1 market analysis & strategic outlook for real-time automation & controls (rtac) in the...

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“Market Analysis & Strategic Outlook forReal-time Automation & Controls (RTAC) in the North

American Water/Wastewater Utility Marketplace”

PRESENTED BY

Mike Marullo, Director-Strategic Market R&D

InfoNetrix LLC

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Today’s Presentation Topics

Marketplace Characteristics Market Horizons™ Research Principal Market Factors Future Market Perspectives Supplier Dynamics

Marketplace Characteristics Market Horizons™ Research Principal Market Factors Future Market Perspectives Supplier Dynamics

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Marketplace Characteristics

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Water Treatment

Plant

BoosterPumps

SewageTreatment

Post TreatmentStorage

Water PipesSewer Pipes

Reservoir

Ground WaterWells

River

Source Treatment Distribution Sewer/Treatment DischargeSource Treatment Distribution Sewer/Treatment DischargeSource Treatment Distribution Sewer/Treatment DischargeSource Treatment Distribution Sewer/Treatment Discharge

Courtesy of Sandia National Laboratories, Albuquerque, NM

WWMS Infrastructure ModelWWMS Infrastructure Model

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Water/Wastewater Marketplace Approximately 170,000 U.S. public water

systems* Plus: Municipal wastewater systems

(thousands) Large utilities (serving 100,000 people or

more) spend the majority of $$$ annually Smaller utilities reluctant to spend due to

severe financial constraints

(*SOURCE: USEPA)

Water/Wastewater Marketplace Approximately 170,000 U.S. public water

systems* Plus: Municipal wastewater systems

(thousands) Large utilities (serving 100,000 people or

more) spend the majority of $$$ annually Smaller utilities reluctant to spend due to

severe financial constraints

(*SOURCE: USEPA)

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WATER SYSTEM TYPE NO. OF SITES POP. SERVED (Mil)

CWS: Community water system; year round operation

54,064 263.9

NTNCWS: Non-transient, non-community water system

(buildings, factories, etc.); 6 months/year

19,738 6.9

TNCWS: Transient, non-community water system

(campgrounds, gas stations, etc.); short durations

93,210 12.9

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2615

265

119

309

10K-50K50K-75K75K-100K100K+

POPULATION SIZEPOPULATION SIZE

CWS Utilities (by Population Served)

SOURCE: USEPAOVER 3,300 CWS SERVING

POPULATIONS OF 10K+

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Water/Wastewater Management Solutions (WWMS)REAL-TIME AUTOMATION & CONTROLS (RTAC)

WC&TWC&TWS&DWS&D

WC&TWC&TWS&DWS&D

WC&TWC&TWS&DWS&D

SCADA

PAS

FDD

SCADA-Supervisory Control & Data Acquisition • PAS-Process Automation Systems • FDD-Field Data Devices

WS&D-Water Supply & Distribution • WC&T- Wastewater Collection & TreatmentSCADA-Supervisory Control & Data Acquisition • PAS-Process Automation Systems • FDD-Field Data Devices

WS&D-Water Supply & Distribution • WC&T- Wastewater Collection & Treatment

RTAC Forecasting & Analysis ModelRTAC Forecasting & Analysis Model

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RTAC Market Composition SCADA: Supervisory Control And Data Acquisition

Water Supply & Distribution Automation Wastewater Lift Station Monitoring

PAS: Process Automation Solutions Water Purification Plant Automation Wastewater Treatment Plant Automation

FDD: Field Data Devices RTUs & “RTU-like” Data Acquisition & Control Devices DCS nodes and Intelligent Electronic Devices (IEDs) for

applications above (e.g., PLCs, etc.)

RTAC Market Composition SCADA: Supervisory Control And Data Acquisition

Water Supply & Distribution Automation Wastewater Lift Station Monitoring

PAS: Process Automation Solutions Water Purification Plant Automation Wastewater Treatment Plant Automation

FDD: Field Data Devices RTUs & “RTU-like” Data Acquisition & Control Devices DCS nodes and Intelligent Electronic Devices (IEDs) for

applications above (e.g., PLCs, etc.)

