Magic Quadrant for Delivery Utility Enterprise Asset Management

Gartner bases the concept of a Magic Quadrant on a customer-oriented market analysis. Consistent with the approach espoused by business author Geoffrey Moore, a market is "a set of actual or potential customers for a given set of products or services who have a common set of needs or wants, and who reference each other when making a decision."

Buyers often refer to the majority of the enterprise asset management (EAM) market as the best-of-breed (BOB) or point solution market for EAM. Buyers usually evaluate products from multiple vendors and look for point solutions, rather than suites (on a ratio of approximately 2-to-1, based on a Gartner analysis of license fee expenditures), so the ability to sell the EAM module by itself is an important criterion for a successful vendor, corresponding to the market seeking specialized and flexible solutions. This may progressively change, and we have seen some movement on this in the past year, as ERP vendors develop further functionality and aggressively market to their customer base. Clients already invested in an ERP suite would be wise to review the EAM capabilities offered by the ERP vendor suite.

What the Market Is Not

The market does not include IT asset management (see "Use Compound Asset Management to Optimize ITAM Efficiency and Effectiveness"), facilities workplace management (that is, an integrated workplace management system — see "Magic Quadrant for Integrated Workplace Management Systems") or financial asset management (see "IT Market Clock for Financial Management Applications, 2012"), which are separate software markets covered elsewhere by Gartner. In addition, the market does not encompass the related service parts planning market, which is related to EAM, because it supports the provisioning of spare parts for a repair environment (see "Supply Chain Transformation: The Service Life Cycle Management Maturity Model"). Clients should separately consider coverage of these topics — particularly financial asset management — to plan and manage the depreciation of and investment return from generating assets over time.

Positioning on this Magic Quadrant reflects the Gartner assessment of the market. It focuses on the solutions available, includes the suite offerings, and takes into consideration functionality, the experience available and the fit to purpose. This assessment focuses on the vendors providing applications that are used to manage work associated with transmission (for example, electric transmission lines/substations and gas pipelines) and distribution (for example, electric wires, gas pipes and water pipes). It also covers various work types, including construction (capital), inspections, operations and maintenance, and service orders.

Clients should bear in mind that the market for EAM products is very broad and populated with hundreds of vendors. Gartner has reviewed what we consider to be the most relevant products for the clients operating in this market segment. Although this Magic Quadrant has widely distributed vendor positions, all vendors listed are active and successful in this market, and are the top echelon. In essence, this Magic Quadrant represents the top-right corner of a much larger "virtual" Magic Quadrant of vendors that are not considered herein.

Source: Gartner (September 2012)

Vendor Strengths and Cautions

IBM (Maximo)

IBM, with its Maximo Asset Management product, continues to have a strong product and presence in the industry. Since its beginnings as PSDI, through its time as MRO Software and uninterrupted by its acquisition by IBM, the Maximo product has been developed to cater to EAM needs across multiple industries on multiple platforms. Although it is positioned in the middleware group of Tivoli within IBM, the team is largely left to determine its own future and leverage IBM products where relevant, which is a good thing, because IBM doesn't have any other end-user business applications.

Strengths

• IBM Maximo has high viability.
• Global support and implementation resources make the solution widely available.
• Combined with Tivoli software, IBM Maximo is able to manage operational technology (OT) software assets with the same solution that is used to manage physical plant assets.
• High EAM investment and the leverage of IBM's research capabilities are bringing advanced maintenance functionality to market.
• Maximo supports integration with a wide variety of ERP suites and OT systems, and it has versatility across multiple platforms.
• There is an optional extension for Linear Asset Manager and strong native integration with Esri ArcGIS.
• Links to IBM Maximo Health, Safety & Environment; resource scheduling; and planning (which provide drag-and-drop access and comparisons of planned to actual work) have been added.
• A real-time asset locator is a useful addition for tracking tools and mobile equipment, and linking the application to RFID or automated GPS.

Cautions

• Contracts and negotiations continue to be challenging for some clients, as are relations with IBM; however, this is reportedly improved over past years.
• A specialized version is required for transmission and distribution (T&D) operations at an additional cost.
• Maximo is considered relatively expensive to license compared to the average of vendors listed here (but with very high functionality).
• Syclo, which has been IBM's preferred mobile application portfolio, continues to be an IBM partner, even though it has been acquired by SAP.
• IBM is not known as a business application software company, and it has limited business application products on the market. IBM is more used to dealing with IT department customers, rather than business end users. As a result, end-user perceptions and IBM dialogue can be challenging.

