Business Strategy: Smart Water Market Overview

Business Strategy: Smart Water Market Overview IDC Energy Insights: Smart Grid Strategies IDC Energy Insights: Utility IT Strategies BUSINESS STRATEGY #EI235229 Global Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.935.4400 F.508.988.7881 www.idc-ei.com Rick Nicholson Dean Chuang Daniella Muallem Marcus Torchia IDC ENERGY INSIGHTS OPINION The threat of water scarcity or shortages and the need to manage aging infrastructure are driving water utilities and other organizations responsible for water supply to consider smart technology based solutions to reduce water losses and enable water conservation. However, current deployment rates of these solutions are low because of a lack of understanding regarding the business case for investment, few successful case study examples, issues with technology availability and maturity, and the fragmented nature of the water utility market. Water utilities considering whether or not to invest in smart water solutions must understand the current and projected capabilities of, the potential benefits and risks associated with, and the experiences of other utilities in deploying these smart water solutions. IDC Energy Insights believes that: The growth rates for smart water metering will be slower than the growth rates experienced with smart metering for electricity, at least in the North American and European regions. Smart metering deployments by electric utilities were strongly driven by regulatory or policy mandates and, at least in the United States, by government stimulus funding. Assuming that similar mandates and stimulus funding will not impact the smart water market, growth rates will be driven primarily by business needs, especially by water conservation and leak detection on the customer side of the meter. Adoption rates for smart water network management solutions will outpace growth rates for smart water metering. The business case for smart water network management solutions is more straightforward since it does not rely upon changes in consumer behavior just the achievement of loss reduction and energy saving targets. Smart water network management solutions also typically have lower capital costs since they do not require the replacement or retrofitting of all customer meters. June 2012, IDC Energy Insights #EI235229 IDC Energy Insights: Smart Grid Strategies: Business Strategy

TABLE OF CONTENTS In This Study 1 Situation Overview 1 The Approach 3 Smart Water Metering... 4 Smart Water Network Management... 8 Challenges... 11 Future Outlook 12 Essential Guidance 13 Actions to Consider... 13 Learn More 14 Related Research... 14 P #EI235229 2012 IDC Energy Insights

LIST OF FIGURES 1 Water Supply System... 4 P 2012 IDC Energy Insights #EI235229

IN THIS STUDY This report provides an overview of the smart water market, which is emerging as a similar and parallel market to the already established smart grid market. The smart water market includes many of the same technology components as the smart grid market (e.g., smart meters, sensors, wireless communications networks, data management, analytics) and is aimed at addressing global issues like water stress and aging infrastructure. Specifically, the report focuses on smart technology based solutions that reduce water losses and enable water conservation. It provides analysis and advice to business and IT decision makers at water utilities on business drivers for investment, relevant solutions, potential benefits, challenges, and case study examples. This report does not cover smart water solutions for large water consumers (e.g., commercial, industrial, agriculture), nor does it address the wastewater segment of the utility industry. These topics will be covered in future reports. SITUATION OVERVIEW The threat of water scarcity or shortages and the need to manage aging infrastructure are driving water utilities and other organizations responsible for water supply to consider smart technology based solutions to reduce water losses and enable water conservation. However, current deployment rates of these solutions are low because of a lack of understanding regarding the business case for investment, few successful case study examples, issues with technology availability and maturity, and the fragmented nature of the water utility market. Water utilities considering whether or not to invest in smart water solutions must understand the current and projected capabilities of, the potential benefits and risks associated with, and the experiences of other utilities in deploying these smart water solutions. Water scarcity, a long-term imbalance between supply and demand, and water shortages such as droughts that are of shorter duration are primary drivers for growth in the smart water market. Often referred to as water stress, this situation is influenced by growing demand and competition for water, climate change, pollution, and geographically uneven water supply resources. According to the United Nations, global water usage has been growing at more than twice the rate of population growth in the past century. Future population growth coupled with changing diets, increasing wealth, and urbanization will exacerbate this issue. In addition to demographics, the other long-term trend affecting water stress is climate change, which is creating more severe and longer duration floods in some regions and droughts in others. The European Union has recognized that water scarcity and droughts are already a serious problem in many European regions and that the situation is expected to worsen as a consequence of climate 2012 IDC Energy Insights #EI235229 Page 1

