Utilities sector to up its ICT spending

Utilities sector to up its ICT spending

IDC predicts growth in the utilities sector as companies begin to appreciate the value of ICT

ICT spending in Australia’s utilities industry will grow this year in spite of the economic downturn, according to IDC.

Results from a new report titled, Australia Utilities Information and Communications Technology Market 2008-2012 Forecast and Analysis,show moves to renewable energy sources, regulatory compliance, plant engineering, plant maintenance and outage, business intelligence, mobility and smart metering driving greater adoption of ICT solutions.

“It is the opportunity for growth. The potential is there but it is up to the utility companies to appreciate the value of IT,” IDC senior market analyst, Melissa Martin, said. “We did a study recently where the results showed 43 per cent of utility industry CIOs holding the view that ICT has been a significant source of competitive advantage and innovation.

“I think you are going to see growth this year. It will be small and getting larger. They will be doing trials and implementation of smart metres. They have an ageing infrastructure they have to start replacing piece by piece, and that won’t be one big bang project, it will be something over time they need to start now.”

The analyst firm predicted the sector will grow from $1.12 billion in 2008 to $1.30 billion in 2012, a compound annual growth rate (CAGR) of 4 per cent, which is above the industry average of 3.6 per cent.

And while the sector is the second smallest vertical in terms of spending – constituting just 2.8 per cent of the total enterprise market – Martin claimed there would be opportunities for channel partners to get a piece of the action.

“IDC sees that 57 per cent of ICT spending in the utilities space will be in the services sector,” she said. “That just goes to show the consultative nature of the utilities industry. They don’t have the expertise in house – they have generally been laggards in technology of any sort of implementation. So they are going to go out to big and little players to get the help they need to replace their ageing infrastructure to get the smart metres and to better capture the customer data they need nowadays. So there are opportunities for everybody.”

Martin also pointed to several pilots being undertaken – such as the rollout of a fibre-to-the-premise broadband network by Aurora, a Tasmanian Government-owned power and gas utility and a WiMax trial in the Hunter Valley by utility Energy Australia – as further proof of the opportunities present in the utilities sector.

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