Israel’s TaKaDu Offers ‘State of the Art’ Water Monitoring Software for Water Utilities

Amir, as the CEO of TaKaDu, a software company with water utilities as clients, what possible market opportunities in So. California bring you from Isreal?

Amir Peleg: In a nutshell, TaKaDu is a monitoring software company that uses online data that comes from the water network—flow and pressure mostly—and that enables the network to be managed in a more efficient manner. We use this data to understand how the network operates and to determine when anomalies and inefficiencies occur. The ‘normal’ ones are leaks or bursts, but there are others as well. We convert that raw data into knowledge about every fault that happens in the water distribution network and provide a set of information about where, what, and how big the fault is. In this way, people who operate the network can prioritize repairs to change equipment, to replace pipes, and so forth.    

We offer TaKaDu in a software-as-a-service model, based in the cloud. This makes our life much easier because it makes it very simple to deploy the solution with customers – all they need is a web browser, and there is no physical installation. That is why even though the company is only four years old, we cater to customers from Australia through Europe and Latin America.

What attracts your company to the US and Southern California?

Amir Peleg: We believe that the US is ripe for water network monitoring and will remain an opportunity for the next few years. When you look at the different regions in the US, everyone points out that Southern California will understand why we need to reduce water loss. People here appreciate that scarce resource. Since we got in touch with Psomas a couple of months ago, we’ve seen that every time they approach a utility there is genuine interest to hear more about water network monitoring. So I traveled those 10,000 miles with a smile, coming over to a bit of a road show together with the guys at Psomas, and indeed we got great feedback.

What are the particular attributes of the water utilties here in California and Los Angeles that are particularly attractive to TaKaDu?

Amir Peleg: I can’t really comment on the differences between California and Arizona or Nevada and Texas because I haven’t been there. But I must say that all the people I met across the different utilities over the last couple of days have one target: to reduce water loss. That water is not something that can easily be recovered. You need to conserve it and manage your network in a more efficient manner. I think all of them have that drive to be better, and they’re trying to close a certain gap created by no one having invested in upgrading utility infrastructure  over many years. So when I come through Southern California and I travel and meet people over here, everyone appreciates the scarcity of water and the fact that they cannot remain dependent on delivered water from the Colorado River and the fact they need to closely manage their infrastructure.

Amir, what is it that lead TaKaDu to pass on the United States and California for the last four years, going first to other markets in the UK, Australia, etc.?

Amir Peleg: Some of those reasons are still valid today, and the most obvious factor is the level of automation that those networks have—the level of automation that TaKaDu needs in order to be effective.  Our software uses raw data that needs to be measured—flow, pressure, quality, GIS system, etc.  The analysis of this data lets us present results and alerts to the user. We need meter infrastructure and telemetry equipment to get the data flow we need, and if you don’t have any of that in the City of LA, TaKaDu is blind.    

London, conversely, has thousands of meter-reading points, and Melbourne has hundreds. The contrast is that in LA you still don’t have any of those meters at all, and two-four years ago, we said, “Why should we bother to go to the US if there are so many other countries that are way more advanced in measuring their networks?” I must say that things are starting to change over here, and LA does have some coverage in some parts of the city. They’re starting, and they appreciate the power of data, collecting the numbers, and knowing what’s going into the network.  

What makes London or Melbourne a good fit for TaKaDu’s software?

Amir Peleg: Well, the two dimensions that make them a good fit are on the technical side. They have data, and they have some automation systems and software, which enables us to work. But the more important factor is that people have the drive to be better with reducing water loss, to detect each and every leak, to know about their inefficiencies, and to fix that. If you talk to the guys in Melbourne, they say, “Look, we have high expectations from our customers, and we preach to them about conserving water, so we must do whatever we can to conserve the same resource.” And that’s something that is made much easier when you adopt new technologies. You have a certain spirit like that among the managers of the utilities.

Give our readers insight into how TaKaDu has grown. Where do you operate? How has your software evolved?

Amir Peleg: I started the company after I sold my previous company to Microsoft, and I was a novice in the water sector. Really, like a normal person, I knew nothing. I’m not a water engineer. I slowly understood that there is a huge challenge and global opportunity—all the water utilities around the world have not really changed much about how they operate in the last fifty to a hundred years. More or less, it’s been the same thing even one hundred fifty years ago.    

When we started, we thought about solving a problem that is really global and that we could scale relatively fast. We came up with our software and with the idea of delivering it through the cloud, so that launching a new customer would take a couple of weeks and not months. And using a whole network of resellers and partners, we are active today with more than ten customers in three continents, in major cities like London, Melbourne, and Jerusalem. We’re now in several places in Portugal, and we just won our first big customer in Spain, in Bilbao. We’re really growing fast. We know that customers are happy because we haven’t lost any so far.    

The other thing is learning from our customers. We’re at this point where we can really bring in the same feedback we get from Melbourne, London, Jerusalem, and Cascais, Portugal. The fact that we are on the cloud helps us put that in the product cycle, and every two months we have a new version.    

Not being from the water sector, I knew I needed to get customers from day one. And when I recruited my first two employees back in February 2009, the first day of their employment we met at the airport and we flew to London for a meeting. So before we even had any office or computers, we took a flight to London to talk to the utility there and learn and assess what they had in terms of data, and how big the network is. I think that’s something that is a common thread in TaKaDu—we’ve been learning from the customers even before we had a single line of code.