IFS

IFS is a Swedish-based ERP vendor that is able to separately deliver the EAM module as a BOB product. It has had expanded sales in new geographies; however, there are still no utility sales in the U.S., and there is more of a focus on generation than delivery/network utilities. Its modular, flexible architecture continues to be an advantage, and functionality has been extended for construction processes. IFS's acquisition and integration of 360 Scheduling mean that it can offer workforce optimization as part of the overall offering.

Strengths

• IFS's solution can be implemented as part of its ERP suite or as a point solution for EAM.
• Its componentized service-oriented architecture provides a high degree of flexibility and is highly scalable, and implementation time can be managed better.
• The solution has innovative and rich maintenance functionality, including workforce scheduling and fleet maintenance (for vehicles and replicated assets).
• IFS is very strong in construction project management, which is integral to the EAM component.
• It offers very competitive pricing and is considered a good company to deal with.
• Its financial performance has improved.
• A partnership with Intergraph (owned by Hexagon, also of Sweden) and IFS 360 Scheduling will be beneficial to clients for visual support of scheduling and routing.
• IFS is very strong in construction project management, which is integrated to the EAM component.

Cautions

• IFS only supports Oracle Database.
• It is not widely deployed in delivery/network utilities (although there have been an increased number of sales).
• The existing customer base is weighted toward EMEA.
• Available resources need to be examined closely prior to project commencement in regions where IFS has not had significant industry sales. There is an increasing number of system integrator partnerships, but their relevant experience needs to be evaluated.
• There is limited global marketing in and commitment to this sector.
• There is no explicit linear asset or compatible unit functionality, although we expect it in the near future.
• There has been some negative feedback about product quality in earlier releases.

Infor (EAM)

The product formerly known as Datastream EAM had been focused mainly on manufacturing. Recently, Infor has renewed its product focus on other industrial markets and closed new business with utility companies, both power and water, leading to overlap in market targeting with Infor Public Sector. Changes in senior management have moved Infor into new product, technology and marketing directions. Infor has stabilized its financials overall. Now, clients and buyers should focus on the investment level in their specific products.

Strengths

• Infor has more experience than most delivering EAM as software as a service.
• It generally costs less to license and deploy than other competing systems.
• It has broad functionality covering the major EAM functions, and a utility-specific edition is available.
• Infor is capable of supporting a broad mix of assets (for example, capabilities for fleet maintenance, including vehicles and replicated assets in a network).
• Its strategic focus includes an integration platform and tools (Ion and DataBridge), and has a wide choice of platforms.
• It has some native mobile workforce support, and the benefits of Ion integration and Infor EAM appear to be bearing fruit through additional features being added on.

Cautions

• Although the solution is offered worldwide, new business is mainly from the U.S. and Europe, and with smaller companies.
• Infor EAM is focused on distribution utilities, but also water and city infrastructure — meaning it overlaps with Infor Public Sector.
• It has fewer experienced implementation resources than many other EAM products, although it is growing the list of system integration (SI) partners.
• Customer references have been below par for product functionality, for quality and in dealing with the vendor.

Infor (Public Sector)

Infor Public Sector EAM (acquired from Hansen) is focused on a client type (public sector, particularly water authorities), rather than a functional process, which creates a broader solution, but overlaps with its sibling product, Infor EAM. Changes in senior management have positioned Infor in new market, product, technology and marketing directions. Infor has stabilized its financials overall, and its focus is now on investing in specific products. The relative positioning in this multisector Magic Quadrant obfuscates the value this product will have for water utilities (particularly public sector) in English-speaking markets.

Strengths

• Infor's product has a strong focus on the public sector — particularly on water utilities.
• It has extensive experience in public-sector and water needs.
• Its product includes related functionality that extends beyond EAM and is suited to a mixed infrastructure environment (for example, pipes, roads, facilities and parks).
• Users have the capability to reflect pipe connectivity, linear, area, point and other asset types.
• Infor has native GIS integration and mobile workforce capability.
• The product is a PACP/LACP-certified (Pipeline Assessment and Certification Program/Lateral Assessment and Certification Program) solution and participates in a number of water industry groups.

