MANAGING EMISSIONS WILL MAKE BIG MONEY

Carbon Management Software and Services; Business Drivers, Policy Issues, Enterprise Adoption Patterns, Competitive Landscape, and Market Forecasts
Marianne Hedrin and Clint Wheelock, 1Q 2010 (Pike Research)

"…Enterprise carbon management is now being adopted and implemented all over the world…Climate change is a very complex national and international issue that affects practically every company, government agency, industry sector, and country…Today, [carbon management ] is a relatively small and nascent market that Pike Research estimates reached about $209 million worldwide in 2008 in terms of spending for software and external services. But it is fast-growing market. Between 2008 and 2009, Pike Research believes the carbon management market has grown by nearly 84% globally, representing a total market of $384 million…

"…North America will provide one of the most promising market opportunities in the years ahead…Pike Research forecasts that North America will grow to a market size
of about $228.5 million in 2010, experiencing a growth rate of over 75% between 2009 and 2010. The 2008-2017 compound annual growth rate (CAGR) for the region will be more than 44%, which is somewhat above the total worldwide growth rate…"

Nothing is valid on the Big Board of international emissions trading if the calculations are not accurate and verified. (click to enlarge)

"In Western Europe, Pike Research believes that spending for carbon management
software and services will reach $297 million in 2010 and experience a 9-year CAGR of
almost 37%. But demand for carbon management in the Western Europe market begins to
lose ground to that in North America during 2013. At that time, the latter will become the leading marketplace globally, a position it keeps through 2017…Asia Pacific will represent the third-largest carbon management market at $83 million in 2010, and it is expected to grow at almost the same rate as Western Europe. In 2017, Asia Pacific will represent a fairly large market of $457 million, accounting for more than 10% of carbon management spending worldwide…

"There are many factors contributing to these robust growth rates, but the increasingly tough regulatory environment with respect to GHG emissions has so far had the most significant impact…Regardless of what happened in Copenhagen, the low-carbon momentum has already begun to take root around the world…In addition to the influence of legislation on demand for carbon management software and services, large global suppliers and manufacturers, such as Wal-Mart, are starting to enforce supply chain mandates on their own suppliers…Corporations increasingly have to address concerns among their shareholders, as well as customers or consumers…[O]rganizations will soon be faced with the major challenge of measuring, monitoring, and reporting on the increasing volume of carbon emissions data required by regulations and/or supply chain mandates…[and] cap-and-trade schemes…This will require a sophisticated and comprehensive carbon management approach. Practically every industry sector is and will be affected…"

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"Organizations will need software tools and help from services providers to address their carbon footprint challenges. Both the software and services markets related to carbon management will be strong and vibrant. Pike Research forecasts that the software market will reach $132 million in 2009 and grow to over $1.2 billion in 2017 at a CAGR of more than 37%. The services market, which primarily includes consulting, implementation, and outsourcing services, will be somewhat larger at $248 million in 2009. It will grow to over $3 billion in 2017 at a CAGR of 41.5%.

"…Today, the vendor landscape is very fragmented…First, both software and services vendors must make sure they can offer a holistic and comprehensive supply chain approach that addresses the entire supply chain from production through distribution. Second, it is critical to be able to align solutions or services offerings to the customer’s business goals and demonstrate a tangible business outcome from any implementation. Third, vendors must show that they “practice what they preach” because customers care about vendors’ own carbon reduction philosophy and practices…Looking ahead, the challenges are many. However, companies can still meet three important objectives – people, profit, and the planet – by implementing a carbon management program."