change. Other regions currently experiencing water stress include both the southeastern and the southwestern United States (including California, which passed a water conservation act in 2009, and Texas, which experienced its driest seven-month period on record in 2011), Australia, Israel, China, the Amazon region of South America, and the horn of Africa. Another primary driver for growth is aging infrastructure, which is especially prevalent in the Western or developed countries. According to the American Water Works Association (AWWA), much of the drinking water infrastructure in the United States, comprising more than 1 million miles of pipes, is nearing the end of its useful life and approaching the age at which it needs to be replaced. This aging infrastructure is leaky, is prone to breaks, and is resulting in degraded water service and increased water service disruptions. The U.S. Environmental Protection Agency (EPA) estimates that up to 60% of water worldwide is lost to leaky pipes and that, in the United States alone, an average of 700 water main breaks occur every day. According to the World Bank, aging water distribution networks result in annual water losses (referred to as non-revenue water [NRW]) estimated globally at 48.6 billion cubic meters, approximately 66 times the amount of water used by the city of London. The AWWA has estimated that the investment required to replace the aging infrastructure in the United States will total more than $1 trillion over the next 25 years, assuming pipes are replaced at the end of their useful lives and systems are expanded to serve growing populations. This level of investment will drive up the cost of water, in some cases tripling household water bills. In some jurisdictions, regulatory compliance is an additional driver for investment in smart water solutions. In some instances, regulators are mandating stricter environmental standards, although these regulations often have a larger impact on the wastewater segment of the industry. In other cases, regulators are setting leakage reduction targets and imposing fines for failure to comply. This is currently the situation in the U.K. water industry, where the regulator, Ofwat, forced one water utility to repay GBP 5 million to its customers after missing its 2010 2011 leakage target. The State of California's Water Conservation Act of 2009 set an overall goal of reducing per capita urban water use by 20% by 2020 with an incremental goal of reducing per capita water use by at least 10% by 2015. Starting in 2016, urban water utilities that do not meet the regulatory requirements will not be eligible for state water grants or loans. One additional factor driving interest in smart water solutions is the relationship between water and energy often referred to as the energy-water nexus. It takes a large amount of energy to extract, treat, store, and transport water. Indeed, approximately 15% of a typical water utility's operations and maintenance (O&M) expenses are for energy. At the same time, a large amount of water is used in the Page 2 #EI235229 2012 IDC Energy Insights

production of energy particularly as cooling water for power plants and for hydraulic fracturing or "fracking" in oil and gas drilling. Energy costs for water utilities are rising, especially for electricity used during peak demand periods. As a result, water utilities are looking for ways to reduce their energy costs. They are also involved in looking for ways to reduce water consumption by the energy industry. THE APPROACH The problems of water stress and aging infrastructure, along with regulatory mandates, are driving water utilities to consider solutions that can reduce water losses and enable water conservation. These solutions are based on smart technology including sensors, smart meters, wireless communication networks, "big data" management, and analytics. Smart water metering involves deploying smart meters, connected via fixed networks, at residential, commercial, and industrial customers (see domestic meter, larger meter, and bulk water meter in Figure 1) to support both conservation and leak reduction goals. Smart water network management involves the use of smart technology to optimize the operations and maintenance of water supply networks and may include deploying smart meters at the district, zone, and point-of-production levels, as well as sensors along transmission and distribution mains (see Figure 1), also connected via wireless communications networks, to support water loss reduction. 2012 IDC Energy Insights #EI235229 Page 3

FIGURE 1 Water Supply System Source: Queensland Environmental Protection Agency and Wide Bay Water Corp., 2004 Smart Water Metering Water meters, which measure the volume of water usage, are widely although not universally deployed throughout the world to determine water bills for consumers. Although there is no standardized approach to water pricing structures, globally, most water tariffs involve an element of volumetric pricing. In areas that suffer from water scarcity or shortages, increasing block tariffs (in which rates increase as more water is used) are also sometimes employed to encourage consumers to reduce usage. However, in general, consumers have typically shown little awareness or interest in controlling their water consumption as water is often underpriced, bills are typically issued after use, and water meter readings are often inaccurate and made infrequently. Furthermore, for practical and economic reasons, submetering in multitenant buildings is rare. Page 4 #EI235229 2012 IDC Energy Insights