Cautions

• Infor Public Sector has functional overlap with Infor EAM, but it is stronger in some geographies (for example, Australia and New Zealand).
• This is not a globally delivered solution, although there is a substantial presence in North America and Australia/New Zealand, as well as a growing presence in the U.K., South Africa and South America.
• There are limited but increasing choices of system implementers and consultants.
• The solution is not focused on electric power or gas.

Invensys (Avantis)

Invensys Operations Management's Avantis is Microsoft-focused, and is more adept at the important integration of IT and OT requirements because of its Invensys family "DNA." However, for delivery utilities, it loses pace with market demands because of the absence of compatible units. It has a Microsoft-centric user interface and platform focus, which can be strengths for some clients, but might be seen as limiting if this is not your technology platform of choice.

Strengths

• Avantis has a well-regarded and efficient implementation methodology.
• It has good native business intelligence.
• It has a broader asset strategy of OT system links, and support for condition-based, predictive and reliability-centered maintenance functionality.
• Invensys has a global sales and support presence.
• It has an in-house mobile workforce solution through the acquisition of the SAT IntelaTrac product.
• There is good product functionality satisfaction, and the company is seen as one that is good to deal with.

Cautions

• EAM and business applications generally are not central to the Invensys product portfolio, which is process automation (that is, OT).
• Invensys has fewer resources (internally) for development than other more focused EAM providers.
• The Avantis product is more focused on manufacturing and generation than on distribution.
• There is no compatible unit functionality; however, there is a capital construction capability.
• The EAM product's pricing is at the upper end of affordability for midsize companies.

Logica

Logica is now owned by CGI of Canada. Logica's EAM product, the Asset and Resource Management (ARM) Suite, is the result of combining functionality from prior products, the Work Management Information System (WMIS) and Storms. ARM is more oriented to work management than asset management.

Strengths

• Logica specializes in the distribution utility field, and has good client and market understanding. Its vision for future products is consistent with industry needs, and it retains essential product functionality for work management.
• It has large, global, in-house implementation resources. With the addition of CGI, Logica has the potential to leverage its experience in mobile workforce applications, in addition to its own capable mobile workforce scheduling features.
• It has ready-made integration with multiple ERP vendors.
• It has a good industry fit through its user interface and product terminology.
• Current discounting and inclusions can make for attractive deals.

Cautions

• Some clients hesitate to upgrade to ARM, and there are limited sales of the new product.
• At its core, Logica is a system integrator and consulting company — not a software product company. However, that brings the benefit of doing all its own implementations.
• There is a relatively small number of ARM development resources, and they undertake limited marketing to grow the client base.
• A combination of multiple products with different designs forms the solution, and there is potential for further overlap with CGI products, which creates uncertainty regarding its future.
• There are limited but growing ARM-experienced resources outside North America.
• Official prices make ARM relatively expensive to license compared to the average of vendors listed here.
• There is no procurement and inventory functionality, and only limited asset maintenance functionality, although asset management is an area of continuing investment.

Oracle (E-Business Suite)

Oracle E-Business Suite continues a steady progression of functional improvements and is approaching a complete ERP suite solution for delivery utilities. There is a growing global T&D utility customer base. Existing clients of Oracle E-Business Suite should look first at the Oracle eAM module and benchmark any point solution alternative against the suite's module. The advantages of built-in integration may outweigh functional shortfalls, such as linear assets definitions and integrated mobile workforce. Oracle also has the Utilities WAM product positioned as a point solution for non-E-Business Suite users. Thus, Oracle's efforts are diluted by supporting multiple solutions for just one market segment.

Strengths

• Oracle E-Business Suite's eAM functionality is approaching parity with BOB applications after release 12, and should be on the shortlist in any evaluation of EAM solutions for Oracle E-Business Suite customers.
• We are seeing a growing, global list of clients and of SI partners.
• Oracle has good usability, and the product has an increasing amount of distribution utility functionality.
• There is a strong project management functionality natively and with Oracle Primavera P6 integration.
• Oracle has strong construction capability natively and includes compatible unit estimating and GIS integration.
• It has a global presence and very strong financial stability.

