The year is 2020, and the enterprise asset management market (EAM software) is booming. As the focus has moved from simple maintenance management to organization-wide asset management, the market has changed accordingly. We asked industry experts for their insight into current and near-future EAM market trends, EAM market size, the state of the market and more.
- The EAM software revenue market is made up of project/performance management, asset performance management and asset/project portfolio management.
- The EAM market is predicted to grow from the current valuation of $5.1 billion to $8.2 billion by 2024.
- Asia and North America are the fastest growing EAM markets.
- The main entry barriers preventing organizations from purchasing EAM software is cost, hesitance to adopt new technology and volatile geopolitical climates.
- Automation, talent retention, customer experience and climate change are going to be big players in the future of EAM.
EAM Market Share, Size and Scope
First, let’s define what the enterprise asset management software market entails by discussing its scope. EAM software, as the name suggests, focuses on asset lifecycle management. This ranges from maintenance execution to asset monitoring to procurement forecasting — if a task involves interacting with an asset, EAM software can likely perform it.
The EAM market involves three major revenue cycles. Project and performance management helps users track and manage projects from inception to completion in an organized, efficient way. Users can monitor the performance of individual team members or the whole project team to ensure everyone is holding up their end of the deal and keeping projects on track.
Asset performance management (APM) combines analytics, data capture and visualizations to improve the reliability, availability or performance of physical assets. It utilizes condition monitoring, reliability-centered maintenance (RCM) and predictive forecasting to make your assets work for you.
Asset and project portfolio management takes data derived from APM and uses it to help users make smarter, more data-driven decisions about future asset procurement and maintenance. Its goal is to improve ROI and maximize the return on every asset.
EAM software is used globally by many different demographics. Some of these include:
- Oil and Gas
- Mining and Metals
- Linear Assets
- Facility Managers
As the market grows, the breakdown of the EAM market share changes. This graphic shows how the regional make-up of EAM market share is predicted to change between 2017 and 2024:
The top solutions on the EAM market are (in no particular order): IBM, Oracle, Infor, SAP, Assetworks, ABB (Ellipse), eMaint, Schneider Electric, Dude Solutions, Fujitsu LTD, IFS, Fiix, MAPCON, MPulse, AssetPoint, MicroMain, UpKeep, and AgileAssets.
EAM offers benefits to almost every area of an asset-focused organization, so it’s no wonder that the use of this type of CMMS software is becoming more prevalent. The number of industries and types of users that rely on EAM is only growing, so let’s dive into some EAM market trends from our industry experts.
EAM Market Trends
So what’s happening in the enterprise asset management software market? We asked some experts to share their insights, and here’s what they had to say.
As our economy and civilization become increasingly globalized, it’s no surprise that software follows suit. EAM market size is growing all over the world — one study predicts that by 2024, it will grow from the current valuation of $5.1 billion to $8.2 billion. That’s a $2 billion increase from where it was predicted to be in a similar study in 2017.
So the market is growing, but where is this growth happening? According to Deb Noller, CEO of Switch Automation, it’s happening in the East:
“The boom of new development in Asia is driving building owners and developers to differentiate, particularly in Japan, Singapore and China. In their more densely populated cities, residents pay a premium not only to live in — but even next door to — greener buildings to capitalize on improved air quality. The United States is seeing an influx of VC funding and PropTech adoption, led by companies seeking to capitalize on more efficient building operations and attract top tier tenants.
“Countries like Canada and Australia have a stronger risk tolerance and appetite for embracing emerging technology with fewer procurement restrictions, so I anticipate they’ll continue to grow. Additionally, [the] Netherlands and Scandinavia will most likely continue to use PropTech to improve employee health, well-being and productivity.”
Jerry Browning, Product Manager at IFS, thinks that the waters might be difficult to navigate, and that geographical location is less important than regional flexibility:
“There will be a lot of activity in North America because of the sheer number of assets here. Follow where the high-value critical assets are, and that is where you will see increased investments in maintenance. Geopolitical factors will be on the minds of many companies with assets located globally. The need to shift operations or investment from one region to another will require straight line visibility from the C-suite to asset readiness.”
Greg Dierickse, Product Marketing Director at Fiix, believes that worries over an economic recession will be a main driving force behind the North American EAM market. He says that “with recessionary concerns and the need for integrated operations, we believe industrial verticals will look to use EAM to extend the lifetime value of assets and create production efficiencies. The doubling down will provide much-needed cost savings and uptime commitments, and, more so, have them well-positioned when growth resumes in the future.” So while the United States and Canada may see a bit of a slowdown depending on how the overall global economy turns in 2020 and beyond, they will likely not reduce their spending on EAM.
