EH&S Market Buoyant Despite Oil Price Crash
12 months ago, CEOs of EH&S software firms were quaking in their boots as oil prices tumbled below $50 per barrel. With spending by oil and gas firms accounting for a huge proportion of the total outlays on EH&S software, the fact that capital projects were being put on ice and oilfield services firms were scaling back spending, risked slamming the brakes on the EH&S software market – which Verdantix forecast to grow annually at 15% back in August 2014.
However not only have EH&S software vendors managed to hurdle this significant barrier with relative ease, but private equity firms have been flocking to the market to invest in the likes of Intelex and Enviance.
As part of Verdantix’s research for our upcoming Green Quadrant EH&S software benchmark, all 22 participating vendors have reported annual growth between 4% and 52% over the past 12 months. In particular, Enablon announced in October that it had achieved 50% growth in software and SaaD orders in the year to date.
So why has the EH&S software market been so resilient?
In the past EH&S vendors found it challenging to articulate the business case for their solutions. There are lots of factors that go into the business case: compliance, reputational (amplified by social media, operational, license to operate. But our research points to the fact that by saving significant time on data collection and reporting across a broad range of environmental, health and safety metrics, EH&S software has proved invaluable to oil and gas executives under pressure to cut costs and make efficiency savings as key to the strength of the demand at the moment.
With forward-looking firms looking to integrate EH&S with operational risk management and capitalize on the software vendors’ analytics functionality to proactively manage EH&S and incidents, the future looks bright for the EH&S software market.