Cautions

• Oracle eAM has not been integrated with ERP solutions (other than eBS) as a point solution, and is not marketed as such. For non-Oracle customers looking for an EAM solution, Oracle eAM is not a practical candidate.
• Only Oracle Database support is provided.
• Oracle has OT integration capabilities for eAM, but a limited track record being integrated with OT systems.
• There is no clear mobile workforce solution, nor is there linear asset management.
• It is unclear how future EAM applications will be impacted by Oracle Fusion Applications.
• According to surveys and interviews by Gartner, satisfaction in both the product and dealing with the company are below average for EAM vendors.

Oracle (Utilities WAM)

Oracle Utilities Work and Asset Management (WAM) is a BOB product brought in through the acquisition of SPL WorldGroup (which had acquired the Synergen product), which formed the Utilities Global Business Unit. This product is in essence Oracle's BOB component option when E-Business Suite is not being sold. Oracle has taken steps to use the broader family of Oracle technologies in WAM, and to extend the capability from basic EAM to include device, and network management. The vertical strategy is working, and the countries and regions in which Oracle has qualified staff and established clients are expanding. The perception of being focused on small, local utilities makes larger deals difficult to come by.

Strengths

• Although well-suited to municipalities and water utilities (which are often smaller in scale than power utilities), the system is scalable to larger environments and for power utilities.
• The focus is on field service and distribution utility needs with lower cost and complexity.
• Open integration with multiple ERP suites and integration with other Oracle applications are being progressively delivered.
• The integration with network visualization and management tools gives a much broader solution footprint than competitors.
• There are in-house options for mobile and dispatch solutions and recently for OT device management (for example, meters).
• Functionality is expanding and customer feedback has been improving in the product and particularly in the dealings with the Oracle Utilities Global Business Unit.

Cautions

• The long heritage as Synergen, acquired first by SPL WorldGroup and then by Oracle, has resulted in product overlap within the Oracle E-Business Suite.
• Oracle WAM is available only on the Oracle Database.
• The countries and regions in which Oracle has qualified WAM staff and established clients are still limited to North America and Europe but getting more widespread.
• Oracle has limited capabilities for fleet management.

SAP

SAP Business Suite 7 has continued to address functionality shortfalls. Through progressive SAP Enhancement Package releases since SAP ERP Central Component (ECC) 6, functionality is no longer a liability. SAP ERP users should benchmark any point solution offering against the latest evolution of the SAP EAM solution. Buyer objections concern pricing and the negative sentiment toward the user interface (the NetWeaver Business Client shows promise, but buyer reaction is not yet clear), which can be mitigated by negotiation and a number of additions and overlays, respectively.

Strengths

• SAP has most EAM functionality that the majority of utilities would require.
• It has compatible unit functionality, linear asset management, and enhanced key performance indicators and analytics for assets, which will also form part of the new Rapid Deployment Solution (RDS).
• It has a well-developed partner program to fill functional gaps, and it is available on multiple platforms and databases.
• As a combined solution, SAP Business Suite 7 (previously referred to as ECC 6), provides a single view into all aspects of work and asset management — from HR to materials management and from plan/design/construct through to decommissioning.
• The program of Enhancement Package releases has provided progressive functional improvements with fewer disruptions than a traditional upgrade.
• Recently, we have seen additions to analytics; an improved user interface; links to its own SAP Environment, Health, and Safety Management, using SAP Manufacturing Integration and Intelligence to do OT integration, multiresource scheduling and a visual support tool.
• The SAP IS-U package extension provides further utility-specific functionality, such as meter management.
• SAP has developed in-house GIS integration.
• Customer satisfaction with SAP as a vendor is improving.
• It has good fleet support functionality (for vehicles and replicated assets).
• SAP has followed up on its acquisition of Syclo (and Sybase) by renewing efforts to build out its own mobile workforce applications.

Cautions

• SAP's EAM application, although theoretically capable of being implemented as a stand-alone application, requires extensive implementation of other components of SAP's suite solution, such as materials management, financial and HR. Thus, for all practical purposes, it is always marketed, sold and implemented in the context of a full SAP ERP deployment. For non-SAP customers looking for an EAM solution, SAP is not a practical candidate.
• SAP continues to have predominantly European revenue, although this is slowly shifting.
• Clients must check whether their users need functionalities such as an improved user interface and a visual parts selection (which requires additional software products and NetWeaver).
• SAP's investment in Syclo is just beginning, although they had been partners for many years. Alternative prior partners are continuing, which may raise some confusion.
• Users report relatively lower product quality and usability satisfaction.