Smart water metering solutions, which are in many ways analogous to advanced metering infrastructure (AMI) solutions adopted by the electric utility industry, provide capabilities beyond both manual metering and automated meter reading (AMR) approaches. Specifically, smart water metering solutions provide: Two-way communications to the meter, typically over a fixed wireless network Collection of interval usage data (typically hourly) On-demand meter reads Meter data management including automated validation, editing, and estimation (VEE) and calculation of billing determinants Analytics that can be applied to usage and event data as well as other external data such as weather Integration with other utility IT systems such as customer care and billing Benefits One of the major potential benefits of smart water metering solutions is to enable utilities and their customers to reduce water consumption. This benefit is clearly of interest to utilities operating in geographic areas experiencing current or forecast water stress. Smart water metering solutions can enable water conservation through more accurate metering and billing, support for the implementation of new rates and tariffs, and the provision of more detailed usage and cost data to consumers. Studies posit that utilities can enable 5 15% reductions in water consumption by providing their customers with information that not only identifies household consumption during the billing period but compares the usage with the same period in the previous year, with households of a similar size, and with best practice levels. Another potential way of reducing consumption is by providing utilities with analytics to help monitor and enforce water restrictions such as outdoor watering bans or odd-even day rotation schemes. Analytics applied to smart meter data can provide another benefit by helping utilities detect water leaks on the customer side of the meter. For instance, if hourly usage never drops to zero for residential customers, then it's likely there is a leak somewhere on the customer's premises. More advanced analytics can be used to detect leaks for commercial and industrial customers' premises. Once a utility detects a leak, it can proactively notify the customer of the situation or even offer assistance in fixing the leak. This benefits the utility by contributing to loss reduction and the customer because fixing the leak will lower the customer's bill. 2012 IDC Energy Insights #EI235229 Page 5

Both of these benefits reducing consumption and detecting leaks contribute to a secondary benefit, which is an improvement in customer satisfaction. Finally, although not unique to smart water metering solutions, reduced operations and maintenance costs through the elimination of manual meter reading and reduced truck rolls for off-cycle reads and for disconnect orders can be claimed as a benefit, especially if the utility has not already implemented an AMR solution. Vendors A partial list of the major players in the smart water metering solutions market includes companies with roots in metering and AMI such as: Aclara Arad Technologies Badger Meter Elster Itron Landis+Gyr (Ecologic Analytics) Mueller Systems Neptune Technology Group Sensus The market also includes large IT product and service vendors such as: Capgemini Cisco IBM Oracle Case Study Examples The City of Dubuque, Iowa, has a population of 60,000 and has a stated vision, through its Sustainable Dubuque initiative, to make the city a viable, livable, and equitable community that embraces economic prosperity, social/cultural vibrancy, and environmental integrity to create a sustainable legacy for generations to come. Water conservation is a key element of this initiative and, in 2010, the city Page 6 #EI235229 2012 IDC Energy Insights

started replacing existing water meters with smart meters for 23,000 homes and small businesses. The city's aim was to establish a new baseline for water consumption, educate citizens about water conservation, and reduce overall water usage. A pilot program provided over 300 Dubuque households with information, analysis, insights, and social computing around their water consumption to test the hypothesis that informed and incented citizens would be able to conserve water more efficiently. The pilot was in operation over a period of three months, and results validated this hypothesis and led to the decision by Dubuque to expand this pilot to an additional 4,000 Dubuque households. Water savings were measured by comparing and contrasting the consumption of the 151 pilot households with another 152 control group households with identical smart meters but without access to the analysis and insights provided by the water pilot study for the nine-week duration. The customers in the pilot conserved an estimated total of 89,090 gallons of water over a nine-week period, with an average savings of 6.6% per household. If extrapolated to a full year, this would be a savings of 514,742 gallons in total, or 3,409 gallons per household annually. Assuming that the 151 households are a fair sample of the city of Dubuque, the aggregate annual water savings across 23,000 households with smart meters in the city would be 64,944,218 gallons. This would translate into an aggregate water bill saving of $190,936 a year in total. Technology vendors involved in the pilot included IBM, Neptune Technology Group, and ESRI. Redwood City, California, was feeling the effects of a three-year drought that had stressed the volume of water the city buys annually for its 83,000 water customers. Redwood City historically used more water annually than its supplier was obligated to sell to it, and city officials knew that unless they took proactive measures, heavy rationing and penalties for overuse were the next steps. The city made initial attempts at water budgeting by focusing on providing customers with monthly usage and rate reports, but these measures prompted customer complaints because results were released after water was already used. Redwood City knew that a viable water conversation program required access to real-time meter readings that would give customers a reliable method to view their usage on demand, thereby encouraging customers to make proactive changes in consumption. The city created a program, designed for irrigation customers, called the "Budget-Based Rates Program." It designated a specific amount of water each customer should use in a month. Customers that stayed in line with estimates paid the lowest of three rate tiers. Those that consumed more than the budgeted amount paid higher rates, depending on the amount of overuse. However, because the program was designed to offer changing budget usage depending on the weather, a smart water metering system was required that could provide near-real-time data collection and analytics something with more flexibility than what the current monthly meter reading technology offered. The city implemented a smart water metering 2012 IDC Energy Insights #EI235229 Page 7

