As water crises loom, Xylem says smart tech is the way forward
Xylem Inc. CEO Patrick Decker has a clear message for utilities: smart tech is the answer to looking global water crises. Decker is worth listening to. As the CEO of Xylem, he stands at the helm of one of the world’s largest and most advanced water technology companies. And the subject in question – the potential of new tech to solve water crises – is one none of us can ignore. As droughts break out across the world, temperatures rise, and extreme weather events continue to plague the globe, we will have to manage water as efficiently as possible
Xylem’s share price has risen by 27% so far this year
Source: Yahoo Finance
Speaking through Xylem’s dedicated magazine, Making Waves, Decker said that there are three main “pain points” for the water industry that “rise above the rest”. They are: water loss through distribution networks (think aging infrastructure), stormwater overflow (think flooding), and energy consumption by water utilities (which, through carbon emissions, contributes to the problem of global warming). According to Decker, smart water tech has a role to play in all of these areas. Discussing that role, he said:
“I think the role of smart water technology is predominately in two areas. One is being able to embed more intelligence in the actual equipment and hardware that we sell to our customers. The second is to be able to overlay software and data analytics on top of that hardware. This could be data for an individual piece of equipment or an entire network, which is turned into actionable insights for our customers. These insights can help them reduce their water losses on clean water distribution networks, help them more effectively manage stormwater overflow situations, or reduce their energy consumption on the wastewater side of the network.”
Hence, it should come as little surprise to investors that Xylem has used a flurry of acquisitions, as well as inward investment in R&D, to position itself at the head of this important technological disruptor. He detailed these strategies:
“We’ve been making a number of acquisitions over the last couple of years to further build out our portfolio, to truly make it a portfolio of smart water solutions. I would like to emphasize that it’s not just through acquisitions that we’re doing that. We’re also investing heavily in our own R&D to continue to embed intelligence in our existing hardware and equipment. That’s as important as the software development and data analytics overlay that we’ve acquired through our new analytics platform. It’s important to recognize that this is not about software versus hardware. This is about marrying the two together to really be able to derive the best insights for our customers.”
As the global need for smart water tech continues to ramp up, Xylem has made no secret of its aggressively proactive moves. Today, it has already put itself in a position that few, if any, of its peers will be able to match.
Dominion holds Xylem Inc. in its Global Trends Managed Fund.
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