Enterprise demand to monitor and report greenhouse gas emissions will push North America into the global market lead for carbon management software and services by 2013.
In a new report, Pike Research forecasts the North American market will be over $1.1 billion, or 41 percent of the global market in 2013.
Total worldwide spending on carbon management software and services is predicted to be $5.7 billion by 2017 - an upgrade to a previous Pike forecast of $4.4 billion by 2017 published in the first quarter of 2010.
Pike Research senior analyst Marianne Hedin stated, "an overwhelming majority of Fortune 500 companies are voluntarily measuring, managing, and reporting on their carbon emissions," despite the inability of the U.S. Congress to pass a climate and energy bill.
Significant drivers for companies to purchase software and services include an emphasis on energy efficiency, supply chain mandates, and building brand equity for shareholders and consumers.
According to the report, "Carbon Management Software and Services," services, as industry segment, are growing at a faster pace than software purchases, increasing from 55 percent of the total market in 2010 to 67 percent by 2017.
Pike Research noted that a large number of organizations -- especially small-to-medium enterprises -- have yet to automate management processes with outside software. Many organizations still rely on Excel spreadsheets or homegrown software applications.
As the list of players offering carbon and energy management solutions grows, the marketplace is becoming more diverse and fragmented.
Big name service providers such as Accenture, Deloitte, IBM, Infosys, and SAP, top the list of market leaders, as do well-established enterprise energy management players like Siemens, Schneider Electric, and Johnson Controls. "Pure plays" in regulatory compliance and sustainability performance management, among other niches, are playing an important role as the industry evolves.
Pike Research offers tactical recommendations for companies wanting to compete in the fragmented market:
- Clearly articulate the business case for carbon management
- Use a comprehensive systems thinking approach to understand the GHG emissions reduction implications of the entire value chain, including direct and indirect emissions
- Develop a fully integrated management system that builds on what an organization already has in place and allows organizations to enter, analyze, and roll up data enterprise-wide and worldwide, supported by a multi-language user interface
- Conduct data management and analytics, as organizations are becoming responsible for reporting ever-larger and increasing amounts of data that must be analyzed in greater and greater detail
Accounting software photo from Shutterstock.