Last week , I attended analyst day EnerNOC , a meeting of financial analysts and industry for an update of its management team on strategy EnerNOC .
In short, EnerNOC has positioned its offer, the equipment and the ability to spread beyond the ( DR ) programs , requires a response in the software. This meeting was an update of the plan , especially for the financial community. With a profitable business heart, more than $ 100 million in cash on the spot and an infusion of talent of enterprise software, EnerNOC has a real chance to become a leader in the energy management sector emerging software business .
Key Notes Presentations
Market Opportunity : EnerNOC sees a U.S. market $ 1,500,000,000 DR, and three times the world market DR . He believes that the market for software energy management , called Energy Intelligence Software (EIA ), 5 million.
EnerNOC believes that is in balance and ready to be a leader in the EIA , as it has become a leader in space RD against many competitors.
EnerNOC adds software experience across the enterprise , including the Board , the management team ( new CFO and vice president of new business sales ) , product management , product marketing and engineering.
In RD , the largest market opportunity for growth in Texas ( ERCOT ) and international markets. DR strategy is to diversify away from PJM , expand sales of traditional services , and international expansion .
EIA for the market , the strategy is to focus on the first 100 customers 000 commercial and industrial (C & I) in the United States and sell the company 's main products : SupplySMART services (provision and management of public bills ) , EfficiencySMART ( monitoring energy use ) and DemandSMART (response time and control the use of the application).
Sales strategy is to close 50 large C & I customers who have averaged $ 200 million in annual energy costs on software deals $ 1 million in three years. EnerNOC already has four clients at this level and proposals in place with ten others.
According to company officials , the main competitors of sales software Schneider Electric, Siemens , Constellation, Ecova , Comverge and IBM.
From the point of view of the business model , EnerNOC seeks to diversify beyond its strong seasonality ( 100 percent of EBITDA and 70 recipes come in Q3 ), with software sales grew revenue and no DR - Q3.
Growth strategy has three components: 1 ) develop DR United States , 2 ) International Drive DR activity , and 3 ) sales Adoption power management software boardwalk . $ 40 million in R & D , mainly driven by Texas, $ 90 million in R & D and $ 70,000,000 worldwide EIS software , made $ 1 annual contracts : This strategy revenue growth $ 200 million with the following breakdown will add with key customers of C & I M.
It expects gross margins to plunge 50 percent to 45 percent next year, and then grow 50 percent thereafter .
Groom Energy Analysis
As for the software industry , with the addition of many people with experience in software , the company is very different than it was three years ago. We are pleased that the company is investing more in solving management utility bill ( monthly billing ) for customers rather than interval data in real time , as the development is broader customer needs that we see in market .
The relationship that has thousands of customers in its entire range DR ( DR was clearly a "killer app " ) and its strong position to execute well on its product plan balance .
EnerNOC offers and roadmap includes a number of capabilities that are attractive to the market, including a better understanding of tariffs for customers, using management software for finance fresh energy DR (most providers can not do) , one stop , pic - rate analysis to action at the institutional level (eg, weather changes ) , and energy analysts to analyze energy data for installation engineers and short- time energy .
A superior blend of recurring revenue and high margin software will help to increase the valuation of the company (the company is currently valued at 1X revenue ( enterprise value / earnings).
The transition will not be easy , however. EnerNOC DR is a great company success essentially giving money to businesses to close things or to supply local generators. The sale of the companies pay for the software in a highly competitive field of software is a major challenge.
Saw some $ 1 million annual software provides energy management software , if we believe that the average estimates of the value of EnerNOC transactions are too high, but the company can do to this on a larger volume of lower value transactions . The roadmap does not include enterprise asset management products , so companies that want to have a unique solution for asset management and energy management will consider other providers.
In general , however , EnerNOC is well positioned to be a market leader . Only a handful of other companies have the breadth of products and financial resources to challenge them.
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