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Market Horizons™ Research

Strategic Market Research

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Come on! It can‘t go

wrong every time...

Market forecasting should NOT be a hit-or-miss proposition!Market forecasting should NOT be a hit-or-miss proposition!

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Market Research Timeline & Report Schedule

JUN 01: Finalize Research Plan & Forecasting Model

JUN 15: Start Primary & Secondary Research (AWWA Conf)

AUG 15: Begin Research Compilation & Analysis

SEP 30: Develop Key Findings & Market Forecasts (Draft Rpt)

OCT 15: Final Report Documents

NOV 15: Report posted to InfoNetrix website for client access

Market Research Timeline & Report Schedule

JUN 01: Finalize Research Plan & Forecasting Model

JUN 15: Start Primary & Secondary Research (AWWA Conf)

AUG 15: Begin Research Compilation & Analysis

SEP 30: Develop Key Findings & Market Forecasts (Draft Rpt)

OCT 15: Final Report Documents

NOV 15: Report posted to InfoNetrix website for client access

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Avoid the R.F.A. Approach!Avoid the R.F.A. Approach!

Ready…

Fire!

…Aim?

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Some Uses for Strategic Market Research Decisions on new business, market or application initiatives

Foundation for launching new products or services

Expanding or otherwise changing your geographical presence

Planning & executing mergers, acquisitions or divestitures

Diversification into new markets or business areas

Learn wants, needs & expectations of your market (or new ones)

Develop realistic penetration & market share analyses

Understand market changes & how you will be affected/respond

Identify required resources and critical success factors

Some Uses for Strategic Market Research Decisions on new business, market or application initiatives

Foundation for launching new products or services

Expanding or otherwise changing your geographical presence

Planning & executing mergers, acquisitions or divestitures

Diversification into new markets or business areas

Learn wants, needs & expectations of your market (or new ones)

Develop realistic penetration & market share analyses

Understand market changes & how you will be affected/respond

Identify required resources and critical success factors

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Market Horizons™ Research Template Market: North American (US & Canada) Water/Wastewater Utilities

Focus: Water/Wastewater Management Solutions (WWMS)

Scope: Real-time Automation and Controls (RTAC)

Coverage: SCADA; PAS; FDD

Related Apps: GIS; AMR

Financial: Bookings (NOT Billings or Shipments); Constant 2002 USD

Period: Base Year 2002; Forecasts 2003-2007; Calendar Year Basis (January-December)

Forecast: 2003-2007 (Calendar Year Basis)

Confidentiality: No information individually disclosed to third-parties

Market Horizons™ Research Template Market: North American (US & Canada) Water/Wastewater Utilities

Focus: Water/Wastewater Management Solutions (WWMS)

Scope: Real-time Automation and Controls (RTAC)

Coverage: SCADA; PAS; FDD

Related Apps: GIS; AMR

Financial: Bookings (NOT Billings or Shipments); Constant 2002 USD

Period: Base Year 2002; Forecasts 2003-2007; Calendar Year Basis (January-December)

Forecast: 2003-2007 (Calendar Year Basis)

Confidentiality: No information individually disclosed to third-parties

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Market Research Plan Primary Research (25-30 Interviews)

Suppliers

Consultants

TPPs (Third-party Participants)

Secondary Research

Business Horizons™ Utility Surveys (1,000 annually)

Public & Proprietary Databases

On-line Resources (Web/Internet/Intranets)

Professional Associations, Meetings, Conferences & Symposia

Industry Trade Press & Publications

Users & Other Market Participants

Market Research Plan Primary Research (25-30 Interviews)

Suppliers

Consultants

TPPs (Third-party Participants)

Secondary Research

Business Horizons™ Utility Surveys (1,000 annually)

Public & Proprietary Databases

On-line Resources (Web/Internet/Intranets)

