Cool Vendors in Green IT and Sustainability, 2012
We look at some Cool Vendors in some currently hot areas like building energy efficiency and strategic energy management. We also look at some emerging areas that will become critical around sustainable supply chain management and material, energy, and cost flow analytics.
- Energy management remains the area of greatest current sustainable business activity and investment, but with greater emphasis on manufacturing systems and the built environment.
- Energy management is increasingly being complemented by a greater level of analytics and insight, which is delivering "energy intelligence" and is also seeking to optimize real-time supply and demand dynamics, as well as energy optimization within production systems. Enterprises will increasingly need to exploit this technology.
- Resource efficiency, including waste reduction, will get increased focus.
- Demands on upstream suppliers are increasing, and the chain of custody for products and services will soon require a sustainable or environmental bill of materials, which adds to traditional bills of materials. These trends will increase as regulations stiffen and become more widespread.
- Top-down executive dashboards have failed to deliver much value on their own, and require complementing with the bottom-up detailed asset and production-level analytics and modeling.
- The economic downturn has had consequences to the sustainable business solution landscape, with a number of startups closing their doors or being sold at discounted prices. This market consolidation was necessary and will continue during 2012.
- Holistic sustainable supply chain solutions are some way off, but there are an increasing number of tools that can support aspects of source-make-deliver/logistics functions.
- CEOs in resource-intensive sectors are looking at sustainability as a source of efficiency improvements, innovation and improved collaboration. CIOs should consider how their engagement and support for sustainable business systems will enable such goals.
- Early movers in the acquisition of a sustainable business management system should take stock and re-evaluate their options since the tools and services market has moved on to provide richer capabilities in significantly greater functionality and differentiation, particularly in relation to analytics and real-time or near-real-time energy management.
- Operational executives and supply chain leaders need to think carefully about the rationalization and integration of sustainable business products and services as key intelligence layers and/or ERP elements. Likewise, CIOs in manufacturers need to ensure that their IT platforms support sustainable design and production.
- CIOs must consider what technology support could assist enterprises in supplier disclosures and verifications, and in sustainable product management.
Table of Contents
This research does not constitute an exhaustive list of vendors in any given technology area, but rather is designed to highlight interesting, new and innovative vendors, products and services. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Investment in sustainable business operations remains focused on energy efficiency because of the more immediate, measurable and financially quantifiable business case that underpins it. We would advise enterprises to invest in sustainable business systems, such as energy management, that provide insight and foresight from the executive suite, through the energy manager and facilities/real estate manager, and down to the process engineer. C3 is a solution that will be of great interest to any enterprise wishing to develop a corporate capability in energy strategy and management. Pulse Energy is a solution at the other end of the scale, in terms of solutions that target the operations of the built environment, but it is capable of driving significant efficiencies within a single building or across a portfolio.
For manufacturers wishing to look at ways to take a further step in business performance, and to exploit sustainability for competitive advantage (see "Achieving Competitive Advantage Through the Pursuit of Sustainable Business"), we recommend looking at solutions that improve supply chain transparency and management. iPoint is an established player in the supply chain compliance space that has extended its platform to include sustainability-related performance criteria, which we think is very interesting. We similarly see solutions that enable detailed analysis of energy and material flows tied to cost analysis as being capable of delivering substantial value through improved resource efficiency and waste reduction. Ifu Hamburg is a very economical solution in this area.
San Mateo, California (www.c3-e.com)
Analysis by Stephen Stokes
Why Cool: Even before the public introduction of the company late in 2011, C3 has had a somewhat cool status. Intentionally or otherwise, from early 2009 rumors were widespread of an executive and development team (dominated by Siebel Systems alumni) building an advanced sustainability and energy management tool in stealth mode in Silicon Valley.
There are a number of attributes that contribute to C3 being recognized as a Cool Vendor:
- It enjoys a "triple crown" of critical competencies in relation to the conception, development and execution of enterprise software solutions, the actual successful running and scaled growth of an enterprise software business, and expertise in energy and resource management and strategy.
- It chooses to focus its solutions around three key attributes: energy and resources as critical factors for organizational success in the emerging economic model; the connection between energy use and emissions, and the financial performance of the organization; and the leveraging of sophisticated dashboarding and analytics to enable optimized energy and financial outcomes.
- Whether serendipitous or otherwise, it coordinated the timing and nature of its market engagement in a manner that matched shifts in the market from one that was focused on carbon and reporting to one that was focused on energy management and analysis. It has built out a sophisticated, multitiered ecosystem model for energy management in a variety of value networks, which focus on energy supply as well as demand management. Building out an IT framework that embraces the full end-to-end energy value chain and related emissions and resource consequences is truly innovative in comparison to other similar startups and large enterprise vendors competing in the same space.
