Consolidation continues in energy management software sector

Corporate interest in managing utility costs is driving unprecedented innovation, as well as significant mergers and acquisitions.

Just one day after being named as one of the top five companies in energy management software, Minneapolis-based Verisae was bought by a private investment firm, Marlin Equity Partners.

With more than $1 billion in capital now behind it (although I'm sure all of that won't all be dedicated in Verisae's interest!), the move could help the developr compete much more aggressively with the other four companies recently named as market-leading providers in the category by independent analyst firm Verdantix: CA Technologies, CarbonSystems, IBM and Schneider Electric.

Verisae develops applications that provide companies with data about their facility power consumption, as well as insight about how to improve efficiency, with a particular focus on the grocery and food sector. Its typical customers spend from 1.5 percent to 3 percent of their annual operations budget on electricity, but by using Verisae's software as a service, they can cut those costs anywhere from 15 percent to 25 percent annually.

"With Marlin's backing and Verisae's comprehensive software offering, industry leadership and world-class client base, we look forward to accelerating our growth and extending our product solutions to service the evolving and rapidly changing needs of the grocery, food service and specialty retail markets," said Jerry Dolinsky, Verisae's CEO.

Terms of the transaction weren't closed, but it's just one of several notable aquisitions that have been announced in the past two years. Another example is IBM's buyout of TRIRIGA, which also develops software that help companies improve the operational efficiency of office buildings and facilities. 

The energy management problem has attracted both startups (such as Verisae) and traditional enterprise resouce planning and management software vendors, which is one reason for all the consolidation.

Even though many companies resist investing in "green" technologies, there's a really easy case to be made for adopting software that helps reduce energy costs.

"Large firms such as AT&T, Google and IKEA have launched strategic energy management programs to better manage growing energy costs, mitigate security of supply risks and benefit from the potential of decentralized renewable power generation," said Janet Link, a Verdantix senior manager who is co-head of the firm's energy practice.

Two-thirds of the customers surveyed by Verdantix for its recent report indicated that they plan to spend more money on energy management software over the next three years. Their top feature requests include utility bill management, energy monitoring and targeting, and energy reporting and certification.

For more background on environmental and energy management, see these stories:

12 environmental management software developers to watch 

15 energy management vendors worth your notice