Ventyx (Asset Suite)

Asset Suite (and as its predecessors Indus PassPort and TSW Empac) from Ventyx, an ABB company, has been focused almost exclusively on the EAM BOB market for utilities. Since the acquisition by ABB of Ventyx, ABB has reinforced Ventyx's commitment to the utilities industry. However, ABB's subsequent acquisition of Mincom and the addition to the company of the Ellipse product create some uncertainty as to which product is best for a distribution sector client, given Ellipse's functional advantages. Asset Suite, however, remains better known in the North American market, and limited resources are available in the Asia/Pacific region. However, if it were combined with Mincom resources, then Ventyx could have a wide presence in the region, although it is more likely that the two products will be sold on a geographic basis. Asset Suite is based on a combination of older technologies from Empac and PassPort. Ventyx has also executed key acquisitions that bolster functionality.

Strengths

• Ventyx is a focused utilities specialist with the user interface and functionality to suit the industry.
• It has a long history of industry involvement and focus.
• The transition to the Asset Suite product (from PassPort and Empac) included a Web services architecture and Java-based tools.
• Clients consider Ventyx to be a good company to deal with that is delivering good products.
• Ventyx's acquisition by ABB created an IT unit (Ventyx-Mincom-Obvient) and complementary OT unit (within ABB) focused on the utilities sector.
• It has acquired Insert Key Solutions' Equipment Reliability Suite and Tech-Assist's Enterprise Shift Operations Management System (eSOMS) for expanded work management functionality, and Obvient for built-in analytics.
• It is using its Ventyx sibling, MDSI Advantex, as its mobile workforce solution.

Cautions

• Ventyx is missing some key distribution functionality, such as linear asset management.
• Resourcing projects in its noncore regions, such as Asia/Pacific and Africa, will be challenging for Ventyx.
• Ventyx has experienced a low number of recent sales in the distribution sector.
• Lack of clarity to the market exists regarding Ventyx's product strategies for Asset Suite and Ellipse, in terms of which will be promoted to utilities segments and markets.

Ventyx (Ellipse)

Mincom was acquired by ABB and reports into the Ventyx division in the U.S. (the product is now known as Ventyx Ellipse), thereby resolving many of the financial challenges, but changing the organizational structure. Ellipse continues to pursue a dual strategy of ERP suite and EAM point solution offerings (Asset Suite is just EAM). ABB develops and markets the two EAM products with similar functionality in many areas, although, functionally, Ellipse is stronger in delivery utilities, and Asset Suite is stronger in power generation, particularly nuclear. ABB's acquisition of Mincom and the addition to the company of the Ellipse product create some uncertainty as to which product is best for a distribution sector client, given Ellipse's functional advantages. Historically, they have had different geographic emphases. For the moment, this is how ABB is choosing which product to propose in new deals.

Strengths

• The Ellipse solution is flexibly deployed as a point solution or a suite.
• ABB ownership means financial stability after successive years of poor financial performance.
• It has a strong utility record in its home country of Australia.
• There is a high level of utility maintenance functionality, including linear assets and compatible unit construction functionality.
• Historically, this product focused on asset-centric industries, such as utilities and mining.
• It is capable of supporting fleet equipment (both vehicles and replicated assets).
• It is available across multiple platforms and databases, and is highly scalable.

Cautions

• Ellipse has historically done well only in Australia, South Africa and the U.K., with a limited presence in North America. This may change if the ABB distribution channels and locations can be leveraged.
• There is a relative shortage of resources and partners.
• It is considered relatively expensive to license compared to the average of vendors listed here.
• Although its financial position has been resolved, the number of new sales to utilities has been in decline. This is not aided by having two EAM products in the Ventyx house.
• Lack of clarity to the market exists regarding Ventyx's product strategies for Asset Suite and Ellipse, in terms of which will be promoted to utilities segments and markets.
• Customer references have been negative for both the Ellipse product and in dealing with the entity formerly known as Mincom.
• It has OT integration capabilities but a limited track record in OT integration. We expect ABB to aid this.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Added

No vendors have been added.

Dropped

No vendors have been dropped.

Note: Some vendors that are active in utilities, but not in delivery utilities, are included in the 2012 "Magic Quadrant for Power Generation Enterprise Asset Management Software."

