How to Make Sense of the Confusing Energy Management Software (EMS) Vendor Market

More companies are purchasing Energy Management Software (EMS) to support energy and GHG reporting to top customers and investors and to reduce energy costs. The market for EMS products is tremendously varied and confusing. By prioritizing a company's needs against five common use cases, corporate managers can avoid the bewilderment caused when confronted with the hundreds of EMS offerings available today.

We define an EMS as a database of energy use and cost data that helps companies track and reduce energy use. Data can be historical - like that obtained from utility bills - or real-time from physical monitors for a single energy load, single facility or multiple sites. An EMS can be a stand-alone product or a module of an operations, maintenance, sustainability, or environmental suite of products.

A Confusing EMS Market

As part of an upcoming report titled A Corporate Buyer's Guide to Energy Management System - A Guide to Develop a Short List of Vendors, our research confirmed that corporate managers are significantly confused about the differences among the over 100 EMS offerings (here is the full list).

Many reasons cause this problem. The EMS category is a largely amorphous product space in which vendor offerings widely differ. Product approaches vary from software-only to hardware-only to hybrid software and hardware products; pricing and business models differ in shared savings, to software subscription, to blended models; and the breadth of solutions fluctuates between energy tracking-centric to control-centric to maintenance-centric.

Even more frustrating, terms like EMS, enterprise energy management, energy intelligence, intelligent buildings and many others are defined differently and even used interchangeably. Moreover, vendors' strengths vary by industry (such as retailing or manufacturing) and by facility type, where the top energy loads differ greatly.

Adding to the confusion are the blurring lines between traditional vendor offerings. EHS vendors now offer carbon and energy management modules, and firms that started as carbon specialists have morphed into EMS providers. Utility bill management vendors added carbon offerings, while demand response providers now sell enterprise-wide energy management software suites, and Building Management Systems (BMS) providers are extending their offerings with more robust EMS capabilities.

Not surprisingly, all this leads to a very perplexing, kaleidoscope-like EMS vendor market.

Making Sense of the Many EMS Offerings with 5 Use Cases

To make sense of these 100 firms, corporate managers must first prioritize their needs, which typically fall into one of five use cases. Often, each use case has a different internal department that is funding the project. The first two use cases are based on energy data from utility bills and the later three are based on data from monitoring devices.

EMS solutions based on utility bill data and which are often multiple sites or company-wide:

1. Utility bill management and payment-related. These services enter utility bills manually, provide an online database of energy use by site, and, optionally, pay the invoice. The benefits are the avoidance of late fees and billing errors and the creation of an energy database. This is typically purchased by Procurement or Sustainability.

2. Sustainability or EHS-related. This software often has modules for EHS-related and/or sustainability needs and uses utility bill data as the data source. The benefits are reduced cost and risk through increased automated tracking and reporting. EHS, Sustainability, Corporate Energy Management, Finance or Facilities teams are the principle purchasers in this scenario.

EMS solutions based on submetering data and which support daily operations

3. Submetering-related (not associated with control). These solutions require submetering of certain energy loads to manage energy use in real time or to allocate energy costs to product lines, customers or tenants. The benefits are lower cost because operators can act upon real-time data, or increased revenue from customers or tenants. These solutions are purchased by Operations, Manufacturing, Facility or Real Estate teams.

4. Demand response-related. Increasingly, demand response vendors offer an EMS to track energy use at one or multiple facilities. The main benefit of demand response is financial payment, which is often a useful way to fund the purchase of submeters and an EMS. These systems are purchased by Operations or Facilities.

5. Control-related. These solutions are asset-specific (HVAC, lighting, manufacturing line, data centers, refrigeration, lighting, etc.), require submetering, and often offer the ability to control assets (either hardware or software based). The main benefits of these solutions rest with operational reliability, with energy management as an optional, and growing, feature. These tools are purchased by operations or facilities and are often specified at the time of construction of the building or manufacturing process.

Unlike carbon software management, many EMS solutions frequently differ by industry and facility type and here are a few examples. EMS solutions from Invensys, Rockwell Automation, and PowerIT are optimized for heavy-energy-use manufacturing sites or industrial processes, while others, such as BuildingIQ, Clean Urban Energy and Serious Energy focus on large commercial buildings. Others, like Credit360, C3 and CA Technologies focus on enterprise-wide energy tracking. Firms such as Phoenix Energy Technologies, Verisae and Novar have strong experience with retail chains.

Many EMS are driven data from submeters, BMS controls, sensors or other physical monitoring devices. Data from these physical monitoring devices must be stored, often in software installed within the company IT network to meet security requirements. Thus, while SaaS-based EMS systems, in which all software is installed outside the company's IT infrastructure, have received much press lately, the reality is that for many EMS applications based monitoring data, software must be installed at the company site. Installation of onsite hardware and software increases project cost.

Use the Cases to Refine Needs and Narrow the List of Potential Vendors

The above use cases help managers refine and prioritize their needs and begin to narrow the field of vendors to consider for a short list. While many factors are useful, understanding the type of data (utility bill or submetered data) used by the EMS, industry strength of each vendor, and a prioritization set of needs based on these five use cases help manages demystify the myriad of EMS offers that exist today.