Who is Opower, Inc.?
Opower, Inc. (OPWR) is a leading provider of cloud-based software to the $2.2 trillion utility industry. Utilities use their software platform to deliver key customer-facing applications that reduce energy demand and improve customer perception of the utility. Their software analyzes energy data and presents personalized insights to consumers in order to motivate reductions in energy consumption. These reductions are valued as a source of energy much like a conventional power plant. Opower believes that they are poised to transform the way the utility industry meets energy demand.
Opower, Inc. is set to IPO this Friday, April 4, 2014. They are expected to offer 6.1 million shares at between $17-$19 per share. Morgan Stanley and Goldman Sachs are the main underwriters handling the offering.
What do they do and how do they expect to maintain a competitive advantage going forward?
As stated above, OPWR is a cloud-based software company that offers services to utility providers in an effort to solve the two critical challenges currently facing the industry players. The two largest problems at the moment are that utilities are under political, regulatory, and environmental pressure to build fewer power plants, find cleaner sources of fuel and keep rates low, and utilities are looking for ways to strengthen customer relationships. They are looking to strengthen customer relationships for the obvious benefits that would come with customer retention and brand loyalty, but also because regulators reward utilities that can show that they have improved customer satisfaction.
In fact, last year alone, utilities spent $11 billion on programs designed to solve these two issues. In the area of energy efficiency, in the US alone, utilities spent $6.9 billion in 2012, and since 2007, this spending has grown at a 21% compound annual growth rate, according to a July 2013 report from the Institute for Electric Innovation. In regards to Demand Response (peak
