Smart grid index_zpryme_fierce_smartgrid_sgi_january_2013(1)

SMART GRID INSIGHTS
JANUARY 2013

SMARTGRIDRESEARCH.ORG
INTELLIGENT RESEARCH FOR AN INTELLIGENT MARKETTM

SMART GRID INDEX

SMART GRID INDEX:
INTELLIGENCE BY ZPRYME | ZPRYME.COM
© 2013 ZPRYME RESEARCH & CONSULTING, LLC. ALL RIGHTS RESERVED. JANUARY 2013

Table of Contents

Executive Summary ................................................................. 2
Methodology .......................................................................... 2
February’s Survey.................................................................... 2
Monthly Key Metric Trend Analysis by Respondent Type . 3
Smart Grid Sentiment............................................................... 4
Expected Utility Expenditures over the Next 12 Months....... 5
Sales/Expenditures over the Last 12 Months ......................... 6
Sales/Expenditures over the Next 12 Months........................ 7
Expected Staff/Jobs over the Next 12 Months ...................... 8
New Deals Closed Last Month ................................................ 9
Expected Proposals over the Next 12 Months .................... 10
Major concerns when deploying Smart Grid technology . 11
Region that offers the best opportunity for ICTs .................. 12
Respondent Industry Representation ................................... 13
About The Smart Grid Index ................................................. 13

1 [SGI] ZPRYME SMART GRID INSIGHTS Smart Grid Index | January 2013

Copyright © 2013 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org | www.fiercesmartgrid.com

Executive Summary January 2013 Smart Grid Index Results

This month’s Smart Grid Index (SGI) results show that overall Overall Sentiment
Smart Grid sentiment edged up slightly in January.1 Utility 67% currently have a positive view of the Smart
sentiment increased for the second month in row, up by 4 Grid, a 1 percentage point increase from last
month.
percentage points in January. Over the next 12 months,
forty-one percent of respondents indicated that North Expected Utility Investments
America represented the best opportunity for utility related 31% expect utility Smart Grid related investments
information and communication technologies (ICTs). to significantly increase over the next 12 months,
a 1 percentage point increase from last month.
Almost half of the vendors surveyed closed a new deal last
month, while 61% of utilities expect to submit new Smart Current Sales/Expenditures
Grid proposals for budget approval over the next 12 58% said their Smart Grid related sales or
expenditures have increased over the last 12
months. Utilities surveyed said that their biggest concern in months, a 3 percentage point decrease from
deploying Smart Grid technologies was the integration of last month.
systems or networks that used to be silos (55%).
Expected Sales/Expenditures
66% expect their Smart Grid related sales or
Methodology expenditures to increase over the next 12
months, a 1 percentage point decrease from
This study was conducted by Zpryme and FierceSmartGrid last month.
by surveying 212 Smart Grid executives from January 3rd to
Hiring
January 15th of 2013. The survey was conducted online.
51% expect the number of staff in Smart Grid
Please note that percentages may not add up to 100 due related roles to increase over the next 12
to rounding. Three groups were used to inspect for months, a 3 percentage point decrease from
differences: vendors (61% of sample), utilities (15% of last month.
sample), and total sample. The data are presented in
Deals Closed
figures 1 through 10 in this report. 46% of vendor respondents said they closed
new Smart Grid related deals last month, a 1
February’s Survey percentage point increase from last month.

New Proposals
February’s survey will be fielded from February 1st to
61% of utility respondents plan to submit new
February 14th of 2013. Utilities and Smart Grid vendors are Smart Grid proposals for budget approval over
encouraged to participate. the next 12 months, a 12 percentage point
decrease from last month.
1 The SGI is developed by Zpryme’s Smart Grid Insights and FierceSmartGrid.



Monthly Key Metric Trend Analysis by Respondent Type
(table 1, source: Zpryme/FierceSmartGrid November 2012 through January 2013 Smart Grid Index Survey)
Net
Metric Nov-12 Dec-12 Jan-13 percentage Trend (+/-)
point change

% Who have a positive view of the Smart Grid industry
All Respondents 71% 66% 67% 1% +
Utilities 60% 67% 71% 4% +
Vendors 78% 70% 68% -2% -

% Who expect global utility investments on Smart Grid technologies to increase significantly over the next 12 months
All Respondents 31% 30% 31% 1% +
Utilities 25% 30% 39% 9% +
Vendors 33% 33% 28% -5% -

% Who have increased Smart Grid sales or expenditures over the past 12 months
All Respondents 60% 61% 58% -3% -
Utilities 61% 48% 82% 34% +
Vendors 65% 65% 49% -16% -