As Asia’s adoption of EAM grows, North America tries to stave off recessionary profit losses and global geopolitical unrest ebbs and flows, it will be interesting to see where the market shifts. Vendors will have to keep a close eye on the hot new markets and be prepared to jump on them as they arise to get ahead of the growing influx of new platforms vying for EAM market share.
Barriers to Entry
One significant trend our experts noted in the EAM market is that of entry barriers and adoption rates. UpKeep’s 2019 adoption study found that of 271 maintenance managers surveyed, only 39% use a software system to track maintenance tasks.
But why is the adoption rate so low? Surely a system as useful as CMMS/EAM should be nearing universality, right? Unfortunately, it’s not always that simple. Some entry barriers and adoption hindrances include outdated deployment methods, high cost, technology aversion and simply being unaware of the benefits of EAM software. Our experts spoke a little more in-depth about some of the barriers they see daily.
Ryan Chan, CEO and Founder of UpKeep Maintenance, emphasized the importance of ease-of-adoption when searching for or creating an EAM tool:
“When looking for EAM software, ease of adoption should be your highest priority. If technicians don’t use the software correctly, then the software isn’t worth the money you pay for it. Good software requires good data, and technicians are your data collectors. Therefore, collecting data should be easy for them. One of the easiest ways to collect data is with a mobile EAM app. With this, a technician can log maintenance data and complete a work order in a few taps. Doing this should be as easy as when technicians use their favorite app on their smartphone (off the clock, of course!). Bottom line: Ease of use and mobility lead to higher rates of adoption.”
This seems like common sense, but many software systems still lag behind when it comes to an intuitive interface. This failure to bring UI up to a speed that modern users expect is a leading cause of failure to adopt software systems effectively.
Greg Dierickse believes that predictive maintenance, while a boon to users, also poses a potential threat, especially to new adopters:
“We believe predictive maintenance with be one of the key factors that will both negatively and positively impact EAM. It will create both confusion and failure, as well as create enormous value and change how operations operate. As with most innovative technology, sorting out how it lands is half the battle.
“The key is getting the right foundation and building a path to success. Avoid the industry hype and leap-frogging promises. Pick EAM vendors who will partner with you, have proven success with EAM and CMMS, and offer a technology platform that can provide both easy integration with needed data sources, and AI technologies that will test, learn and grow with you.”
According to Deb Noller, “The commercial real estate industry has a reputation for being slow to adopt new technology, and the procurement process has long been an inhibitor to innovation. To alleviate this, many companies are setting up their own investment vehicles, accelerators and incubators. However, there may be some failure if these large corporations can’t increase their appetite for risk, adopt innovation and reduce the time involved in fostering the growth of early-stage companies.
“Startups need cash and customers: many will wither on the vine while waiting for the market to speed up its EAM adoption. To counter this, some geographies offer alternative sources of funding. Many governments provide support in the form of research and development grants or tax incentives to help fledgling companies win funding. All they need do is qualify and apply! And this funding is non-dilutive and, therefore, very attractive.”
This new avenue for funding is a great resource for companies that would normally be iced out of the EAM industry and may cause some big changes in the coming years.
Deb Noller also brought up the issue of wary investors within the industry, a trend that Jerry Browning elaborated on:
“The very biggest companies running EAM are starting to absorb some of these smaller companies that would be a market for a standalone CMMS. So the trend will be towards integrated EAM and ERP.”
This shift from CMMS to an EAM/ERP combo (or, as our CMMS trends predictions article noted, from EAM to APM) has already been in the making for some time and could signal a significant shift in the EAM market as a whole.
The world is changing, and that means software (and software companies) must change to keep up with it. Our experts highlighted some areas they foresee affecting EAM users and vendors, including employee retention, global trade and automation.
Deb Noller focused on the war for talent. Every company wants the best and brightest working for them, but not everyone can have or be the best and brightest. This makes challenge to retain employees when there are many competitive options vying for them ever-present. As remote work, globalization of labor and AI rise, this problem is ramping up:
“The war for talent will push companies to cultivate desirable working environments where people can be happy, healthy and productive. Organizations like WeWork and Knotel are creating a new category of real estate by embracing technology to transform the experience of living, working and playing. By tapping into a brand-new market of tech-savvy end-users, they’re doing for real estate what Uber did for transportation.”