Professional Associations, Meetings, Conferences & Symposia

Industry Trade Press & Publications

Users & Other Market Participants

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WWMS-RTAC Report ContentsWWMS-RTAC Report Contents

1: Executive Summary

2: Marketplace Characteristics

3: Market Drivers, Issues & Trends

4: Market Size & Growth Outlook

5: Supplier Environment

Appendices

WWMS-RTAC Report ContentsWWMS-RTAC Report Contents

1: Executive Summary

2: Marketplace Characteristics

3: Market Drivers, Issues & Trends

4: Market Size & Growth Outlook

5: Supplier Environment

Appendices

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Principal Market Factors

Market Drivers, Issues & Trends

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Principal Market Factors

The The 7 SIGNS7 SIGNS OF MARKET EVOLUTION OF MARKET EVOLUTION

1: Regulatory Policy & Governance

2: Economics & Investment

3: Technology, Standardization & Integration

4: Data Integrity & System Security

5: Web & Wireless Solutions

6: Enterprise Asset Management (EAM)

7: Customer Care & Satisfaction

The The 7 SIGNS7 SIGNS OF MARKET EVOLUTION OF MARKET EVOLUTION

1: Regulatory Policy & Governance

2: Economics & Investment

3: Technology, Standardization & Integration

4: Data Integrity & System Security

5: Web & Wireless Solutions

6: Enterprise Asset Management (EAM)

7: Customer Care & Satisfaction

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1. Regulatory Policy & Governance

Role of regulatory bodies, local/state/national government and other authorities in how the market is shaped and evolved by these pervasive external forces

Role of regulatory bodies, local/state/national government and other authorities in how the market is shaped and evolved by these pervasive external forces

SIGNSSIGNS

of Market Evolution

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2. Economics & Investment

How this market is

viewed from a business and

financial perspective by

current and prospective

participants including

suppliers, consultants and

the utility business

community at large

How this market is

viewed from a business and

financial perspective by

current and prospective

participants including

suppliers, consultants and

the utility business

community at large

SIGNSSIGNS

of Market Evolution

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3. Technology, Integration & Standardization

Impact of technological advancements; system and application integration tools and methods; and evolving standards affecting the market in both short- and long-term

Impact of technological advancements; system and application integration tools and methods; and evolving standards affecting the market in both short- and long-term

SIGNSSIGNS

of Market Evolution

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4. System Integrity & Data Security

Explores current and emerging

concerns about new challenges

stemming from various factors:

Web vulnerability

Wireless Connectivity

Corporate I/T networks for real-time

use

Information accessibility by non-

operations personnel

Corporate I/T network prioritization

and preferences

Explores current and emerging

concerns about new challenges

stemming from various factors:

Web vulnerability

Wireless Connectivity

Corporate I/T networks for real-time

use

Information accessibility by non-

operations personnel

Corporate I/T network prioritization

and preferences

SIGNSSIGNS

of Market Evolution

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5. Web & Wireless Solutions

The Web is the future, but:

Major security issues to be overcome

Ongoing skepticism about reliability

Control via the Web?

Wireless goals must (& will) be won!

Security risks can offset benefits

Potential driver for projects

‘New’ bandwidth being made

available ~5GHz (802.11a usage)

Increasingly broader, deeper data

access and distribution demands

The Web is the future, but:

Major security issues to be overcome

Ongoing skepticism about reliability

Control via the Web?

Wireless goals must (& will) be won!

Security risks can offset benefits

Potential driver for projects

‘New’ bandwidth being made

available ~5GHz (802.11a usage)

Increasingly broader, deeper data

access and distribution demands

SIGNSSIGNS

of Market Evolution

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6. Enterprise Asset Management

Ongoing evaluations of how

real-time data moves from the

field onto the business desktop

and into the boardroom as

businesses strive to: Do more with less

Estimate complex asset values

Preserve & optimize asset

investments

Turn asset investments into

critical success factors

Ongoing evaluations of how

real-time data moves from the

field onto the business desktop

and into the boardroom as

businesses strive to: Do more with less

Estimate complex asset values

Preserve & optimize asset

investments

Turn asset investments into

critical success factors

SIGNSSIGNS

of Market Evolution

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7. Customer Satisfaction & Service

Market forces drive improvements

and investments… NOT technology!!