FSC Limited's 4Site product was evaluated for this Magic Quadrant and was found to have insufficient license revenue for inclusion; however, functionally, it meets requirements. We have also seen Digital Inspections' Cascade frequently in the market for condition-based maintenance in substations, but do not see it as an overarching EAM solution.

Software products must address the majority of functional capabilities we have listed. Because there are more than 300 vendors in the EAM/computerized maintenance management system class of software, and because most of these are too small in company size or product scope to be of interest to Gartner clients, we evaluated only the top products worldwide that our clients requested via inquiries. These products have demonstrable track records in utilities (that is, a significant portion of their license revenue is from utilities), they have estimated license fee revenue of at least $2 million generated during the past 12 months, and they cover multiple geographies. Oracle and SAP have been included, because they are commonplace in utilities and have effective EAM modules. Although they are rarely implemented as point solutions, they are a significant market in themselves, so users of these ERP suites should evaluate the EAM modules offered.

We believe that the products assessed in this Magic Quadrant are of the greatest interest to our clients. The vendors actively sell and market their products in the U.S. and at least one other market. However, there may be reasons for other products to be included on an enterprise's shortlist, such as prior use, price or specific geographic presence. Only products that have been implemented and are in production have been evaluated.

Evaluation Criteria

Ability to Execute

For network/delivery utilities seeking EAM software, the Ability to Execute is primarily a combination of factors driven by product functionality, global strength and — because the majority of buyers are looking for BOB — the ability to deliver a point solution (or BOB, as it is sometimes known) in the market.

In addition to the numerous inquiries we receive in the course of a year, we specifically looked at customer experience in our surveys. Customers were asked about vendor performance in four areas:

• Does the software do what it is supposed to do?
• Is the software reliable and bug-free?
• How good is the vendor at fixing problems?
• How satisfied are you with the overall relationship?

Using a numeric scale (from extremely dissatisfied to extremely satisfied), and taking the entire pool of all references from all vendors in this and the concurrent EAM for power generation Magic Quadrant process, an average of overall customer satisfaction was determined, and then each vendor was ranked according to the scoring of responses specific to that vendor versus the average. A separate piece of research is planned to discuss those results in detail.

Source: Gartner (September 2012)

Completeness of Vision

For distribution utilities seeking EAM software, Completeness of Vision is primarily a combination of focus on the EAM and field service segments, an appropriate go-to-market strategy, and a focus on innovation in EAM functionality.

Source: Gartner (September 2012)

Quadrant Descriptions

Leaders

Leaders in this market have a global presence, an installed base in distribution utilities of all kinds, strong viability and a combination of rich features, including functionality, interfaces with different ERP applications, and a capable and global implementation partner community. IBM, with its Maximo Asset Management product, continues as the Leader in the point solution EAM space. Although IBM also has clients outside of utilities, it has a strong presence in the industry.

Challengers

Challengers in this market show good execution, but may lack a focus on functional or technological innovations, which restricts their desirability — particularly as a stand-alone application. There are no Challengers in this iteration of the Magic Quadrant.

Visionaries

Ventyx (Ellipse) is in the Visionaries quadrant, with a view to integrating OT links because of the ABB acquisition and a changed technology approach in the Ellipse 8 release. However, there remains a more limited global capability until we see whether the ABB distribution channels and locations can be leveraged. Additionally, there are unanswered questions as to how ABB will market and, over time, develop two EAM products with similar functionalities in many areas.

Invensys Operations Management (Avantis) is also considered a Visionary because of its implementation ease, Microsoft compatibility, inclusion of mobile workforce management, and ability to link to OT systems from Foxboro, Wonderware and others.

Oracle (Utilities Work and Asset Management) is ranked as a Visionary because it interacts with and draws on the resources of Oracle. Oracle Utilities WAM has a demonstrable vision for closely integrating the monitoring and control of infrastructure with traditional EAM features. This will be particularly beneficial in the power sector (including integration with in-house network management and outage management system [OMS] functions), and some aspects will also extend to gas and water utilities.