Deb Noller isn’t alone in this thought. A 2019 study performed by UpKeep found that one in three maintenance managers need a larger budget for new talent. They’re taking strides to make this a priority, though. Of those asked in the study, 73% said that staying organized and establishing clear expectations was their number one strategy for retaining talent. A focus on providing safe working conditions was cited by 53% of respondents, followed by 33% who offer above-average wages. Another strategy listed by 27% of managers was focusing on high-level metrics instead of wrench-time. Finally, providing reimbursement for training or further education came in at 24%.
Jerry Browning thinks that the increased prevalence of the internet of things (IoT) will be the most significant challenge for EAM software users and sellers alike:
“With the increased return we are seeing on automation and machinery, we will see more complex machines. This will be a boon to companies investing and building this material, but also [to] a maintenance and reliability program that is built around those assets. AI and IoT will combine into systems that can self-diagnose, triggering proactive maintenance as required.”
Greg Dierickse thinks that focus on the customer is the wave of the future:
“[Lack of adoption isn’t] a technology problem: it’s the ease of use, ease of implementation and growth. It’s a somewhat perfect storm to navigate through getting operations and maintenance teams to use EAM out on the shop floor and in the field, integrating EAM into operations and the business, and nurturing the vendor partnership through a journey to reliability. A solid EAM plans way past implementation and should continue through many years.”
Focusing on reliability and usability as a path to improve adoption rates and reduce the number of customers stuck with a maintenance solution they don’t use is one that is catching on in various software industries, so it’s no surprise that the enterprise asset management software market is following suit. This is especially important for maintenance users as they tend to be less technical than users of, say, business intelligence software. Making the system as user-friendly as possible is something vendors should definitely keep in mind over the coming years.
Ryan Chan also had some input on the power of automation in EAM: “It’s feared by some as a ‘job stealer,’ but it’s actually a job empowerment tool. It gives maintenance managers the ability to ‘work’ when they’re off the clock or multi-task when they’re doing something else.
“For instance, say a machine goes down in a production facility. Maintenance for this machine is serviced by an outside contractor, and the faster the contractor is contacted, the faster the machine is fixed. To ensure the contractor is contacted as soon as possible, the maintenance team sets up an ‘automated workflow’ inside their asset management software.
“The automated workflow looks something like this: IF work request is submitted for ‘Machine X’ AND priority is ‘High’ THEN contact ‘Vendor Y.’ With this workflow, a critical work request does not need to get approved first by the maintenance supervisor. Automation eliminates an extra step and allows the machine to get fixed faster. The bottom line is: automation is a positive thing when it comes to asset management.”
Deb had one more thought on the changing landscape of EAM — literally! “Climate change will continue forcing us to be more creative and innovative as we strive to operate assets in a more efficient and eco-friendly manner.”
Big, exciting things are happening across the globe as technology advances and EAM software becomes more prevalent and more powerful. The search for new ways to retain talent, burgeoning global markets, increased automation and changes in thelaw and climateare earth-shaking movements in the world of EAM, and they will impact almost every corner of the EAM market.
What insights do you have into the EAM market? Share them with us in the comments!
Contributing Thought Leaders
Deb Noller is the CEO and co-founder of Switch Automation, a smart building software company specializing in building performance optimization. With 20+ years of experience in real estate, technology and sustainability, she is passionate about helping enterprises leverage next-generation facilities management technology to execute more efficient business operations.
Ryan Chan is the CEO and founder at UpKeep CMMS. He’s a chemical engineer from UC Berkeley and was named one of Forbes’ 30 Under 30 for Manufacturing in 2018.
As product manager for IFS’s enterprise asset management (EAM) offering, Jerry Browning drives and defines the company’s EAM value proposition, roadmap and investment priorities. He also acts as a spokesperson and evangelist for the product. He has more than 25 years of maintenance and asset management experience, along with an academic background in electronics and electrical engineering at Ohio University and the University of Houston. He was part of the esteemed AEGIS program in the US Navy.
Greg Dierickse, Director of Product Marketing at Fiix Software, has over 20 years of experience working at software companies to help customers digitally transform their operations, including Dell EMC, HP, Oracle, and Commvault. Working in Canada, the United States, Singapore and China, Greg brings a global perspective to changing how work is getting done.