Volume 26 • No 04 • 2003
ISSN 0742-468X • Since 1978
On-line Since 2000

GMCS Market Study Excerpts
Part 1 (of 3)

Editor’s Note: In the last issue I provided you with a brief overview of the definitive study of GIS & Mobile Computing Solutions (GMCS) for the North American Electric Utility Marketplace. The study was conducted by InfoNetrix (www.InfoNetrix.com), a market research and consulting firm with offices in New Orleans and Sacramento. Beginning in this issue I will provide excerpts from the Executive Summary of report. This is part one of a three–part series. In this issue we cover the first three signs, with the remainder covered in the next two issues.

Although the GMCS market will experience a wide range of pervasive changes during the 2002-2006 forecast period as the result of many factors on several different levels, some factors will have a more significant impact on how the GMCS market evolves than others. The study refers to these factors as The Seven Signs of Market Evolution.

The Seven Signs of GMCS market evolution are listed below with a brief synopsis of each to be presented in serial form over the next few issues. (More comprehensive analyses, as well as pertinent details about how each of these will impact the GMCS market are provided in Section 3: Principal Market Drivers, Issues & Trends.) The signs are:

1. Regulatory Policy & Governance
2. Economics & Investment
3. Technology, Integration & Standardization
4. Data Integrity & System Security
5. Web & Wireless Solutions
6. Enterprise Applications
7. Customer Satisfaction & Service

Regulatory Policy & Governance

Initiatives put forth by the U.S. Federal Energy Regulatory Commission during the past 3–5 years designed to deregulate and restructure the electric utility industry have had a more profound and continuing impact on the GMCS market than any other single factor. These initiatives have caused electric utilities throughout the U.S. and Canada to enter into an entirely new — and patently unfamiliar — phase of business operation that is still evolving and that will continue to change for at least the next several years. PUC and FERC regulations do not seem to influence GIS and Mobile Computing decisions by end-users, but the uncertainty has clearly had a dampening effect on decision-making. During this protracted transition from a tightly regulated, monopolistic market to an open, competitive market, a continuing — though diminishing — level of uncertainty and confusion is anticipated as market reforms evolve.

Economics & Investment

Utility mergers and acquisitions are implicitly a catalyst of change and continue to cause a rethinking of GIS solutions. In some cases, even when both parties to a merger use the same GIS platform, whether or not the combined utility will be best served by the legacy systems is often challenged, creating opportunities for systems integrators and conversion companies alike.

The GMCS market is also experiencing fundamental changes precipitated by supplier mergers and acquisitions. More specifically, within the past few years, three mergers brought non-traditional GMCS companies into the market: GE Power Systems purchased Smallworld; KEMA Consulting acquired GeoIT (a GIS professional services company); and SchlumbergerSema acquired Convergent Group Ð another GIS professional services company. Overall, these changes are mainly good news for the utilities because they bring a more robust set of I/T and engineering skills to what were previously somewhat narrowly focused projects.

Technology, Integration & Standardization

The accelerating pace of technology is having — and will continue to have — an especially significant impact on the GMCS marketplace throughout the forecast period. Continued erosion of average selling prices and the proliferation of ever-larger volumes of products and systems involving similar or even identical base functions and features are among the most evident impacts of rapidly advancing technology on both the AM/FM/GIS and Mobile Computing fronts. For example, users increasingly expect systems to be compatible with Microsoft Windows operating systems at both the desktop and server levels and expect their core GIS software to be Web–enabled. Standards are also beginning to play a central role in the migration of AM/FM/GIS platforms.

In the mobile computing area, there is less expectation of standardization. At present, there are multiple wireless standards at various stages in the marketplace with the form factors for mobile devices also changing rapidly. From a developer standpoint, the introduction of Microsoft Windows/CE facilitated a faster migration of GIS-enabled technology for handheld devices than a standard would have likely produced in the same time frame. However, that is not to say that standards are not needed. On balance, it can be said that that standardization expectations for Mobile Computing are relatively modest at this point and clearly take a back seat to rapid application development, which continues to be the most dominant driver in that sector.

Electric utilities are also beginning to reclassify I/T expenditures as investments rather than expenses. The supplier experience, however, suggests that while return–on–investment (ROI) is often mentioned as a key criterion for justification and procurement, it is not clear that ROI is ever actually measured after the fact. “Utilities don’t have the staff to even evaluate or try many of the new concepts that could save time and money and boost efficiency,” said one industry observer. This means that even solutions based on proven technology with an attractive ROI may never even be looked at by the very utilities that need those solutions most due to staff shortages and work overloads. GMCS suppliers understand that new solutions must have an affect on productivity and are beginning to focus on applications such as outage management and work order management to improve field force productivity.

At the system/application level, enterprise application integration (EAI) is also making its way into utilities along with other global business organizations, as senior managers struggle to assimilate the growing diversity of data gathering systems with information delivery and application needs. This end-goal of applications enterprise interoperability is intended to improve decision–making through access to more — and better, more timely — data. This is particularly true for mobile computing where field workers can improve their own productivity, as well as back office productivity, by capturing data in field.

Find out more

To learn more about the GMCS Market Forecast, and how you can obtain the complete study, visit InfoNetrix (www.InfoNetrix.com)

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