The “Productisation” of water tech?

Is the customised system integration business model under attack?

GE recently introduced a new control system product to the market. It is specifically target at the operators of small scale wastewater utilities in North America.

It is notable because it has clearly been through a proper product development process.

First of all they have identified a customer segment. In most industries this would not justify being put in bold, but it is not a normal approach in water.

They have clearly looked at the needs of that particular customer segment. Small scale wastewater utilities do not have much by way of money, staff or technical capabilities.

So GE produced a robust, low-cost control appliance that can be installed and commissioned by any electrician and operated through an intuitive interface on any PC or mobile device.

The product is highly standardised, and because it is tightly targeted at a particular customer segment it has limited features it is cheap and easy to sell. In fact you can buy it online!

The product has been enabled by a new cloud based industrial control technology owned by GE, the PACSystems® RXi platform, but the underpinning technology gets minimal coverage in the marketing material. The marketing rather focuses on translating the features into specific benefits for the customer segment.

GE was struggling with the prevailing business model in water, which is to provide extensive customised application engineering around a core technology. This model does not play to GEs strengths, and in fact its rigid system of management controls meant GE didn’t have the flexibility to provide customised solutions. No doubt they were not enamoured with the dismal profit/risk ratio either.

However GE have the corporate muscle to redefine how the water sector operates. They have the product development capability to generate highly standardised (and therefore highly profitable) products and sell them directly to targeted end-user customer segments.

GE’s Pump Station Appliance is part of a wave of Productisation in the water industry, which will unlock a great deal of value, but be the undoing of a number of industry players along the way.

More on this later,  but contact us at H2Otalent if you want to get the talent that can get you ahead of the wave.

Sydney city recycled water network to employ ASR

A recent article in the Sydney Morning Herald reported that the City of Sydney plans to utilise an aquifer to the south of the city for storage in the operation of a city-wide non-potable water network. The network will be integrated with a  decentralised trigeneration  network.

The most interesting thing about this is that the corporatised water utility Sydney Water provides water and wastewater services to Sydney City, and the City of Sydney local government entity has no experience with operating water and wastewater systems. In fact the terms of the original design tender specified that the system should be able to constructed under a PPP arrangement, where presumably a private entity will operate the system.

This will be complicated from a governance perspective, let alone an engineering one, and I will be watching progress with interest. The introduction of the aquifer storage solution introduces a lot of additional complexity from an environmental perspective. 

Certainly if it gets off the ground, this will be a project of sufficient size to be well and truly on the global water radar, and the global water majors will be interested. I wonder who will have the capability and the appetite to take on the risk profile of a large unconventional system like this one?