Smart meters driving utilties' IT spending – IDC
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IT spending among utility companies in Western Europe will grow by 6.2% per year to $11.7 billion by 2015, as smart metering drives the need for new systems
Utility companies in Western Europe will grow IT spending by 6.2% annually, from $9.1 billion this ear to $11.7 billion in 2015, new research from IDC predicts.
The market research firm found that utility companies currently spend around 60% of the their total IT expenditure on outsourced IT services. Packaged hardware and software make up two other big slices, representing 17.7% and 20.6% of the total spend respectively.
One of the drivers of this increased spend was smart metering, IDC analyst Roberta Bigliani noted. "IT investments will continue to be driven by smart metering rollouts, operational excellence, cost reductions, and the need to comply with energy policies and regulation," she said.
IT spending was not uniform across the various utility sectors, IDC found. By industry, electricity companies made up most of the IT spend, with more than two thirds of the total, $6.1 billion. Gas and water companies made up 16% and 13% respectively. The electricity industry's IT spend is also set to increase the fastest, according to IDC, with a CAGR of 6.7% estimated up until 2015.
"Electricity's IT spending is already the most substantial in 2011," Bigliani said. "The water subindustry sector will have the slowest 2010–2015 growth rate, significantly below average at 4.8%, though this is to be expected as companies in the water subindustry are often smaller, making it more difficult for them to find financial resources to invest in IT."