system including analytics that detail usage, time of use (TOU), and leak detection and used an in-house team to create a Web-based tool to calculate the irrigation customer's water budget, based on weather patterns and how much water a customer's landscape needs in any given day. The budgeting process also factors in the size of the family and property, whether a swimming pool is present, and landscape designs. The conservation program saved more than 80 million gallons of water about 15% in 2009 compared with water usage in the previous year. Some irrigation customers reduced their budgets and bills by up to $75,000. The program earned a 2009 Silicon Valley Water Conservation "Innovation" Award. Redwood City used a Sensus smart water metering solution to support this initiative. Smart Water Network Management Water loss from aging leaky infrastructure (real water loss) is a major contributing factor to water stress. Water utilities face increased O&M costs associated with reacting to leaks or burst pipes, increased energy costs for transporting water, and high capital expenditures for replacing infrastructure. When these factors are combined with inaccurate metering and billing and water theft (apparent water loss), this means a significant portion of water does not generate revenue, termed as non-revenue water. According to the World Bank, NRW typically averages between 15% and 40% and can reach as high as 60% and 70% in some developing countries. Early leak detection and pressure management in water distribution networks are key to reducing real water loss. Water utilities typically use supervisory control and data acquisition (SCADA) systems to monitor flow and pressure at a few major points in water distribution networks. However, the most widely deployed leak control strategies are still manual and labor intensive and involve trained and experienced engineers assessing the acquired data and making regular sweeps of the network to observe changes in physical properties (noise, temperature, etc.) that occur when a pipe leaks. Pressure management strategies typically involve using pressure reducing valves to achieve more consistent pressure levels to prevent bursts. However, the valves are still adjusted manually and are not changed frequently. Like smart water metering, smart water network management solutions have an analogy to the smart grid; in this case, the analogy is to distribution management system (DMS) solutions. DMS solutions are an assembly of distribution network monitoring and control system applications and functionality operated through a control center and based on a common network model. The DMS, which typically includes an underlying SCADA system, monitors and controls the electric power distribution network of substations, feeders and, increasingly, field equipment and devices. In advanced environments, Page 8 #EI235229 2012 IDC Energy Insights

the distribution management technology optimizes electric delivery, integrates with enterprise systems, and streamlines field processes with accurate and actionable data. The system's value improves reliability, power quality, and power efficiency. Smart water network management solutions can include: Smart water meters at the district, zone, and point-of-production levels Sensors (e.g., pressure, flow, noise) along transmission and distribution mains Fixed communications networks connecting meters and sensors Hydraulic models that simulate the dynamics of the network including pipes, pumps, valves, and storage to facilitate system optimization Analytics that can detect and locate leaks and bursts or provide visibility into other network and equipment anomalies Intelligent pressure management applications to self-calibrate and automate pressure optimization Integration to SCADA, enterprise asset management (EAM), geographic information system (GIS), mobile workforce management, and other systems Benefits The major potential benefit of smart water network management solutions is water loss reduction. This can be achieved through the automated detection of leaks and bursts associated with the distribution network and through active pressure management and network optimization. Pressure management can be used to reduce the pressure on leaking sections of pipe while maintaining overall system balance. Studies by universities and utilities have indicated that a small reduction in pressure can translate into a significant reduction in leaks, with the potential to reduce system leakage by 15 50%. Another potential benefit of network optimization is reducing energy costs. If utilities can shift activities like pumping to off-peak energy demand periods, then they can reduce energy costs by minimizing demand charges or higher costs associated with time of use (TOU) rates. Analytics can also be used to more accurately prioritize infrastructure maintenance, repair, and replacement plans, enabling utilities to defer capital spending associated with aging infrastructure. 2012 IDC Energy Insights #EI235229 Page 9