% Who expect to increase Smart Grid sales or expenditures over the next 12 months
Utilities 68% 53% 59% 6% +
Vendors 74% 76% 69% -7% -

% Who expect to increase Smart Grid staff over the next 12 months
Utilities 47% 44% 29% -15% -
Vendors 60% 57% 54% -3% -

% Who closed a new Smart Grid deal last month
Vendors 45% 45% 46% 1% +

% Who expect to submit new Smart Grid proposals for budget approval over the next 12 months
Utilities 75% 73% 61% -12% -



Smart Grid Sentiment

Sixty-seven percent of respondents were positive about the global Smart Grid industry, with utilities more positive (71%) than
vendors (68%). However, 11% of all respondents and utilities had a negative view. Compared to last month, respondents
with a positive view of the Smart Grid increased by 1 percentage point among all respondents, and by 4 percentage points
among utilities. However, this figure decreased by 2 percentage points among vendors.

What is your current view of the global Smart Grid industry?

100%

90%
23% 18%
26%
80%
11% Neutral
70% 11% 7%
60% Negative

50%
Positive
40%
67% 71% 68%
30%

20%

10%

0%
All Respondents Utilities Vendors
(figure 1, source: Zpryme/FierceSmartGrid January 2013 Smart Grid Index Survey)



Expected Utility Investments/Expenditures over the Next 12 Months

Utilities are more optimistic than vendors about global utility expenditures on Smart Grid technologies as 39% of vendors said
they expect investments to increase significantly over the next 12 months (vs. 28% for vendors). However, almost half of all
three groups expect utility expenditures to increase at least a little over the next 12 months. Compared to last month, the
percent of respondents who expect expenditures to increase increased by 1 percentage point among all respondents, and
increased by 9 percentage points among utilities. However, this figure decreased by 5 percentage points among vendors.

Over the next 12 months, global utility investments or
expenditures on Smart Grid Technologies are expected to:
100% 4% 4% 5%
5% 4%
90% 7%
11% Decrease
80%
16% 14% significantly

70% Decrease a
little
60% 43%
50%
45% 47%
Stay the same

40%
Increase a
little
30%

20% 39% Increase
31% 28% significantly
10%

0%



Sales/Expenditures over the Last 12 Months

Over the past 12 months, the majority of all three groups had increased their Smart Grid sales and/or expenditures. The total
sample and vendors reported small decreases (9% and 12%, respectively), while no utilities said their Smart Grid related
expenditures decreased. Compared to last month, the percent of respondents who increased their sales or expenditures
decreased by 3 percentage points among all respondents, and by 16 percentage points among vendors. However, this
figure increased by 34 percentage points among utilities.

Over the past 12 months, my company's Smart Grid
related sales and/or investments (or expenditures) have:
100%
9% 12%
90% 18%
80%
33% Decreased
70%
38%
60%
Stayed the
50% same

40% 82% Increased
30% 58%
49%
20%

10%

0%



Sales/Expenditures over the Next 12 Months

Over the next 12 months, most respondents in all three groups expect Smart Grid sales and/or expenditures to increase, with
utilities being more conservative (59% increase) than the total sample (66%) or vendors (69%). Compared to last month,
respondents who expect sales or expenditures to increase fell by 1 percentage point among all respondents, and by 7
percentage points among vendors. However, this figure increased among utilities by 6 percentage points.

Over the next 12 months, my company's Smart Grid
related sales and/or investments (or expenditures) are expected to:
100%
11% 9%
90% 22%
80% 22%
23%
70% Decrease
19%
60%

50% Stay the same

40%
66% 69% Increase
30% 59%
20%

10%

0%



Expected Staff/Jobs over the Next 12 Months

Over the next 12 months, 51% of respondents expect hiring to increase, while 14% of utilities and 11% of vendors project a
decrease in hiring. Compared to last month, respondents who expect hiring to increase fell by 3 percentage points among
all respondents, 15 percentage points among utilities, and by 3 percentage points among vendors.

Over the next 12 months, the number of
staff/jobs in Smart Grid related roles are expected to:
100%
11% 14% 11%
90%

80%

70% 39% 35%
Decrease
60%
57%
50%
Stay the same
40%

30% Increase
51% 54%
20%
29%
10%

0%



New Deals Closed Last Month

Almost half of the vendors (46%) surveyed said that they had closed new deals last month, a one percentage point
increase over last month.