OMS - Becoming the “Killer App”

PBR - Gaining ground

New CIS upgrades will require a

multi-level focus incorporating: AMR PAS EAM GIS SCADA Etc.

Mobile workforce considerations

Market forces drive improvements

and investments… NOT technology!!

OMS - Becoming the “Killer App”

PBR - Gaining ground

New CIS upgrades will require a

multi-level focus incorporating: AMR PAS EAM GIS SCADA Etc.

Mobile workforce considerations

SIGNSSIGNS

of Market Evolution

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Future Market Perspectives

Market Outlook (2003-07)

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Post-9/11 General Economic EnvironmentPost-9/11 General Economic Environment

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General Market Trends Aging infrastructure driving up demand for solutions that are not:

Capital-intensive Labor-intensive Environmentally disruptive Unnecessarily complex

Smaller utilities are becoming more savvy, AND… Digital automation is more affordable each year! Result is a growing influx of smaller projects

Strong price focus (often cash-strapped municipals) Preference for standardized approach (off-the-shelf mindset) Sparse use of consultants

Hard to reach using traditional system sales methods

General Market Trends Aging infrastructure driving up demand for solutions that are not:

Capital-intensive Labor-intensive Environmentally disruptive Unnecessarily complex

Smaller utilities are becoming more savvy, AND… Digital automation is more affordable each year! Result is a growing influx of smaller projects

Strong price focus (often cash-strapped municipals) Preference for standardized approach (off-the-shelf mindset) Sparse use of consultants

Hard to reach using traditional system sales methods

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“80/20 Rules” Of the ~54,000 U.S. Community Water Systems

(CWS) about 3,700 serve 80% of the US population Well over 2/3 of the U.S.population drinks surface

water, BUT… Almost 80% of the 54,000 CWS rely on groundwater

“80/20 Rules” Of the ~54,000 U.S. Community Water Systems

(CWS) about 3,700 serve 80% of the US population Well over 2/3 of the U.S.population drinks surface

water, BUT… Almost 80% of the 54,000 CWS rely on groundwater

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$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2002 2003 2004 2005 2006 2007

PASSCADAFDD

~$30M~$60M ~$160M

WWMS-RTAC Preliminary Market Estimates

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Supplier Dynamics

Supplier Dynamics

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Supplier Dynamics

Supplier & Sales Channel TrendsSupplier & Sales Channel Trends Fewer ‘single-function’ suppliers; more ‘cross-

functional’ integration focus (SCADA/PAS/FDD) Suppliers must be able to address rapidly evolving

Enterprise Asset Management (EAM) issues Some suppliers rethinking WWMS-RTAC; expect a

more service-oriented approach Increased use of sales reps & distributors

Increasingly standard field devices (commoditization) Growth of “small utility” component (MUNIs & RECs)

Supplier & Sales Channel TrendsSupplier & Sales Channel Trends Fewer ‘single-function’ suppliers; more ‘cross-

functional’ integration focus (SCADA/PAS/FDD) Suppliers must be able to address rapidly evolving

Enterprise Asset Management (EAM) issues Some suppliers rethinking WWMS-RTAC; expect a

more service-oriented approach Increased use of sales reps & distributors

Increasingly standard field devices (commoditization) Growth of “small utility” component (MUNIs & RECs)

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Summary (Q&A)

A “Summery” Conclusion

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“Market Analysis & Strategic Outlook forReal-time Automation & Controls (RTAC) in the North American

Water/Wastewater Utility Marketplace”

Enjoy the AWWA Conference!

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How well you focus…

…will determine your reality

Albuquerque • Atlanta • Birmingham • New Orleans • Phoenix • Pittsburgh • Sacramento • San Francisco • San Jose • Midlands (UK)

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