Revenue generation within the global market for smart-metering-as-as-a-service (SMaaS) will reach $1.1 billion per annum by 2030, according to a new study released by market intelligence firm Northeast Group.
Overall, the SMaaS market is expected to be worth $6.9 billion over the next ten years as the utility metering sector increasingly embraces the “as-a-service” business model.
The SMaaS model, which ranges from basic cloud-hosted smart meter software to utilities leasing 100% of their metering infrastructure from a third-party, today accounts for a still small but rapidly growing share of revenue for vendors, according to the study.
However, utilising cloud-hosted smart meter software (Software-as-a-Service, or SaaS) continues to be the most popular approach for utilities, and leading cloud providers such as Amazon, Google, and Microsoft have become an important part of the vendor landscape.
Smart metering vendors are entering strategic partnerships with both cloud and telecom providers to develop top-flight software and connectivity service offerings. Market consolidation has also been driven by managed services, with Itron, Landis+Gyr, Siemens, and many others expanding their portfolio of offerings through mergers and acquisitions.
Vendors are hoping to expand beyond North America and Europe and tap potential new revenue streams in emerging markets, where hundreds of millions of smart meters are set to be deployed over the 2020s. While these remain limited so far, recent projects in India show how managed services are being utilised in developing countries. At the same time, many countries currently don’t allow utility use of cloud-hosted software, and overall regulatory frameworks continue to favour investment in capital versus service-based metering models that are classified as O&M expenditures.
According to Steve Chakerian, a senior research analyst at Northeast Group: “There are already over 100 million smart meters being operated under managed services contracts across the world.
“So far, the majority of these projects are in the US and Scandinavia, but utilities throughout the world are beginning to view managed services as a way to improve security, lower costs, and reap the full benefits of their smart metering investments.”
As smart metering grows in both scope and complexity, so will the popularity of managed services for smart metering. Only a handful of the largest utilities will be able to address the demands of upcoming challenges such as cyber security and distributed energy resource (DER) integration on their own. The pace of growth of managed services will vary country by country and utility by utility, but the benefits of these models will only grow over the next decade.