The modeling software spin-off of engineer-construction manager MWH Global clearly loves its clients, and from the array of testimonials displayed on its website, they seem to love Innovyze right back. The firm has carved a lucrative niche as a leading developer of modeling, simulation and operating analysis software for "wet infrastructure"—water and wastewater treatment plants and systems—that has captivated utility executives and even their engineering consultants who may compete with Innovyze's parent in other arenas.
Touting its blend of high-tech prowess and industry-specific expertise, Innovyze offers its customers a more powerful package. "Our software provides a total solution because it allows owners to understand the related issues and risks they face," says Paul F. Boulos, a 20-year MWH veteran who now is Innovyze president and chief operating officer. "IBM can't do that." He says repeat business accounts for two-thirds of its revenue and that 25% of all software orders received in 2010 were by referrals. Innovyze gets 1,200 "thank you" e-mails annually, says Boulos. While the firm does not release numbers, he touts a three-year compounded annual growth rate of 57% in revenue and 30% in operating income and a "fiftyfold" increase in staff. The firm has 104 employees.
Customers range from small U.S. municipal systems and environmental infrastructure managers in Malaysia to multisite facility managers and engineers such as CH2M Hill, HDR and Black & Veatch. Chicago-based Veolia Water North America, which manages the water supply for about 650 communities and about 100 industrial sites in the U.S. and Canada, boosted its three-year relationship with Innovyze last year by using the firm's InfoNet software for asset management. It tracks and analyzes data in water distribution and wastewater-stormwater collection.
"The solution works for us for a couple of reasons: It is scalable, it allows all of our information to be accessed in one place, we can host it on our own servers, and it is priced to allow us to be competitive with our offering," says Jim Galipeau, Veolia NA's Tampa, Fla.-based vice president of asset management. "They stand apart because they listen to our feedback. We use this software at multiple locations around the country, and needs are different. They have been very good about improving the software to meet those needs. We have also deployed it as an enterprise solution so we can compare and benchmark our various projects."
On Nov. 22, Innovyze announced that JEA, the power-water utility in Jacksonville, Fla., will use its InfoWorks WS application to manage the municipality's recycled- water distribution system that delivers 13 million gallons per day of reclaimed water for non-potable use. The utility already uses two other apps, InfoWorks CS and InfoNet, to model and manage its collection system. Another app in the Innovyze arsenal, IWLive, provides a control-room level of prediction regarding how a water system's pressure and flows will behave based on what Boulos says is the first real-time integration of SCADA, weather and hydraulic modeling data.
Innovyze's roots actually date back to 1996, when it was founded as MWH Soft, says Boulos. "Engineering consultants and water/wastewater utilities were underserved by a number of entrenched software giants who were unable to keep up with the rapid pace of innovation in our field," he says. In 2009, the firm adopted the Innovyze name—a coinage that reflects the firm's core functions of being able to "innovate" and "analyze," Boulos says—after it acquired another sector giant, Wallingford Software.
"We realized that a shrink-wrapped software company was a completely different internal culture to our A/E/C firm, and to make it successful, the software had to be ubiquitous. It could never give MWH a competitive advantage," says MWH Chairman Robert B. Uhler, who stepped down as CEO last month in a planned shift to President Alan J. Krause. "For our engineering company, it had to be hands-off, and that was controversial." Adds Boulos, "We monetize our intellectual property, and it is available to everyone."
Uhler says that "one major complexity" was resolving compensation differences between software employees and engineering staff. "We had to figure a way to fence-ring the compensation components without creating jealousies," he says. "It is the vital thing that most A/E/C consultants struggle with to grow out of consulting. Retention of talent is dependent on finding solutions here without blowing up the firm into inter-unit rivalries."
Innovyze executives see future market growth in owners' growing push to maximize the operational efficiencies of existing facilities as capacity expansion slows. "We want to identify things before they break," says Boulos. The firm sees opportunity in asset management and in improved energy-management analysis. Uhler cites utility industry statistics that point to pumping as 75% of the water sector's operating cost. It also offers added training and maintenance services.
"It's a huge business app," says Uhler, who is an Innovyze board member. "Unlike engineering, software and intellectual property is a speed-of-light changing business," says the executive. "The future IT world promises easier code writing, distribution, storage, real-time control and global access. We cannot totally plan our destiny, we just have to be cat-like quick to change and morph. Agility may be the most important trait to assure sustainability in software."