- The above differentiators, coupled with a rich network of connections within the technology and energy space, mean that C3 has been something of a "partner du jour" for a wide cross-section of automation (for example, Siemens, GE), technology (for example, HP, IHS), and specialist energy and general service provisioning (for example, SAIC, CH2M Hill, Accenture and Deloitte) vendors.
With this as a growth platform, C3 was quick to establish foundational clients in energy-intensive (for example, Dow), energy production (for example, PG&E) and other sectors. New customer wins over the past two quarters appear to have been sluggish, but at least for now, C3 remains committed to a path of getting it "right" at the appropriate and senior level of client organizations, rather than rushing to sell commoditized sustainability and energy visibility to subexecutive levels of the enterprise organization.
Challenges: Despite all the "coolness" and a substantial war chest of startup funding, C3 has a number of challenges before it will be able to maximize its market potential.
First, there is a need for the market and the regulatory environment to mature and recognize the value of C3's energy intelligence and optimization proposition. The global financial crisis and associated reductions in energy demands and prices, the continued stalling on internationally binding carbon emission regulations, and general corporate inertia mean that C3 is offering a product that many potential clients probably need, but do not yet want — at least not in terms of the full spectrum of modules and capabilities that C3 has to offer.
Second, C3 has three pricing models — based percentage of energy spend/savings, per square foot under management, or per building under management. Pricing has exceeded some prospective customers' budgets, and others remain resistant to the savings-based pricing model until savings and value can be unequivocally demonstrated and attributed to the C3 tools. While this is ruffling feathers in the market, the company should be credited with at least having a pricing framework that is dominated by exception-based pricing.
Third, C3's solutions for enterprise energy intelligence are market leading, but potentially too far ahead of a market currently distracted by getting a grip on supplier and supply chain sustainability performance, and on the basics of the performance of its real estate.
Who Should Care: Energy managers, CFOs, CIOs, CEOs and line-of-business leaders who wish to leverage energy and resource savings to manage risk, reduce the cost to serve and use sustainability for competitive advantage should consider C3.
Hamburg, Germany (www.ifu.com)
Analysis by Simon Mingay and Stephen Stokes
Why Cool: Ifu Hamburg uniquely brings together a number of key value-adding capabilities that allow organizations to analyze, visualize and optimize production processes and products from a resource and a cost optimization perspective. The company offers a life cycle assessment tool and, more recently, a corporate carbon, resource, and materials "footprinting" tool, but what makes it "cool" is its ability to model, analyze, and optimize material, energy, and cash flows in a production system, along with its visualization using Sankey diagrams. Additionally, it offers the ability to model potential changes to the production, consider the options for improvement, and employ sophisticated tools like Monte Carlo simulations. It does this in a fashion that links sustainable and environmental performance closely to product design, process planning and financial analysis. This kind of insight into a production operation will get increasingly important as organizations seek to address spiraling raw material and energy costs, as well as the issues of ecoefficiency.
In existence since 1992, ifu Hamburg has developed a very strong team of subject matter experts, and a strong customer list. The majority of its revenue is derived from consulting and customization engagements combining its subject matter experts and their tools, providing a sound foundation for the strength of the software tools.
Challenges: Ifu Hamburg has been operating in somewhat of a bubble, with a strong focus on Germany and the chemicals industry, despite the products having much greater potential reach. Ifu Hamburg is significantly limited in its ability to scale by a lack of service partners and consulting organizations. It has limited experience to build that network, but will need to choose partners carefully. It also needs to consider its speed of development; with just 20 developers, its ability to develop the product and adapt it to other engineering disciplines is limited at present. The tools are unashamedly aimed at process engineers, but with better interfaces, the information that the Umberto tool manages could be valuable to other roles. Ifu Hamburg has a partnership with WeSustain, which leverages Umberto for corporate sustainability management, but ifu Hamburg should look for further opportunities. The price point of the solutions is surprisingly low, given their capabilities.
Who Should Care: Any manufacturing organization looking to model, analyze and optimize material and energy flows, and the associated costs, should look at ifu Hamburg's tools. We would expect price points to rise quickly as the value of the solutions is recognized and leveraged.
