis. Each of these suppliers has strong capabilities based around original core areas of expertise such as metering, environmental data management, building controls and maintenance management. Each supplier has invested in specialist areas to increase its capabilities and value proposition. Specifically: CarbonSystems combines metering expertise with new executive dashboards. Specialist energy management software provider CarbonSystems has reinforced its position in the Leaders Quadrant for the second year running. The CarbonSystems platform has been developed to capture, integrate and manage energy, emissions and environmental data across a portfolio of buildings, data centres and manufacturing plants. CarbonSystems scored highest amongst its peers for energy reporting and analysis (2.5) with best-in-class scores for voluntary reporting and the quality of its dashboards. CarbonSystems achieved strong scores for carbon reporting and analysis (2.4), security and data audit (2.3), utility bill management (2.2) and several best-in-class grades in energy monitoring and targeting. After successfully revamping its dashboards during 2012, CarbonSystems is building new analysis and modelling tools in 2013, to enhance the business intelligence of its solution. Verdantix Ltd Reproduction Prohibited. 28

29 CarbonSystems has developed a strong customer and partner portfolio. CarbonSystems displays the strongest momentum out of the five suppliers, boasting an impressive global customer list that includes 34 multi-billion dollar revenue firms including chemical manufacturer AkzoNobel and Microsoft. CarbonSystems also has diverse partnerships in place with consultants including Accenture, ICF International and Infosys, facilities management firms including Colliers International, and a number of geographic-specific energy consultants such as Fellon-McCord in the US, EnergyQuote JHA in the UK and Energenz in Hong Kong. Siemens complements its energy services offering with its EMC application. Siemens is a global technology, energy, electronics and electrical engineering firm with 2011 revenues of $94 billion. In January 2012 Siemens Building Technologies Division acquired energy procurement services firm Pace Global Energy Services (Pace Global s ECM Hub was assessed in the 2011 study). Siemens scored lower on momentum than its peers due to the fact it does not retail its EMC application as a stand-alone product, instead packaging it within Siemens Building Technology s broader energy services capabilities. Siemens achieved best-in-class scores for corporate sustainability strategy and reporting, energy management services and organizational resources. Siemens has acquired strong supply side management capabilities. Matched only by Schneider Electric, Siemens scored best-in-class (3.0) for energy procurement and risk management because of the application s ability to manage RFP processes, inclusion of forward-looking energy price and policy data in analysis and best-in-class scenario modelling capabilities. Siemens scored higher than its peers for utility bill management (2.5) because of the Energy Monitoring and Control (EMC) application s best-in-class scores for supplier management, bill accruals, utility bill validation and energy rebate validation that leverages its independently populated rebate database. Assuming full product integration of Pace ECM, Siemens will be in a strong position by mid-2013 to deliver EMC as a stand alone product and challenge its competitors in the Leaders Quadrant. Verisae targets the connected facility. In the Leaders Quadrant for the second year running, Verisae has built its energy and industry domain expertise in big box retail, food service and grocery retail by offering granular solutions for industry-specific operational assets. Verisae boasts a blue-chip client list including Costco, Sainsbury s, Target, Tesco and Walmart. Verisae s product strategy assumes retail customers who face the challenge of collecting data from thousands of stores and managing related environmental issues such as fugitive F-Gas emissions will want to combine asset, facility, energy and environmental management into one integrated platform (see Verdantix Verisae Unlocks Opportunities In The Retail Market). Verisae is ahead of its peers for commercial and retail building energy data capture. Verisae scored highest amongst its peers for commercial and retail building energy data capture (2.6) because of best-in-class levels of integration with BMS, HVACs and refrigeration units, and energy asset management (2.3) because of best-in-class functionality to automatically identify anomalies in the data, such as refrigerant leaks, and initiate alerts with asset-level control. Verisae also achieved high scores in master data management (2.1) and data architecture and scalability (2.0). Verdantix Ltd Reproduction Prohibited. 29

