Marianne Hedin, Pike Research: North America to Become the Largest Market for Carbon Management Software and Services by 2013

October 20, 2011

Under pressure from regulatory bodies, shareholders, and consumers, companies worldwide are being driven to become more energy efficient. The logical focal point of these corporate efforts is carbon management, presenting a large and growing market opportunity for providers of software and services in this area. While governmental efforts to limit emissions of greenhouse gases (GHG) are much more active and visible in Western Europe than in the United States, the business reality is that North American organizations are undertaking serious and far-reaching initiatives to reduce their carbon footprint. According to a recent report from Pike Research, the market for carbon management software and services in North America will become the largest in the world in 2013, reaching just over $1.1 billion, or 41% of the global market.

In 2017, the cleantech market intelligence firm forecasts, total worldwide spending on carbon management software and services will be $5.7 billion. North America will represent 43% of that.

“Although the United States has been unable to pass a national climate and energy bill, it is becoming increasingly clear that U.S. corporations are taking the lead in shaping an environmental and sustainability agenda for the country,” says senior analyst Marianne Hedin. “Today, an overwhelming majority of Fortune 500 companies are voluntarily measuring, managing, and reporting on their carbon emissions.”

In this young and rapidly evolving marketplace, a diverse group of providers, led by major software and service vendors including Accenture, Deloitte, IBM, Infosys, and SAP, as well as large enterprise energy management players like Johnson Controls, Schneider Electric, and Siemens, have forged leading market positions to date. But small and midsize firms are expected to play important competitive roles in the next several years as well, ranging from “pure plays” like Greenstone Carbon Management and Gobi Carbon Management Solutions, to niche firms with expertise in environmental regulatory compliance like Foresite Systems, to sustainability specialists such as Enablon. The growing importance of data management, analytics, and access to content will favor large vendors with expertise in these areas. Pike Research’s analysis finds that, as the carbon management market matures, revenue from services will increase their lead over software purchases as the largest industry segment. Hedin forecasts that services will grow from 55% of the total market in 2010 to 67% by 2017.