Reutlingen, Germany (www.ipoint-systems.com)
Analysis by Stephen Stokes
Why Cool: Holistic solutions covering sustainable supply chain management remain absent from the marketplace. iPoint has existed since 2001, and its solutions provide a robust and well-tested technology platform for managing environmental compliance and sustainability requirements in complex, discrete and increasingly regulated manufacturing environments. Central to its solution suite is its Compliance Agent and its Sustainability Data Exchange Hub, which act as an integration platform for critical compliance, materials and sustainability data. In essence, iPoint has constructed a strategic information management platform that allows verified tracking, tracing and reporting of components and materials to ensure compliance with national, international or customer- (OEM-) specific environmental and sustainability requirements. The end-to-end (upstream through end of life) tracking of product material components and their environmental and sustainability credentials reduces compliance reporting burdens, minimizes product risk, and allows the integration of environmental and sustainable trade-off analysis during the early product design phase. It may also improve profit margins due to a targeted reduction in materials burdens, energy and resource consumption, or costs associated with end-of-life disposal, which are issues of increasing significance within the automotive, high-tech and other sectors.
iPoint has enjoyed more than a decade of uninterrupted organic growth, substantial traction within the automotive and defense sectors, specifically within the European market, and an increasing number of customers wins in the North American market. The open technical architecture and data integration capacities make it a unique sustainability solution for the integrated manufacturing environment. Ironically, in Europe and elsewhere, the growth of the environmental agenda, associated regulations, and demands and expectations to be placed on manufacturers to deliver more sustainable means of production and associated outcomes have barely begun.
Challenges: The potential market for sustainable compliance and manufacturing systems is very significant, and iPoint will need to undergo significant strategic shifts to maximize this vast technology opportunity. Organic growth alone will not suffice, and iPoint will need to consider a cross-section of new sales channel options and potential merger and alliance partnerships, or direct investment or some combination of all these. Perhaps the most fundamental shift may be needed to sell sustainable production as a managed service with appropriate service provision partners, instead of focusing on a dedicated software sales channel.
Who Should Care: Any manufacturing organization looking to improve the visibility of sustainable and environmental criteria of parts, materials and services in parallel with conventional materials data compliance should consider iPoint. In particular, iPoint solutions should appeal to manufacturers that wish to integrate sustainability within the product design development and production process, rather than treating it separately. Likewise, vendors of manufacturing execution systems, automation technologies, and ERP generally might benefit from considering strategies that could incorporate iPoint's data historian and middleware capabilities for dynamic production environments. Service providers seeking to offer verified sustainable production management capabilities should also consider iPoint as a potential technology partner.
Vancouver, Canada (www.pulseenergy.com)
Analysis by Simon Mingay
Why Cool: The energy efficiency of buildings will increase as a point of focus for any organization with responsibility for the buildings' associated energy costs. Similarly, buildings remain the focus of government policy and fiscal interventions, with utility companies being required to provide demand-side management programs and incentive schemes targeting building owners. Add to this mix the uptake of smart meters and the ensuing availability of large volumes of energy data, and you have an opportunity for IT and the application of analytics.
Founded in 2006, and with around 40 employees today, Pulse Energy brings an architecturally simple solution, and a strong platform that is relatively easy to deploy, based around the analysis of data coming from utility bills, meters in the building and/or any building management system. It brings together a number of capabilities, including the ability to scale from the needs of the small or midsize business (SMB) to the multisite enterprise user, a role-based view of the data, and functionality to address the increasingly important issue of employee (building occupant) engagement. More recently, it has added customized tips and suggestions on improvements to its newer Pulse Check product, which is aimed at SMBs, to help organizations without the expertise of an energy manager. The cool part of the enterprise tool is the production of a "typical curve," called the Pulse Adaptive Model, which indicates how the building should be performing given prevailing weather conditions, static occupancy built around calendaring data indicating weekends, holidays, and so on. The building's actual performance is charted against that of the expected performance, enabling the system and the facility manager to identify anomalies. In the enterprise product, Pulse Energy Manager, investigation of the anomalies is down to the facility manager. The ease with which he or she can do that will depend on the complexity of the building, the number and location of meters in place, and the individual's knowledge of the building. Pulse Energy is looking at integrating the tips and recommendation functions currently built into the SMB product with the enterprise product, which, if successful, would significantly broaden the market for the product. The cool part of the SMB product is its ability to figure out different loads in the building (lighting, heating, cooling, and so on) from relatively few and basic data points, such as the utility bills, size and nature of the building, type of heating, ventilation and air-conditioning (HVAC) equipment and typical work schedule. These data points are then used to benchmark against similar buildings, and to generate customized recommendations for what measures can be taken to reduce energy consumption, helping SMBs to get some valuable insight into where and how efficiencies can be made. Pulse Energy is not totally unique in this, with a relative newcomer like FirstFuel Software offering a similar solution via participating utilities.