Vendors A partial list of major players in the smart water network management solutions market includes large industrial automation and IT vendors such as: ABB IBM Schneider Electric (including Telvent) Siemens Additionally, the market includes hydrologic modeling and analytics software vendors such as: Advantica Water Bentley Systems Derceto i2o Water MWH Soft TaKaDu Also included are vendors of sensor-based systems for leak detection such as: Echologics (a division of Mueller) Pure Technologies Syrinix Case Study Example Yarra Valley Water is the largest of three retail water businesses providing water supply and sewerage services to over 1.6 million people, 660,000 properties, and over 50,000 businesses in the northern and eastern suburbs of Melbourne, Australia. The utility has rolled out a smart water network management solution that provides real-time monitoring of the utility's 9,000km of water mains. High water costs and a constant effort to reduce NRW require stringent control over supply, pressure, and network efficiency. Yarra Valley Water had been investigating the use of real-time data for automated monitoring ever since dividing its network into 140 water distribution zones. Hundreds of flow and pressure sensors have been deployed as part of this Page 10 #EI235229 2012 IDC Energy Insights

network division. To process and analyze this volume of data, Yarra Valley Water was no longer able to rely on human analysts to canvass all meter readings in search of anomalies. The utility decided to implement a network monitoring solution delivered as a cloud service. This network monitoring solution was rolled out to 3,000km of mains before being declared a success and extended to the entire network. In March 2011, Yarra Valley Water began incorporating smart water network management into its NRW programs. Initial results were very positive: during the three-month period from June to August 2011, the utility was able to detect several large leaks, receiving alerts 14 days earlier on average than it would have without the solution. Even alerts regarding large bursts were received one day earlier than before. Direct benefits from the three-month small-scale rollout amounted to 70 megaliters saved, totaling 60,000 AUD, and the utility identified additional benefits such as the ability to detect meter faults and malfunctions and validate hydraulic models in real time. Some of the monitored zones have more than one meter in them, allowing the utility to receive pinpointed geolocation information, saving the detection crews up to two-thirds of the typical detection time. Encouraged by these early results, Yarra Valley Water decided to add pressure loggers to some of the previously sparsely metered zones, and this also yielded improved location results in these fairly large zones. The cloud-based network monitoring service was provided by TaKaDu. Challenges Water utilities considering investments in smart water solutions face a number of challenges. First, and in many cases foremost, water utilities are facing large capital requirements for the replacement of aging infrastructure. It is not uncommon for utilities to view capital requirements for infrastructure replacement and smart water solutions as competing with each other. When that is the case, the capital requirements for infrastructure replacement typically "win" the battle for funding. To complicate matters, unlike the capital costs for a new water treatment plant or storage facility, which are incurred for a short duration and then are not faced again for many years, the capital requirements for infrastructure replacement are spread over decades, forcing a "pay as you go" approach that makes this competition for funding a continuous rather than a one-time challenge. In a 2009 survey of 300 water utility managers in North America sponsored by Oracle, cost was the top concern for utilities that were considering or implementing smart water metering. However, utilities should take into consideration that smart water solutions such as pressure management can actually help extend the life of existing assets, thus deferring some of the capital requirements for replacement. Additionally, smart water solutions focused on leak detection can help prioritize infrastructure replacement plans, thus improving the overall business case. Finally, when infrastructure replacement occurs, utilities 2012 IDC Energy Insights #EI235229 Page 11

can make the new infrastructure smart by building sensors and communications capabilities into their replacement plans. A second challenge facing water utilities is that there is little history with smart water solutions upon which to base business decisions. Utilities are by nature conservative organizations that are focused on providing secure, reliable, and high-quality water supply to their customers. They are not typically early adopters of new processes or technology, and when they do adopt something new, it is within a strong risk management framework. The fact that there are only a small number of published business cases for smart water solutions and only a few case study examples of utilities that have deployed smart water solutions makes the evaluation and adoption of these solutions a considerable challenge. In the previously cited survey sponsored by Oracle, lack of cost recovery or measurable return on investment (ROI) was cited as the top roadblock to implementing smart water meter technology. Utilities can address this challenge by running pilot projects to test the business case, business process, and technology. However, utilities should avoid falling into the trap of endless pilots that are often an excuse for not making a decision. Pilot projects should have a clearly defined scope, schedule, and outcome that drive a go/no-go decision on a wider deployment. Finally, utilities should take advantage of the information sharing opportunities presented by the emerging focus on smart water solutions by established industry trade groups like the AWWA in the United States and by new associations like the Smart Water Networks (SWAN) Forum and the Water Innovations Alliance (WIA). The availability and maturity of smart water solutions pose further challenges to utilities. Many of the solutions on the market are either from small start-up vendors or are based on new technologies such as sensors and advanced analytics, even if they are developed by large established vendors. A contributing factor to this challenge has been that some of the smart water solution vendors have been strongly focused on the smart grid market for the past 5 10 years and have only recently started to focus on the smart water market. However, this situation can help address the challenge since these vendors have learned valuable lessons from smart grid solutions implementations that can be applied to smart water solutions. Having a strategy and a road map for smart water solutions that integrate with a higher-level business strategy for sustainability or some other enterprise vision will also help address this challenge. FUTURE OUTLOOK The smart water market is still in an early stage characterized by high levels of interest, low deployment rates, and a certain amount of hype. However, lessons from the development of the smart grid market can be applied to the smart water market to inform its future outlook. Page 12 #EI235229 2012 IDC Energy Insights

