Itron Defends Dominance of MV-90
Itron’s MV-90 meter data collection and processing application has had an unrivaled market presence in North America. Recently, a new entrant has chosen to challenge their dominance. Many factors indicate that Itron can defend their dominant market share, yet can one product meet all customer demands?
We investigate the MV-90 solution (www.itron.com ), its evolution, and the resulting prospects of maintaining a near monopoly in this highly specialized market.
MV-90 has achieved an install base of over 600 utilities during its 20 years of market penetration. Through perseverance and continued customer contact, MV-90 has been developed into a broad solution set of meter data collection and management functionality. In meter data collection alone, the MV-90 can communicate with 160 different meter specifications. Key meter data functional capabilities include validation, estimation, and totalization.
Validation of meter data includes checking to ensure that the data has arrived accurately and much more. The MV-90 base product has over 100 different validity checks built-in. For instance, validation can ensure meter register reads are valid, uncover spikes in consumption, and make historical comparisons. These validity checks are required by a number of rule making bodies in regions such as ERCOT and California. All customers use some configuration of these rules.
Estimation, a function within the MV-90 base product, allows utilities to make adjustments to meter data that has failed validation. Estimation techniques supported by MV-90 include plug, redundant meter reads, and linear interpretation.
Totalization is also included in the MV-90 base product. According to Mr. Driscoll, MV-90 Product Line Manager at Itron, roughly 90% of Itron’s customers use the totalization feature. Through totalization, utilities aggregate consumption across service points for commercial and industrial (C&I) customers. Some billing systems include totalizaiton, for instance those provided by Lodestar, and thus its inclusion in a meter data collection system may not appear imperative. However, most billing systems are not fully capable of managing interval data and aggregating loads across service points. Moreover, billing systems may not be the right place for utilities to manage totalization according to Mr. Driscoll. Multiple business functions, billing and others including load research, forecasting, substation design, market research, and energy trading, rely upon C&I totalization data. By having totalization at the meter collection level, other business functions can pull the same set of data from a single source.
There are a number of additional modules that can be purchased to enhance MV-90’s functionality. These additional modules are targeted to address specific needs of a small segment of utility customers. Two modules in particular have become a point of contention with the advent of a new entrant to this market. These are TCP/IP meter data communication protocols and ODBC drivers.
Itron supports TCP/IP protocols through an additional module while the new entrant includes this in their base product. According to Mr. Driscoll, the most common communication protocols require land lines or downloading data from handheld retrievers. In fact, less than 10% of Itron’s install base has had a requirement for their TCP/IP add-on module.
Recently, Mr. Driscoll has noticed an up-tick in the interest for their TCP/IP module. The increased interest is correlated to the telecommunications trend toward digital cellular technology. As cellular communications migrate from analog to digital, the meter data communications protocols migrate towards TCP/IP.
Itron has built their collection engine upon a Btrieve database unlike the new entrant. According to Mr. Driscoll, Btreive has been performing well, proving to be the fastest and cleanest database for the job. However, a minority of approximately 50 of the 600 customers require greater access to meter data. For these customers, Itron provides an ODBC add-on interface. Demand for the ODBC interface has been dependent upon the size of the utility, with larger utilities demonstrating greater demand.
In May 2004, Itron released a major upgrade, the MV-90 xi, and plans to discontinue support for older versions after June 2007. The MV-90 xi release migrates the application from DOS to Win32 Microsoft operating system architecture. Rewriting the software to comply to the Win32 architecture addresses issues of usability and maintenance. In terms of usability, the Win32 architecture is much faster and provides for a better user interface. In terms of maintenance, Microsoft is no longer supporting the DOS architecture, making the system migration to the Win32 architecture imperative for ongoing maintenance by customers. As a note of parity, the new entrant software is on the Win32 architecture as well.
Customers upgrading to MV-90 xi have to pay a licensing fee beyond their usual maintenance fees which is discounted from the price associated with new system installations. Requiring the purchase of a major upgrade at a price greater than the usual maintenance fee is common when put into perspective of overall industry practices.
After having no significant competitors for nearly twenty years, the key question is, can MV-90 maintain its dominance or will it find itself competing for significant market share?
As the above analysis indicates, MV-90 is sufficiently developed to address customer demands throughout North America. Its broad functionality in meter data communication and processing and numerous add-on modules ensures that the product can be configured to meet most, if not all, North American customer requirements. For these reasons, we should expect MV-90 to continue to attract most customers. Yet some will defect to the new entrant. When they do, it will be a matter of “fit” and “price”, the vendor providing the right solution fit at the lowest lifecycle price, winning the deal.