Pike Research has published a report on the carbon management software and services market, which highlights the expected growth in the sector in the coming years. Full details are here.
The report estimates that the market was worth more than $380m worldwide in 2009, but will grow at a compound average growth rate (CAGR) of 40.2% between now and 2017. In the short term, i.e. 2010, the market is expected to grow 73% worldwide. Western Europe has the largest slice of the action with estimated spending of $297m expected in 2010 and an annual growth rate of 37% (I think from 2008 to 2017, but the Management Summary is not clear). By 2013 North America is expected to become the leading marketplace.
According to the report, two thirds of the market is services and the rest software. The software market reached $132m in 2009 and will grow to over $1.2bn in 2017 (a CAGR of more than 37%), whilst the services market - consulting, implementation and outsourcing – was worth $248m in 2009 and will grow at a a CAGR of 41.5% to reach over $3bn in 2017.
The increasingly tough regulatory environment is seen as a significant market driver, particularly in Europe and Asia/Pacific. Whilst every industry is impacted, the report finds that the energy, manufacturing, government, and retail sectors have come under most pressure to manage their emissions as the result of a combination of regulatory, supply chain, brand equity and cost efficiency factors.
Most of this is as you would expect. It’s a small market, but growing rapidly for lots of good reasons and becoming a significant part of the green ICT sector. Nor am I surprised that two thirds of the revenue is services in 2009 – there are lots of large companies out there that really don’t know how to set about counting and managing emissions and need help. Beyond that, though, I think the ‘services’ aspect will be primarily software-as-a-Service (SaaS). This is an ideal market for an online solution, given the various regulatory environments, reporting standards, methodologies, conversion factors, etc. that companies will have to use and adopt. Using an online service takes away a lot of the complexity and hassle and most main offerings are SaaS solutions.
I suspect that the consulting element will fall away as companies become aware of methodologies and use increasingly sophisticated software not only to count and manage emissions, but to model business changes and different emissions scenarios.