30 Johnson Controls creates a building energy management apps marketplace. Johnson Controls Panoptix has achieved high scores for commercial and retail building energy data capture (2.4), energy reporting and analysis (2.1) with best-in-class scores for configurable internal reporting and the quality of its business rules engine. Johnson Controls Panoptix is an open platform that allows other software suppliers to create apps that leverage the data within Panoptix, and then sell these apps to Johnson Controls customers through the Panoptix App Marketplace (see Verdantix Panoptix Targets Building Energy Performance Optimization). To gain a foothold into the Leaders Quadrant, Johnson Controls needs to maintain its investment in the Panoptix product architecture and development of a product roadmap that allows its customers to leverage, but not rely on these third-party apps. Johnson Controls provides strong in-house consulting and implementation services. As an energy equipment and services firm, Johnson Controls views energy management software as a source of data-driven insight to trigger actions either by automated controls or by technicians. Whilst not given significant weighting in the Green Quadrant model, strong in-house consulting and implementation services where Johnson Controls achieved best-in-class grades in the implementation and value momentum scoring can strengthen the solution delivery value proposition. Elster EnergyICT leverages its meter data management background. Founded in 1991 and acquired by global metering firm Elster Group in October 2009, Elster EnergyICT provides software, services and metering to utilities, energy services firms and C&I firms. Elster EnergyICT s vision is to provide customers with actionable intelligence around energy management driven by data and advanced analytics through its EIServer platform. Elster EnergyICT scored highest amongst its peers for primary energy and on-site energy generation data capture (2.4) along with high scores in energy monitoring and targeting (2.1), data architecture and scalability (2.0) and master data management (2.0). Elster EnergyICT s forecasting and project tracking modules achieved best-in-class scores for target setting and tracking and trend analysis and forecasting. During 2013, Elster EnergyICT will focus on improving its business intelligence integration tools and compatibility with mobile devices. Elster EnergyICT increases its customer portfolio through energy services partnerships. Elster EnergyICT has a strong presence in the grocery retail market managing energy for firms such as Coles and Tesco and in total boasts a customer list that includes over 20 firms with revenues over $1 billion. Elster EnergyICT has recognized that an increasing number of energy services firms are starting to look to technology suppliers to help them rapidly build new and differentiating services and has already partnered with Matrix in the UK and SEDAC Energy Management in Australia. Elster EnergyICT has further partnerships in place with a number of systems integrators including Accenture, Atos, Capgemini and Logica. Six Suppliers Offer Targeted Energy Domain Expertise The lower half of the quadrant is populated by six suppliers: GridPoint, Hara, IHS, Infor, JouleX and SAP. All these suppliers offer solutions targeted at particular industry sectors and energy domains. Verdantix has identified that: Hara provides a data-centric approach to energy and resource management. Despite two Verdantix Ltd Reproduction Prohibited. 30

31 CEO changes since 2011, Hara s vision remains the same: to create an enterprise system of record for energy and sustainability metrics. The firm sees the opportunity for the Hara application to resolve multiple inefficiencies in the entire energy and resource value chain through data aggregation and analytics. Hara scored highest amongst its peers for energy reporting and analysis (2.5) with best-in-class scores for voluntary reporting and the quality of its dashboard and achieved high scores for master data management (2.0), security and data audit (1.9) and carbon reporting and analysis (1.9). Hara has more than 40 customers each with revenues greater than $1 billion covering a broad range of industries that includes household names such as Avaya, Bloomberg, Dell, ebay, Hasbro, HP, Safeway and US Bank. IHS offers a centrally managed enterprise environmental management system. IHS's vision is that environmental management software will evolve from addressing environmental compliance and performance (inclusive of energy and natural resources) to respond to the broader topic of enterprise sustainability through an integrated offering across software, content and services. The IHS Energy & Carbon Solution achieved high scores for master data management (2.2), industrial and manufacturing plant energy data capture (2.0), workflow and task management (1.8) and energy reporting and analysis (1.8). IHS has focused on the oil and gas and asset-intensive industrial sectors with customers including Cenovus Energy, Husky Energy and Spectra Energy. IHS has a strong partner network with engineering consultants such as CH2M HILL, ERM and URS Corporation, systems integrators Deloitte and IBM and technology partners including MicroStrategy and OSIsoft. GridPoint targets the retail market. GridPoint is a US headquartered firm with 140 employees and provides its customers with greater visibility and control of their energy consumption through provision of hardware, software and services. The GridPoint Energy Manager achieved high scores for commercial and retail building energy data capture (2.0), industrial and manufacturing plant energy data capture (2.0), primary energy and on-site generation data capture (1.7) and energy asset management (1.7). GridPoint achieved best-in-class scores (3.0) for both on-site energy generation project planning and demand response. GridPoint has achieved most of its success selling to grocery and retail stores along with restaurants and government departments. GridPoint has seen one of its contracts with a US federal agency increase from 16 to 2,250 sites after achieving energy savings of 15% and an ROI of 24 months. Infor is on the integration journey to enterprise energy management. At the time of reviewing the applications for this study, Infor has not yet fully integrated the ENXSuite application it acquired in November 2011, into its Enterprise Asset Management (EAM) product offering and expects this to be complete during the first quarter of As such, the analysis in this report is based solely on the capabilities of Infor EAM. Infor achieved high scores for industrial and manufacturing plant energy data capture (2.3), master data management (2.0), energy asset management (1.9) and IT systems integration and manual input (1.8). Infor achieved best-in-class scores for maintenance scheduling, predictive maintenance and asset condition assessment. Infor will be in a stronger position once the full integration of ENXSuite is complete inheriting strong energy reporting and analysis capabilities (see Verdantix Infor Shifts From Facility To Enterprise Energy Management). Verdantix Ltd Reproduction Prohibited. 31

