A new global survey of 65 software providers conducted by independent analyst firm Verdantix reveals a total of 126 software applications that support environment, energy, carbon, corporate responsibility, sustainability and health and safety business processes.
The analysis finds that four niche categories of software applications—carbon management, sustainability reporting, energy management and environmental compliance—will be swept away by a new era of integrated sustainable business software platforms.
“In the past, issues like environmental compliance, water management and CSR reporting were low priorities for the majority of organisations” commented Verdantix analyst and author of the report, Peter Charville-Mort. “But in the last 3 years energy costs, sustainability brand risks, and looming climate change regulations have transformed sustainability from a CSR issue into a strategic challenge. Software providers like Enviance, Hara and SAP have responded by investing in a new breed of sustainable business software platforms.”
The Verdantix report, Buyer’s Guide To Sustainable Business Software, is based on an analysis of 65 software firms and includes data on product launches since 2005, customer wins by industry and the job titles of individuals who have purchased sustainable business software. The new era of sustainable business software is characterised by:
Explosive growth in the number of applications: From 2005 to 2010 the number of sustainable business software applications grew from 31 to 126—an increase of 406%. In 2009 alone, software vendors launched 32 new applications and 2010 has already seen 15 additional product launches. Supply-side growth will increase buyer education and establish the new software category.
Sustainability leaders dominating purchase decisions: 93% of firms supplying sustainable business software predominantly sell to managers with job titles like VP Sustainability and Chief Sustainability Officer. 64% of the suppliers have sold to individuals in environment, EH&S or CSR roles and just 18% have sold into the IT organisation.
Creation of SaaS applications for sustainable business: The dominant deployment model offered by sustainable business software suppliers is Software-as-a-Service (SaaS). Even IT heavyweights like CA Technologies and SAP take this approach. SaaS enables buyers to implement software without recourse to their own IT function and facilitates global scalability.
Integration of all sustainability processes into one platform: The era of integrated platforms is beginning now through software innovation. For example, Enviance offers a value proposition based on the concept of Environmental ERP. The Verisae product strategy is built on the idea of Sustainable Resource Planning and in the last 18 months SAP has acquired Clear Standards for carbon management and Technidata for environmental compliance.
“A new era of sustainable business software has arrived, driven by a boom in supply side activity which anticipates the increasingly strategic nature of sustainability” commented Verdantix Director, David Metcalfe. “But our analysis suggests that software providers in this space must cross the chasm. During the next 18 months suppliers need to expand their customer base from visionary buyers like News Corp and Tesco to early majority buyers. Only a handful of today’s 65 vendors will survive the inevitable consolidation. Heads of Sustainability, Energy and Environment must ensure that they don’t pick a loser in 2010 and face a rip-and-replace nightmare in 2012.”