Earlier this month, Verdantix said that corporate spending on EHS software will grow at an annual rate of 15% over the next five years, creating a $1 billion market by 2018. The market forecast included in the new Verdantix report is based on financial data for 9,307 firms with more than $500 million in annual revenue headquartered in Australia, Brazil, Canada, France, Germany, India, the U.K. and the U.S. Market growth is also a reflection of private equity and corporate venture investment in the sector which totals more than $400 million in the last 5 years, Verdantix says.
Jordan Nadian, Verdantix Analyst and author of the report, said: “Significant investments in EH&S software by oil and gas, mining and industrial manufacturing firms such as Syncrude Canada, Orica and Flexpipe Systems are driving a boom in the EH&S software market. Firms at different stages of maturity are getting in on the action. Those with existing EH&S software deployments at a site level are upgrading to more comprehensive systems to improve operational risk management and standardize processes. Laggards, who currently rely on Microsoft Excel and Sharepoint to achieve regulatory compliance, are investing in entry-level solutions, buying a few modules at a time to reduce their risk exposure.”
The Verdantix report, “EH&S Software Market Size & Forecast 2014-19”, is based on interviews with 250 heads of EHS in 13 countries and deal flow data for 2013 sales from the 13 leading providers of EHS software. Here are some highlights:
- Corporate investment in EHS software for 2014 totals $584 million across eight of the world’s largest economies.
- EHS software spending will exceed $1 billion in 2018 in eight of the world’s largest economies reflecting a 15% annual rate of increase.
- Comparing industries, compound annual growth rates range from 6% in the mining sector to 17% in chemicals.
- Oil and gas firms will account for 43% of total spending in 2019, representing $494 million of annual investment in EHS software.
Ross MacWhinney, Verdantix Senior Analyst, said a combination of factors account for the significant growth in the EHS software market. All companies face risks from a failure to meet a complex and constantly changing regulatory landscape. In addition, Verdantix’ research found that firms invest in EHS software because they feel that without it they are falling behind industry best practices, MacWhinney added. They want to improve performance on metrics such as injuries, fatalities and plant shutdowns, and they need to provide consistent data for sustainability disclosures.
Finally, according to MacWhinney, suppliers such as CMO Compliance, Enablon, Intelex, MSDSOnline and Workiva will benefit from the EHS software market expansion.
Don’t hesitate to contact us for free guidance regarding your EHS software selection process, or to consult our solution directory of EHS software.
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