IBM sees big opportunity in water management IT

DETROIT (Reuters) - IBM is pushing ahead into providing technology services to manage water, a market $10 billion market that the company sees growing quickly.

A view of the IBM facility outside Boulder, Colorado October 18, 2006. REUTERS/Rick Wilking

“This to me is an area that’s really going to explode in the next three to five years,” said Sharon Nunes, who heads IBM’s Big Green Innovations initiative. “People see it as a gap. The water market is transforming.”

Big Green Innovations, a play on IBM’s nickname Big Blue, is part of IBM’s so-called ‘smarter planet’ initiative that aims to apply information technology to efficiently manage electrical grids, transportation systems and other infrastructure.

“We are actually looking at three different markets -- industrial sector, for example food and beverage companies ..., local and municipal governments, water utilities,” said Sharon Nunes.

Her group looks at business opportunities in sectors such as water, carbon management, solar technology and desalination.

“We are in discussions with a lot of food and beverage companies and some of the industrial processing companies,” Nunes said, referring to new water management contracts.

IBM is also in talks with “a lot of utilities,” she added but declined to give details.

Government stimulus in the water sector China and the United States, estimated at around $10 billion to $15 billion, will help establish the market for water management, Nunes said.

Governments, investors and human rights activists all see managing fresh water as key challenge in the coming decade. Billions of people already lack access to clean water and development and climate change are expected to disrupt the supply of fresh water even more.

IBM estimates leaks account for up to 60 percent of water supplied, costing water utilities worldwide $14 billion every year.

Managing water resources would include monitoring rivers, water reservoirs and pipes. IBM also provides systems for managing water infrastructure, such as levee oversight and flood control, Nunes said.

The technology company, whose products range from servers and software to consulting services, currently has a commercial deal underway with the Beacon Institute for Rivers and Estuaries in New York to build a monitoring and forecasting network for the Hudson River.

Also, IBM is working with researchers to monitor wave conditions and pollution levels in Galway Bay, Ireland, and is putting together smart water meters in Malta in cooperation with the utilities there.

The company’s flood management and control system is getting a lot of attention from flood-prone countries in Asia.

“We are seeing some initial inquiries from a lot of smaller Asian countries,” Nunes said. “In areas where there is government stimulus packages, there’s been a lot of outreach from some of the companies to IBM.”

Reporting by Poornima Gupta; editing by Andre Grenon