32 SAP provides resource management to industrial and manufacturing sectors. SAP s vision for energy management is built on the assumption that firms want to take a more strategic approach. SAP aims to help its customers proactively manage their end-to-end energy business process across energy consumption, procurement and generation, including related environmental impacts. SAP s Energy and Environmental Resource Management solution achieved strong scores in carbon reporting and analysis (2.2) with best-in-class capabilities around carbon emission accounting, industrial and manufacturing plant energy data capture (2.0), master data management (1.9) and project and portfolio management (1.8). SAP s solution is targeted towards industrial and manufacturing plants, Valero achieved $120 million in energy savings in the first year of user adoption. SAP has developed its own ambitious sustainability strategy and leverages its own technology and partnerships to meet targets and demonstrate the value that can be achieved. JouleX targets ICT power management. The JouleX Energy Manager (JEM) allows customers to monitor, analyze and control energy consumed by any device connected to a firm s network without using software agents. The firm s product strategy assumes that as more firms deploy power over ethernet devices, the network will become the base platform for enterprise energy management, allowing firms to directly control the consumption of devices including VoIP phones, printers, monitors and lighting controllers. JouleX s deep energy and industry domain expertise in data centres and distributed offices provides its competitive differentiation. JouleX achieved high scores for data centre and ICT energy data capture (2.6) with best-in-class scores for integration with data centre and ICT equipment and management systems, commercial and retail building energy data capture (2.5), master data management (2.4) and data architecture and scalability (2.0). JouleX demonstrates value to firms through proof-of-concept solutions. JouleX has over 170 customers and has built a strong customer base within the telecommunications sector with customers including Deutsche Telekom, Swisscom, Orange and Vodafone. As a result of its long-standing partnership with Cisco, JEM for EnergyWise is available as a free option for Cisco s smaller LAN switches (see Verdantix Cisco And JouleX Target IT Facilities Energy Management). JouleX currently has over 200 pilot and proof-of-concept solutions installed with firms not yet paying for the service. USER REQUIREMENTS SHOULD DRIVE SOFTWARE PURCHASE DECISIONS Verdantix recommends that buyers of energy management software shortlist suppliers based on their energy domain expertise, product strategy and planned usage scenarios over the next two years. Verdantix heard that not all suppliers can meet all firms specific requirements during and after the deployment of the solution. Firms with complex energy management requirements in particular will implement software from several suppliers to provide integration with the hundreds of thousands of energy-consuming assets, devices and controls present in a large enterprise. Witness UK retail giant Tesco listed as a client of CA Technologies, Elster EnergyICT and Verisae. Common usage scenarios include firms with: Strategic sustainability strategies and a transformational programme in place. Verdantix research finds that 49% of CSOs are responsible for implementing energy management projects (see Verdantix Global Sustainability Survey: Budgets And Priorities). CSOs that want to look beyond the low-hanging fruit and set their firm on a path towards a Verdantix Ltd Reproduction Prohibited. 32