We believe that the growth rates for smart water metering will be slower than the growth rates experienced with smart metering for electricity, at least in the North American and European regions. Smart metering deployments by electric utilities were strongly driven by regulatory or policy mandates and, at least in the United States, by government stimulus funding. It can be argued that the combination of mandates and stimulus funding effectively forced electric utilities to prioritize smart metering projects ahead of other smart grid investments. Assuming that similar mandates and stimulus funding will not impact the smart water market, growth rates will be driven primarily by business needs, especially by water conservation and leak detection on the customer side of the meter. Successful business cases for smart water metering will need to include not just the provision of detailed consumption information to consumers but also new rates that provide an incentive to reduce consumption. The emergence of more widespread regulatory requirements like the California Water Conservation Act could accelerate the growth of this market. Our expectation is that adoption rates for smart water network management solutions will outpace growth rates for smart water metering. The business case for smart water network management solutions is more straightforward since it does not rely upon changes in consumer behavior just the achievement of loss reduction and energy saving targets. Smart water network management solutions also typically have lower capital costs since they do not require the replacement or retrofitting of all customer meters. Additionally, the deployment of new technology for water distribution networks falls squarely in the utility engineering and operations "comfort zone," making it feel less risky. However, the technology in this market is less mature than smart water metering and a lack of or delay in proven results could result in slower growth rates. Future additions to smart water solutions will likely include capabilities aimed at water quality such as ph sensing and avoidance of backflow as well as integration between utility smart water technologies and smart water technologies implemented by large water consumers in the commercial, industrial, and agricultural segments of the market. ESSENTIAL GUIDANCE Actions to Consider Utilities should: Develop long-term smart water strategies that integrate smart water technology investment plans with the organization's higher-level strategies for sustainability, capital investment in infrastructure, or other overarching goals. While it is okay to deploy a smart water 2012 IDC Energy Insights #EI235229 Page 13

solution to address a specific issue like leak detection, the lack of a long-term strategy can lead to a lower overall return on investment and a lack of coordination across multiple lines of business. Apply best practices from lessons learned by electric utilities in their smart grid deployments. Although electricity and water networks are not identical, issues such as the importance of customer engagement, new approaches with regulators and policy makers, the potential for smart meter opt-outs, and the role of emerging technologies such as cloud services, big data and analytics, mobility, and social media should be incorporated into smart water strategies. Run pilot projects to understand technology capabilities, assess risks and prove business cases, but don't get caught in the endless pilot trap. Pilot projects should have a clearly defined scope, schedule, and outcome that drive a go/no-go decision on a wider deployment. LEARN MORE Related Research Best Practices: Thames Water Adopts BPMS Solution to Streamline Its Customer Services, with Wipro as Systems Integrator (IDC Energy Insights #EIOS05T, August 2011) Synopsis This IDC Energy Insights report provides an overview of the smart water market, which is emerging as a similar and parallel market to the already established smart grid market. The threat of water scarcity or shortages and the need to manage aging infrastructure are driving water utilities and other organizations responsible for water supply to consider smart technology based solutions to reduce water losses and enable water conservation. However, current deployment rates of these solutions are low because of a lack of understanding regarding the business case for investment, few successful case study examples, issues with technology availability and maturity, and the fragmented nature of the water utility market. "Water utilities considering whether or not to invest in smart water solutions must understand the current and projected capabilities of, the potential benefits and risks associated with, and the experiences of other utilities in deploying these smart water solutions," stated Rick Nicholson, group vice president, IDC Energy Insights. Page 14 #EI235229 2012 IDC Energy Insights

Copyright Notice Copyright 2012 IDC Energy Insights. Reproduction without written permission is completely forbidden. External Publication of IDC Energy Insights Information and Data: Any IDC Energy Insights information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Energy Insights Vice President. A draft of the proposed document should accompany any such request. IDC Energy Insights reserves the right to deny approval of external usage for any reason. 2012 IDC Energy Insights #EI235229 Page 15