Niche Players

Vendors are classified as Niche Players because of one or more of several factors, including:

• Narrow platform support
• Lack of global presence
• Inability to assess long-term viability because of nontransparent or poor financial performance
• Limited presence in the distribution utilities market

The Niche Players quadrant contains three classes of vendors:

• Those that offer EAM as a stand-alone point solution application (for example Ventyx Asset Suite, Logica, Infor EAM and Infor Public Sector)
• Those that offer EAM as part of a suite (for example, Oracle E-Business Suite and SAP)
• Those that can be delivered as a point solution or as a suite (for example, IFS)

In the case of suites with inseparable EAM modules, the limitation of being usable (for all practical purposes) only within the larger ERP suite, along with the client cost associated with that strategy, lessens broad demand and impacts execution and vision. We have found that two-thirds of implementations are of a point solution. Increasingly, it is an important buying criterion, as clients avoid vendor lock-in and look to have more limited scope projects in current economic times. SAP and Oracle continue to invest in their EAM modules as integral parts of their ERP suite strategies. In both cases, EAM functionality has improved (for example, SAP via the use of Enhancement Package releases, and Oracle by recoding the IP from Oracle Utilities WAM, Oracle JD Edwards EnterpriseOne and Oracle PeopleSoft into the Oracle E-Business Suite) to the point where SAP and Oracle should always be included in EAM evaluations, if the utility is already invested, or plans to invest, in that ERP suite.

This research provides guidance for companies that are investing in management software for physical assets and equipment, and it updates the 2011 "Magic Quadrant for Delivery Utility Enterprise Asset Management." We evaluated EAM products for power generation in the "Magic Quadrant for Power Generation Enterprise Asset Management Software," with a greater focus on the unique features and vendor experience in that subsector.

Component (aka BOB) EAM products that are suitable for delivery (that is, power T&D, water, waste water and gas) companies are a specialized area of software. Some suite vendors also actively market their EAM modules as point solution offerings and sell them as specialized maintenance solutions. Other suite vendors offer only EAM modules as part of the ERP suite being marketed, and, thus, these vendors have a market for EAM that is limited to their own customer base. In the past, these differences have often been simplistically reduced to the "better functionality" of the point solution vendors, contrasted with the better integration of a single-vendor ERP. This is no longer such a simple argument, because the EAM investment by ERP vendors has steadily reduced the functional difference to the point where functionality is not the main differentiator between suites and specialized point solution products. Now, we see discussions about the risk of vendor lock-in, the size of ERP projects versus EAM and the broad user interface needs of ERP versus the focused user interface of EAM. However, the majority of deals are still EAM point solution/BOB sales.

The vendors here come from two perspectives. Some have always been focused on the utilities sector and have over time created capabilities to other industries (for example, Ventyx Asset Suite, Infor Public Sector and Oracle Utilities WAM), while others are generalized EAM products that have had industry-specific additions and adaptations applied over time (for example, Oracle E-Business Suite, SAP and IBM Maximo). It should also be noted that, although this sector has been established for more than 12 years, and has shown steady growth, there has also been a large number of acquisitions over time. However, this has not reduced the number of offerings on the marketplace. Customer resistance to migrate to another product, coupled with sufficient differentiation of functionality, has meant that many vendors (Oracle, Ventyx and Hansen) have multiple products in this market space, and we expect that to continue for the near future.

In this sector, clients need to look at their overall application portfolios and plan how their EAM solutions will interact with other related components, such as GISs, customer information systems (CISs), outage management and mobile work scheduling. As evidenced by our growth forecasts and the inquiries we receive on this topic, many utilities are considering upgrading to or reinvesting in asset management software. Because investments in EAM can address issues with aging assets (by better maintenance), the aging workforce (retention of knowledge in tasks and processes) and network reliability (preventive and predictive maintenance) — resulting in overall better customer service — regulators are likely to decide favorably on cost recovery for these investments.

Utilities need to make key architectural decisions, such as choosing between an EAM point solution approach or an ERP suite solution, as part of their EAM selection processes. Based on the relative importance of asset reliability and availability to the overall success of the business, a company should select the vendor that best fits its architecture, while offering the optimal mix of functionality for the company's asset portfolio. Vendors vary widely in scalability and fit to purpose, and a solution that is appropriate for one client may lack key features needed by another. Long-term vendor and product viability are factors in most customer evaluations, and potential buyers should examine current profitability, as well as a long-term commitment to EAM and utilities.

Although the scope of this assessment is global, some vendors specialize in geographies, and they may be small globally but significant regionally, so do not choose vendors based on size alone. Because the Magic Quadrant process is, by necessity, an averaging of vendor offerings and performance, we always recommend consulting the authoring analyst to get specific advice on your needs, location and industry subsector (such as electric, gas or water).