33 sustainable future should look for firms that have advanced project and portfolio planning capabilities. CA Technologies, CarbonSystems, Hara, IBM, SAP and Schneider Electric demonstrated this capability well. Their solutions allow firms to build energy efficient projects at a facility, business, country or enterprise level, run what-if scenario models, prioritize projects based on impact, manage the RFP process and then track contracts and timelines throughout the project. Industrial facilities seeking operational efficiency. Firms with significant industrial footprints such as chemicals and pharmaceuticals now realise that high energy consumption does not just come with the territory. Energy-intensive firms are now managing energy more effectively to gain competitive advantage through cost savings. US chemicals and plastics producer Dow Chemical has saved $24 billion since 1990 as a result of energy efficiency measures. Firms in these sectors generally have fewer sites to manage compared to a global hotel franchise for example, but each site contains energy-intensive equipment and unique manufacturing processes. Firms in these sectors should look to software suppliers with a strong pedigree in industrial and manufacturing plant energy data capture and management such as IHS, Infor, SAP and Schneider Electric. Environmental management experience wishing to consolidate software solutions. Firms in sectors including automotive, basic resources, chemicals, industrial engineering, oil and gas and utilities are familiar with environmental reporting software as a result of the regulatory pressure to report their GHG emissions. Firms that require environmental management software, but would also like greater visibility and control over their energy consumption without having to use two suppliers, should consider using IHS or SAP. Both suppliers have demonstrated strong energy management capabilities and are leaders in environmental management software (see Verdantix Green Quadrant Environmental Management Software (Global) 2012). Energy critical assets where security of supply poses major risks. Today energy managers are on the receiving end of diverse energy supply risks including blackouts and nuclear power plant shutdowns. Critical infrastructures such as telecommunication networks, financial services, power utilities and hospitals can suffer exponential impacts the longer the interruption. More firms particularly in Latin America and APAC are investing in decentralized energy such as CHP and Solar PV (see Verdantix On-Site Renewables Gain Global Momentum). Elster EnergyICT and GridPoint demonstrated particularly strong capabilities around data capture from on-site generation, including energy exported back to the grid. Schneider Electric and Siemens demonstrated strong energy procurement capabilities to help firms plan and develop future procurement strategies to help safeguard them from an increasingly volatile energy market. Increasingly squeezed budgets seeking energy cost reductions. Suppliers with strong energy monitoring and targeting capabilities such as CA Technologies, Elster EnergyICT, IBM and Schneider Electric are best placed to help firms identify inefficiencies, set appropriate targets and monitor performance. Hara demonstrated the strongest capabilities around energy budgeting and planning. Utility bill management is another area that can provide firms with significant savings by streamlining the process and identifying billing inaccuracies. Of the firms assessed in this study CarbonSystems, Schneider Electric and Siemens demonstrated the strongest capabilities for this functionality. Verdantix Ltd Reproduction Prohibited. 33

34 Large building and data centre portfolios looking to optimize energy consumption. Large global organizations with dispersed building portfolios in sectors such as banking, business services, insurance, media and retail that want to manage and integrate multiple energy domains should look to suppliers with not only building energy management experience but also large-scale existing deployments such as CA Technologies, IBM and Johnson Controls. Their energy management capabilities are matched by their industry experience and long lasting partnerships with systems integrators. Firms looking to better manage building portfolios containing a high density of ICT equipment or data centres should also consider JouleX for its deep domain expertise and experience. Limited to zero visibility of current energy consumption and spend. Whilst some firms already see the value of investing in energy management, others lag behind and are simply looking for increased visibility on energy and carbon consumption and spend. Pressure on firms to improve their sustainability reporting efforts, by stock exchanges for example, increases the importance of being able to cost effectively capture and report this data, whilst ensuring it is both complete and accurate (see Verdantix Sustainability Reporting Frameworks Gain Global Traction). Suppliers such as Hara and CarbonSystems combine robust data capture and master data management capabilities with best-in-class corporate dashboards. Both suppliers achieved best-in-class scores for voluntary reporting to organizations such as the Carbon Disclosure Project, streamlining their customers sustainability reporting efforts. Verdantix Ltd Reproduction Prohibited. 34

35 The Authority On Sustainable Business Verdantix is an independent analyst firm. We provide authoritative data, analysis and advice to help our clients succeed in the world of sustainable business. Through our global primary research and deep domain expertise we provide our clients with strategic advice, revenue generating services, best practice frameworks, industry connections and competitive advantage. A Strategic Research Relationship We work with our clients, located in more than 50 countries around the world, to build long-term, strategic research relationships. We listen to our clients requirements for data, analysis and advice on sustainable business to help them succeed with their strategies, programmes and initiatives. Our Knowledge Service helps clients: Plan effectively for regulations Keep pace with competitive actions Make connections with new customers Launch new propositions Educate colleagues with evidence Quickly shortlist suppliers Save time in strategy development Reduce risk with new initiatives Speed up business case assessments Benchmark performance Deliver financial results Achieve competitive advantage Sustainability Expertise And Industry Connections Our analysts combine rich business experience with specialist sustainability expertise. They leverage privileged access to thousands of sustainability decision makers around the world and robust methodologies to deliver analysis that is independent, fact based, and commercially relevant. Find out more: visit Contact us: research@verdantix.com Verdantix Ltd Reproduction Prohibited. 35