Let me start off this post on a downbeat note: Improving sustainability is not a high priority for companies, according to data from the recent Forrester survey of business decision-makers. The survey, part of Forrester's Forrsights research, was fielded to 2,600 executives with budget authority at companies in Europe, North America, and Asia during the fourth quarter of 2010.
When we asked these corporate decision-makers about their company's top business priorities, revenue growth was #1, customer retention #2, and cost-cutting #3 (see Figure 1 below). Improving the corporate sustainability posture? Oops, it's down at #10, with just 10% of respondents indicating that sustainability is one of their firm's high priorities for 2011. When we cut those numbers by industry grouping, utilities/telecoms and public sector/healthcare are highest, with 15% prioritizing sustainability, compared with a low of just 7% in financial services.
Now, I'd like to contrast that eye-opening data with a much more optimistic set of figures from our recent research about the growth of sustainability consulting services. My colleague Daniel Krauss and I have worked with many of the large consultancies over the past few years and seen their sustainability practices grow from practically nothing to very substantial businesses.
Among 21 consulting firms that we surveyed late last year, 17 have a dedicated sustainability practice, and five of those count more than 1,000 practitioners (see Figure 2).
This was quicker than expected. As stated in my last report on the enterprise carbon and energy management (ECEM) software market, we expected that Oracle, among some other players, will catch up on the ECEM market opportunity as it materializes. We projected a period of hypergrowth over the next three years, taking the ECEM software market from an estimated $316 million in 2011 to $903 million in 2013. You'll find our market definitions for carbon and energy management software and overview of the vendor landscape here.
Oracle announced on Friday its acquisition of Ndevr's Greenhouse Gas (GHG) Accounting Software with the intent to expand its current portfolio of sustainability solutions and offer improved capabilities to monitor, analyze, and report energy consumption and related emissions. Australia-based Ndevr was founded in 1998 as a JD Edwards partner, has been a certified Oracle partner for 10 years, and employs today approximately 80 consultants.
The beginning of a new year is always packed with planning sessions to recap the past year, reshuffle priorities, validate progress of corporate and product/service strategies, and come up with a road map to convert thoughts and concepts into actions.
We analysts in Forrester’s vendor strategy practice are regularly involved in these planning and strategy sessions, to act as an independent and objective mirror for higher and mid-level management layers at tech vendors and service companies. Together we map out and identify the implications of macro business and technology trends. In one of those sessions that I was recently invited to, the focus was on future business models in the tech industry. We can offer instant feedback if a vendor’s direction is in line with our market observations and advise them to refine their approaches to be best positioned for the future.
During 2011, I am going to leverage some of the information I have gathered over the past year and display in a couple of slides some key data points on an aggregated basis of vendor and market criteria, helping companies map themselves against industry peers and the market opportunity. I hope you will find them useful as either good discussion starters internally or for planning and validation purposes. I am planning to update these slides on a regular basis to present a fresh and condensed view on key supply- and demand-side indicators.
The first set, which I am offering today, is two slides (see below) targeted toward leaders in charge of their companies' efforts for sustainability consulting services business or evaluating if their companies should move into this market opportunity. Figure 1 contains key vendor criteria such as organizational setup and services mix, while Figure 2 summarizes our market estimates and forecast for 2010 and 2011.
My travels last month took me back to the Bay Area for client meetings and a chance to spend some time at the Autodesk Gallery, a very cool space near the ferry building in San Francisco. Autodesk uses it to show off its customers' design innovations, not coincidentally created using the company's design software. The event in January showcased how customers are using Autodesk visualization software to improve the sustainability of their product designs and implementations. This is tackling sustainability right at its core: making products that are more energy- and resource-efficient, easier to manufacture, easier to reuse and recycle, right from the start. The products we saw at the event included:
A new research facility at NASA Ames down the peninsula. This super-green building is aimed at "beyond" LEED Platinum standards, incorporating a variety of innovative design and engineering elements all captured in building information modeling (BIM) software. The Feds will use it as a laboratory for energy efficient buildings, spreading its best practices and learnings across the broad portfolio of US government buildings and research facilities. NASA is also working to make the design blueprint a working model for efficient ongoing operation of the building.