Last month, did your company close any new Smart Grid
related deals (sales, partnerships, investments, aquisitions, etc.)?*

Yes, 46%
No, 54%

*Fifty-four percent of the sample was made up of vendors. Vendor industries are those respondents identified as manufacturers of power products or
systems, technology vendors or integrators, and business, technical, and/or engineering consultants.



Expected Proposals Submitted over the Next 12 Months

A majority of utilities (61%) expect to submit new Smart Grid proposals over the next 12 months. This represents a 12
percentage point decrease from last month.

Over the next 12 months, does your utility plan to submit any
new Smart Grid proposals, plans or pilots for budget approval?*

No, 39%

Yes, 61%

*Fifteen percent of the sample was made up of utilities.



Major concerns when deploying or implementing Smart Grid technology

Utilities surveyed said that their biggest concern in deploying Smart Grid technologies was the integration of systems or
networks that used to be silos (55%). There was a 4-way tie for the second biggest concern, between lack of funding,
change management, making the business case for Smart Grid expenditures, and interoperability.

Currently, what are your major concerns when deploying or implementing Smart
Grid technology?*

Integration of systems or
networks that used to be silos 55%
Lack of funding 50%
Change management 50%
Making the business case for
Smart Grid related expenditures 50%
Interoperability 50%
Lack of trained personnel 40%
Standards 35%
Customer backlash 25%
Retrofitting/refurbishing
equipment 10%
0% 10% 20% 30% 40% 50% 60%
*Fifteen percent of the sample was made up of utilities.



Region that offers the best opportunity for Smart Grid information and communication technologies

Over the next 12 months, forty-one percent of respondents indicated that North America represented the best opportunity
for Smart Grid related information and communication technologies (ICTs). Asia (24%) and Europe (19%) were ranked 2nd
and 3rd, respectively.

Over the next 12 months, which region offers the best opportunity for Smart Grid/Utility
information and communication technologies (ICTs)?

2%
3%
10%
North America
Asia-Pacific
41%
Europe
19% South America
Africa
Middle East

24%




Respondent Industry Representation About The Smart Grid Index

Fifteen percent of respondents were utilities, while 54% The SGI is developed by Zpryme’s Smart Grid Insights and
were vendors. Vendor industries are those respondents FierceSmartGrid. The monthly Smart Grid Index is an
identified as manufacturer of power products or systems, objective and unbiased market indicator that captures
technology vendor or integrators, and business, technical, the real-time industry sentiment, outlook, and
and/or engineering consultants. The remaining 31% were performance.
from the educational, nonprofit, power generation,
government, and other industries. Government data and statistics are usually 1 to 2 years
behind. Additionally, major industry announcements and
Industry Representation of Respondents deals only capture a small fraction of market activity. Such
Nonprofit
lack of data can lead to poor investment decision criteria
organization, for utilities and technology vendors operating (or seeking
7% State/federal
government,
to enter) in the Smart Grid space. Thus, the goal of the
3% monthly Smart Grid Index is to provide credible, reliable,
Education and timely market information for utilities and Smart Grid
Utility, 15%
institution, 8% executives so they can better assess their performance
versus their peers, and decrease the risk associated with
Smart Grid related investments.

Technology
Other, 13%
vendor or
integrator, 17%

Power
generation, 1%
Manufacturer Consultant
of power (business,
products or technical, or
systems, 12% engineering),
26%

(figure 10, source: Zpryme/FierceSmartGrid January 2013 Smart Grid
Index Survey)



About Zpryme Smart Grid Insights Practice: Zpyme Credits

Zpryme-powered Smart Grid Insights Publication, Practice and Research Manager Sr. Research Analysts
Advisory Board help organizations understand their business Roger Alford, Ph.D. Megan Dean
environment, engage consumers, inspire innovation, and take action. Paula Smith
Zpryme Smart Grid Insights represents an evolution beyond traditional
market research and consulting: combining sound fundamentals, Disclaimer:
innovative tools and methodologies, industry experience, and These materials and the information contained herein are provided by Zpryme Research & Consulting, LLC and are
intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of
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we don’t produce tables and charts; we deliver opportunity-focused, investment, consulting or other professional advice or services. The information is not intended to be relied upon as
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About FierceSmartGrid:

Written with a focus on industry CTOs and technical infrastructure
decision-makers, FierceSmartGrid covers the latest business and
technology news surrounding network intelligence, home networking,
smart meters, and other key issues pertinent to the efficient delivery of
economic, reliable, and sustainable energy services.

In addition to a free weekly email newsletter to keep up with this
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to unique special reports, eBooks, webinars, events, and whitepapers.
Join FierceSmartGrid today to get an edge in the energy delivery
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www.fiercesmartgrid.com



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