The Growing Enterprise Energy Management Market

Global business spending on application software in 2010 was $168 billion. Of that, only $163 million was spent on enterprise carbon and energy management systems (ECEM). Vendors in this market, however, report an average annual growth of 235% since inception. Taking the launch of the Apple App store in 2008 to be the start of this market, revenues in this space have more than doubled from 2009 to 2010. As the technology matures and mobile platforms proliferate, adoption rates are expected to increase. The smart phone is truly transforming the way businesses think about energy management.

According to a Forrester Market Analysis, the ECEM industry is expected to grow at a CAGR of 83%, reaching $903 million in 2013(1). The report goes on to say that North America and Europe will provide the major market opportunities and that manufacturing, utilities, and the public sectors will provide the most significant areas for growth. The following graph from the report provides a more specific brake-down:



Though a $1 billion market will represent significantly less than 1% of the mobile application software market in this aggressively growing space, it certainly provides a significant opportunity for developers and vendors to provide valuable and demanded services. Given the relatively young nature of the industry and the low barriers to entry, one can reasonably anticipate quite a bit of market crowding to occur over the next few years. Things will get interesting once the big players (e.g. Microsoft, Google) find ways to effectively enter the scene. Even if they are unable to do so successfully, expect market consolidation as dominant players emerge.

NOTES:
(1) Data and Image from a December 2010 Forrester Report: The Evolution of Enterprise Carbon and Energy Management Software. Available here:
http://www.ca.com/~/media/Files/IndustryAnalystReports/forrester_evolution_of_enterprise_carbon_and_energy_management.pdf