The environmental industry remains immature and fragmented, but if that's tough to deal with, consider the double challenge of industries that serve environmental businesses.
For instance, the market for computer software designed to help companies track their regulatory compliance shows great promise, yet vendors have been frustrated by slow market development.
Three years ago, the Environmental Protection Agency estimated eight million potential customers for automated systems for regulatory compliance. At the time, only three companies were selling software for the purpose; two years ago there were 200 and, at last count, more than 500 companies selling some kind of environmental software.
The market for such information products is currently compliance-driven and application-specific. The most popular package does inventory and reports on chemicals under the guidelines of SARA Title III (a federal law requiring hazardous waste generators to report their wastes). Other programs in demand handle Material Safety Data Sheets and Occupational Safety and Health Administration regulations, and software is available for emergency response, risk assessment, waste tracking and audits. A number of information databases are also sold primarily to manage and track environmental laws and regulations.
Roughly 95 percent of all systems in use are PC-based, #i according Elizabeth Donley of Donley Technology of Garrisonville, Va. Donley published the first edition of the Environmental Software Directory in 1989. Companies have been slow to penetrate markets because sales efforts have been primarily educational. Compounding the problem is lack of enforcement of environmental laws, which gives waste generators little incentive to manage their hazardous wastes properly.
"Right now merely the act of filing a report seems to be enough," says Tim Faff, one of the developers of Saratrax, a system created at IIT Research Institute's facility in Lanham, Md. Saratrax produces computerized ready-to-mail forms for hazardous waste reporting.
Most potential customers don't see the value in having forms automated or even correct when there appears to be no repercussions for inaccuracy. Sales have been below projections for virtually all software companies, and the attrition rate has been predictably high.
IIT has continued Saratrax because financially it is relatively insignificant to the organization. IIT does foresee potential profits from the $1,600 package, however, and has added a service component. Customers encounter the most difficulty with Saratrax in entering their original inventory and defining the chemical properties of the substances they have on site. IIT now emphasizes support services to help users overcome these initial barriers.
One of the recognized leaders in environmental software is Envirogenics Inc. of Langhorne, Pa., which distributes CHEM Master. Since December 1986, it has sold more than 500 of the programs at $2,500 apiece to customers ranging from the large quantity generator James River Corp. of Richmond, Va., to small quantity generators like hospitals and schools. Other Envirogenics products include MSDS Generator and Event Master, which is used as an employee training tool and for OSHA recordkeeping. New software being developed includes a waste tracking system. Envirogenics also sells services but estimates that, so far, only 5 percent of its customers hire it to enter inventory.
Versar Inc. of Columbia, Md., developed the Environmental Compliance Management System (ECMS) in 1985 as a multi-subject information management software package. The entire ECMS sells for $11,000 but can be purchased in separate modules. Versar has sold ECMS for mainframes to three large generators and about 10 PC systems. Many of the larger generators have developed their own systems in-house, but few have had success commercializing them. Du Pont made an effort to sell its system last year but found the market unreceptive.
Although most vendors agree that the number of potential customers is close to four million, none has any idea of market penetration. Most data provided to state regulators last year have not yet been processed, and these reports may reveal the extent of automated reporting. State officials seem to feel it is minimal at this time, however. The EPA clearly aims to use more automated systems, both inside the agency and in industry, especially those that can trade data back and forth.
Industry consensus is that there are probably about 10,000 systems in use. Obviously there is a tremendous opportunity for the right product at the right time, and many vendors anxiously await the boom.
Grant Ferrier is editor of the Environmental Business Journal, San Diego, Calif.