And the how has the market for TaKaDu’s software changed in four years?

Amir Peleg: TaKaDu is really at the junction point of three interesting circles. One, a global and huge problem of water loss and scarcity that calls for a need to increase efficiency and save water. 

Two is this cloud-based software. It makes a very easy entry point into the utility, selling it in a model that reaquires operating expenditures and not capital expenditures, and everything is moving to the cloud—we are already there. And combining cloud-based service and water utilities is not rocket science anymore.    

The third component is strong IP, which relates to the technology. We have patents covering our technology because before us no one combined statistics and computer science with water networks. It used to be only about economic modeling and engineering, and in engineering it’s all about very accurate science—you have an equation and everything has to be one hundred percent accurate or else it fails. In statistics, nothing is accurate; everything is approximate. We use the data in order to understand approximately how the network functions, but these approximations are extremely valuable to the water distribution network operator. We are in the overlap between those three circles.

How do you charge your utility clients?

Amir Peleg: We charge them a monthly fee for our software because it’s a cloud-based service. Basically, they rent  the software for a certain period of time, and they pay a fee to use the software. The fee is proportional to the size of the city, or network. If you have a service contract like that, and customers can choose whether they want to renew or not, you must ensure that the customers will be addicted to the software and will see great value in the software so that they continuously renew the contract. So far, everybody who started and signed a contract has continued and even extended—so if there was a one-year contract, we got the contract for three years now.

You’ve had meetings today with the City of Santa Monica—a city of over 100,000—and you’ve had meetings this week with the City of LA—four million people and 72 hundred miles of pipes. What differentiates these two Metro Los Angeles opportunities?

Amir Peleg: It’s interesting—sometimes the smaller you get, the better you are and the quicker you move. But I was actually also impressed by the LA water department guys. To be fair, three years ago when I had a phone conversation with them, I said, “Well, there is nothing there.” Suddenly, this time around, they have data, they want to move forward, they have budgets to invest in water conservation. But you can also compliment the staff in Santa Monica. They are 10 percent of the size of LA, a very interesting team, very smart, and they can probably move a little faster. They have budgets and money, so it will be a much quicker turn around.

Amir, in addition to water distribution utilities there are also sanitation agencies in the US that have their own set of pipes. Does TaKaDu eventually plan to market to them?

Amir Peleg: Wastewater and sewage? No, we’re not there yet. You have to focus. There are 250 thousand water utilities out there. That’s the beauty of this business. You have water wherever you have people, and you need to deliver water to them, so you have the network and pipes. When they’re leaking and bursting, you need something to pick it up. On the sewage and wastewater side, there are also way less data points, measurements, and sensors.

Jacob Lipa, as the ‘Sherpa’ for Amir in Southern California, what, from your perspective, are the market opportunities appropriate for TaKaDu to explore?

Jacob Lipa: TaKaDu provides the opportunity to conserve water and eliminate unnecessary operational cost with a simple-to-operate and cost-effective software-based service. Due to environmental concerns, political issues, and cost of conveyance, delivering water to customers in Southern California from the California Delta, Owens Valley, the Colorado River, and local resources is becoming more and more expensive. TaKaDu’s product and global expertise provides an excellent tool for local water agencies to manage this scarce resource.  
    
One more question on that, Jacob—Psomas has been around for decades and has been the civil engineer of choice for many developers, planners utilities, and local jurisdictions. What’s unique about TaKaDu’s software and water management tools?

Jacob Lipa: TaKaDu is a rare combination of what I consider a simple technology to operate that is not expensive to install that lets water operators make timely, necessary decisions. The developers of the software are not just computer geeks. They have accumulated a lot of experience working with other large and small water agencies and developed a tool that is flexible enough that can provide as much or as little information as the operator needs to manage efficiently his water system. It is not a ‘nice to have’ tool. It is the only available tool that lets you see what is happening inside the water system; it analyses the situation and provides operational options.      

We have developed and used in other areas high-level technology to support the efficient use of existing infrastructure systems. One example is combining cameras at street intersections with technology to efficiently operate traffic signals. TaKaDu is carrying the same idea into our water infrastructure. It looks into the system and transforms what it sees into knowledge that is used to operate the water system in the most efficient way.   

Let’s wrap it up Amir by you sharing what you think, in two years’ time, the market will be for your software to the water distribution industry.

Amir Peleg: Let’s start globally. I think that in two years we’ll see that some countries equipped with TaKaDu or a competitor of TaKaDu’s—which isn’t out there yet, but I think in two years we will have competition. There will be some countries that will start to see a snowball effect where all utilities will ask for a solution like that, and it’s not going to be us pushing it to them. It will be a great sign for me that the industry is maturing.

In two years, we’ll start to see some regulators stepping in and saying, “We’re going to force you to measure things. We’re going to force you to know about the leak by using some automatic tools.” Whether its TaKaDu or IBM or something else, they will not allow a situation where no one knows about a problem until a citizen calls and says “I see water running in the street.”

We’ll probably have our first few US customers in two years, hopefully in Southern California.