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Meter data management (MDM) can no longer go it alone, and the vendors know it, says Pike Research in a new report. Vendors have moved aggressively into offering analytical capabilities alongside traditional MDM capabilities.

Familiar functions - such as validation, editing and estimation - are still critical and now reside in expanded product sets that include analytic capabilities. The ability to survive strictly on traditional MDM capabilities no longer exists. MDM vendors have evolved to avoid becoming dinosaurs, Pike Research says.

Regardless of how the tug-of-war between MDM and data analytics is resolved, the research firm expects MDM systems to continue to sell throughout the rest of this decade. Utilities will continue to need a reliable and accurate system of record for their metering data, and the report says MDM is the only application likely to provide it.

According to Pike Research, the three primary drivers of MDM purchases will be the following:
  • Advanced metering infrastructure (AMI) deployments, which are likely to include MDM at the same time. This is a departure from past scenarios in which many stimulus-funded AMI deployments did not include MDM, the report notes.
  • The replacement of legacy customer information systems, necessary to process the more complex billing determinants that come with dynamic pricing methods.
  • A desire to enhance business efficiency and decision-making through more advanced analytic capabilities that require metering data as an input. The MDM marketplace has diverged into two distinct approaches: in-house utility deployments and managed services deployments. While in-house deployments are currently more popular, Pike Research forecasts that MDM as a managed service will gain market share throughout the decade.
Pike Research also expects MDM as a managed service to generate quite a bit more revenue than in-house MDM, albeit with more cost as well. MDM purchases are more strongly influenced by desired business outcomes than by technology issues, although some procurement of in-house MDM still emphasizes the technical aspects, the report adds.

The business outcome focus reflects the trend that utility operations teams are increasingly involved in the requirements and definition of success for technology acquisitions. Concurrently with the new business issues, MDM faces technology issues similar to those seen in the past, but more severe.

According to Pike Research, MDM acquisitions today must be able to scale for much larger data volumes, as AMI deployments are completed and other sensor data are collected from the AMI beside interval consumption readings.

Data analytics and MDM

Pike Research says MDM’s survival against data analytics engines emerged repeatedly in the company’s research as the key topic for this market. In the best-case scenario, utilities realize that they can perform nearly all the analyses they need within expanded MDM systems. In the worst-case scenario, the report says, MDM is relegated to a piece of middleware that does little more than capture and smooth data from AMI head-ends.

The most likely future is somewhere between those two extremes, Pike Research says. Utilities still target MDM at three high-level business outcomes, including more efficient grid operations, more efficient business operations and more effective customer engagement.

However, during the past year, the report says data analytics have emerged more forcefully as a factor in achieving those desired outcomes. MDM’s ultimate survival against data analytics rests in a complex stew of utilities’ perceptions of what they need, analytics vendors’ ability to align utilities’ visions with their own, and MDM vendors’ ability to convince utilities that they can provide the answers.

It is far too early to forecast success or failure, Pike Research notes. MDM vendors have expanded their analytical capabilities, and most MDM products can store non-AMI data, such as sensor readings from supervisory control and data acquisition (SCADA) systems, enabling more complex analytics.

According to Pike Research, MDM’s shortfall is likely to be its limited ability to process non-structured data that is also needed for decision support, such as weather, economic and political data.

Revenue

Pike Research forecasts global MDM revenue to increase from $122 million in 2012 to $424 million by the end of 2020, with a compound annual growth rate (CAGR) of 16.8%.

Comparing similar years between last year’s forecast and this report, Pike Research
has increased the MDM revenue forecast for 2012-2018 from $1.135 billion to $1.414 billion - an increase of nearly 25%. The report says this increase is attributable to increased drivers from smart grid data analytics and better visibility into AMI deployment plans.

Pike Research also expects North America and Europe to remain the major MDM markets throughout the forecast period. Significant activity is likely to occur in the Asia Pacific region during the second half of the decade.

However, Pike Research expects that large MDM deployments in China and India will exert severe downward pricing pressure on MDM software licenses. MDM programs in those two countries are not likely to use MDM service offerings, which Pike Research expects to produce the lion’s share of MDM revenue throughout the forecast period.

Pike Research says there is plenty of opportunity for MDM to remain a viable marketplace, but cautions that MDM vendors must tread carefully, yet aggressively, over the next two to three years to preserve their business.

For more information on the report, click here.






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