The product family is a software-as-a-service solution, with no hardware as part of the solution itself. The Pulse Energy product family will work with most meters that comply with appropriate data exchange standards, and is reliant on utility metering data being accessible and shared (see "Green Button Initiative Paves the Way for Consumer Engagement in Energy Usage Data"). With some configurations, the solution will also work with many building management systems. The value in the enterprise solution is the speed with which anomalies will get identified, the benefits of continuous commissioning, and the possibility to measure and validate ongoing savings from energy efficiency measures.
There's no automation or control element to the solution.
Challenges: The solution is suitable for the direct enterprise market, but part of Pulse Energy's challenge in this space is convincing facility managers of the insight that this kind of analytics can provide, and drawing their attention away from the traditional building energy management incumbents like Johnson Controls, Honeywell and Schneider Electric, as well as the large system integrators, such as IBM, that are also targeting the commercial-built environment with analytics offerings. As an easier channel to develop for a small vendor, Pulse Energy is focusing on growth through utility demand-side energy management programs, as it has been doing with BC Hydro (see "The University of British Columbia Monitors Verifiable Energy Savings From Its Sustainability Projects"). Its key challenge is the traditional one for vendors such as Pulse Energy — that is, building the partner network of system integrators, consulting organizations and utility companies. The utility market is challenging because the utilities are lukewarm on these kinds of solutions aimed at energy consumers, unless they are mandated by regulators, or regulators can use them to shave peak consumption. Pulse Energy will need to be commercially astute to develop the utility market where others have struggled. The employee/building occupant engagement will be an increasingly important functionality to deliver extra value to clients, but it will require investment to match the richness of an alternative product, such as from the Lucid Design Group (see "Cool Vendors in Sustainability, 2010"), and as we see gamification methods and technologies increasingly used.
Who Should Care: Any organization that is engaging in energy efficiency measures for its portfolio of buildings and wants a solution that will give early warning of a building, or portfolio of buildings, straying outside of an expected performance envelope, and/or to measure and verify savings from energy efficiency measures, should consider a solution such as that offered by Pulse Energy. Utility companies looking for demand-side management solutions that address the needs of their commercial and institutional customers should also consider Pulse Energy.
New York, New York (www.infor.com)
Analysis by Simon Mingay and Stephen Stokes
Profiled in "Cool Vendors in Sustainability, 2010" as Carbonetworks.
Why Cool Then: ENXSuite was an early arriver in the carbon measurement, accounting and management application space. We gave ENXSuite the status of Cool Vendor partly because of its attempt to move the company beyond a software transactional platform into a vertically integrated sustainable service provider, and because of the top-down decision support it provided to the executive suite.
Where Are They Now: The biggest change for ENXSuite was its acquisition by Infor, following its loss of sales growth. ENXSuite hit the wall because of its limited ability to improve performance, and its lack of linkage to automated financial and, ideally, real-time operational data. The ability to give the high-level dashboard, but also to quickly drill down into the detail at the facility and asset levels, is critical to driving improvement.
Who Should Care: In "Infor Acquisition of ENXSuite Drives Sustainable Asset Management," we said that, unless other players in the energy and resource management space begin to focus on improving analytics, forecasting, decision support, or the ability to optimize enterprise resource and financial performance, then those players risk being acquired or squeezed out of the market.
San Mateo, California (www.hara.com)
Analysis by Simon Mingay and Stephen Stokes
Profiled in "Cool Vendors in Sustainability, 2010."
Why Cool Then: Hara delivered great functionality to the executive team, presented the information well, neatly repositioned itself on energy versus carbon, and achieved very impressive visibility in a relatively short period of time. Although analytics capabilities were limited and dashboards focused on essentially a top-down strategic vision, the traction, focus, determination and venture capital muscle behind the "upstart" that was Hara were impossible to ignore.
Where Are They Now: It's been through a major reorganization, with many of the executives moving on, and has refocused its attention to reignite growth. The new plan is taking on the path we described above in terms of building on the analytics, decision support and investment optimization, but combining those executive tools with the ability to drill down to a much more detailed and granular level, where real issues surface and change occurs.
Who Should Care: Hara is moving with the times, and if it can execute the plan, then it will continue to meet the evolving needs of many enterprises that are looking to get a start on energy management across their enterprise operations. Existing clients need to carefully evaluate the overall sustainable business market, and validate that Hara can guarantee longer-term alignment to an increasingly specialized and differentiated suite of requirements, technology tools and business processes.
By 2015, technology platforms for sustainability will shift from being a disconnected patchwork of tools to integrated enterprise and supply chain applications.
By 2017, energy management will consolidate as an enterprise-level discipline and be enabled by enterprise energy management information systems.