The market segment considered for this Magic Quadrant is delivery utility (that is, power T&D, water, wastewater and gas) companies that seek software solutions for the management and support of internally owned assets in a geographically distributed environment. Their focus is to keep plant and equipment facilities, as well as linear assets (pipes and wires), available with minimal downtime and at the lowest cost to maximize revenue through reliability.

These systems usually encompass asset management and materials management (for example, inventory and purchasing) functionalities, as well as a work management capability, and include mobile workforce capabilities (or at least formal partnerships). Most installations involve integration with other software products, such as:

• Native or third-party ERP to support budgeting and financial management
• Inventory, supply chain management and procurement
• GISs to support asset management
• OMSs for network recovery
• CISs to support customer service

The global EAM market held up reasonably well in 2011, with an estimated growth of 10% to a market value of more than $1.3 billion in total software revenue. Gartner remains cautious, but optimistic, that this market will enjoy steady growth, provided the economy remains on a recovery track. By 2014, we expect the EAM software market to grow to approximately $1.5 billion in total software revenue. Higher growth may return to the market faster, but one of the influencing factors is public-sector infrastructure plans, which, in many economies around the world, are in doubt, as governments look to reduce spending plans.

Vendors with broad offerings — for example, mobile workforce, advanced scheduling, outsourced service management, work management (construction/maintenance/service) and supply chain management — will continue to lead this market. The drive to automate the end-to-end business process will force consolidation and extension to other applications (for example, customer service, asset management and mobile workforce management). Utility companies will benefit by having fewer vendors to manage, and, in the long term, by having access to capabilities for distributed asset and resource optimization.

Gradually, we see application convergence to create an enterprise solution covering the asset life cycle (that is, design to procure, operate, maintain — the key EAM coverage areas — and retire) and task-supporting functionality (that is, mobile workforce, work and asset management, customer and field service, and business analytics) to achieve resource and asset optimization. Utilities should also plan on developing enterprise architecture and enterprise information management strategies to enable more advanced asset analysis capabilities, and to prioritize aging asset risks. EAM, GIS and analysis tools with good enterprise architectures will enable utilities to analyze the multiple perspectives of viewing the assets (see "The Value of Asset Intelligence for Utilities" and "Asset Management and Reliability: A Strategic Road Map").

For delivery utilities (aka network companies), the functionality must be capable of distributed asset support, with particular importance attached to linear asset structures, remote locations of assets, short-term work, reactive or failure triggered work, condition and performance monitoring, preventive maintenance, and construction capability for network extensions. Particular emphasis is placed on the planning and execution processes. More recently, we have seen a rising need to integrate with OT devices to capture condition and failure data closer to the source. This has been particularly accelerated with the needs of the smart grid and new-generation IP addressable supervisory control and data acquisition (SCADA) systems. Typically, we see EAM systems interfaced with the data historian as a proxy for OT integration, and we expect vendors to reflect this growing client need more specifically in the coming years.

The following are the main functional features expected:

• Detailed asset registry combined with parts and support descriptions (internal and external)
• Support for complex inventory relationships for indirect (maintenance, repair and overhaul [MRO]) goods — things consumed internally that are not assembled and resold — that are associated with forecasting of planned and unplanned work on installed assets
• Supply chain capability for indirect goods, with demand planning linked to maintenance and repair schedules
• Probability-based, "just in case" MRO-focused inventory and procurement, rather than "just in time" or material-requirements-planning-based
• Support for manufacturer logistics processes for equipment under warranty
• Human capital management capabilities to match location, skills, training and availability with work requirements
• Statistical analyses of equipment performance and reliability
• Condition-based triggers for asset health and performance (OT integration)
• Serial number tracking and tracing for equipment and parts
• Financial support via detailed cost analysis
• Integration with whatever ERP (financial and HR) GIS, and CIS package is deployed
• Extensive warranty tracking to component levels, and support for manufacturers' records requirements for equipment under warranty
• Capital construction planning (based on compatible units) defining linear assets and geographic locations (integration with GISs)
• Long-term maintenance, project and work schedules
• Short-term maintenance, client requests and failure recovery work schedules
• Inclusion of, or partnering with, mobile worker and field service support system
• Inclusion of fleet maintenance support for vehicles and replicated assets