[00:00:00] Ebie Holst: Well welcome everybody who is joining us today for Cleveland Water Alliance's Innovator Spotlight. This is the last one of the season and we saved the best for last for Badger Meter and Badger Meter has our very special thanks because they've sponsored our entire season this year for our Innovator Spotlight series.
[00:00:39] They've been with us since March, when we covered really a whole year long of, of a focus on internet of things, IoT technologies and sort of technologies across the IoT lifecycle. And it's an appropriate. An appropriate thing, for us to dive in on that topic with them here today. So I wanna introduce myself, Eby Holst.
[00:01:05] I'm the director of Data and Innovation here at the Cleveland Water Alliance. And I'm just gonna flash through a little bit about Cleveland Water Alliance to kind of tee up why we're here. CWA is a water cluster. We're focused on helping to accelerate innovation on, big challenges all over the world.
[00:01:27] We're based here in the Great Lakes area and we connect, industry partners as well as utilities and research academia, and we actually see about 300 innovators every year. So they come to us from all over the world. We talk to them about all different kinds of solutions, whether they're physical technology intervention, they could be chemical or mechanical, but they could also be digital.
[00:01:54] And digital is a big area of specialization for CWA. We have a, a range of programming that we provide to support accelerating innovations to market. So one of those programs you'll see at the top, we call Open Innovation Challenges. This is, a program we use to really put a limelight on where there are market gaps, and we work with different stakeholders across the industry to say, you know, where do we, where have we not solved an issue yet?
[00:02:24] And let's really engage. innovators from around the world to try and respond to that. Then we also enable a range of different options around testing or trialing technologies. We provide different commercialization support and services, such as helping innovators to get their technology prototyped or to, you know, to get intellectual property support or whatever else they might need.
[00:02:50] And then we provide some end user engagement and market exposure through sometimes. forums, like, like the spotlight series, and then we can also connect innovators to manufacturing and, and distributor channels to help get their technologies into the market. One of the key programs of the Cleveland Water Alliance is actually our smart Lake Erie Watershed program, and in this program, CWA is actually built out almost 20,000 square kilometers of telecommunications coverage over our lake Erie basin for our international partners listening in.
[00:03:29] in the US it's about almost 8,000 square miles. We deploy hundreds of devices every year to monitor conditions on the lake. We've also expanded this into other watersheds as well. but importantly this whole infrastructure that we built out, really serves as a key sandbox for IoT technology.
[00:03:52] So we support. Testing and deployment of a whole range of technologies, whether they're sensors or telemetry, or they may actually be, AI predictive analytics, because we have a whole history of, a whole, bucket of, of historical data that we can provide for helping to train, different predictive analytics, as well.
[00:04:17] So with that background, and that infrastructure that we've built out, we actually have helped to create Lake Erie as the most digitally connected, large freshwater body in, on the planet. And that's really exciting for us because that not only means that we're on the cutting edge of some of the future technologies that we have yet to see.
[00:04:42] But it also has made us a destination for innovators in this space to come to our region and, and, you know, grow their business. So we're excited about, about that. And, and with that, we're also really excited to welcome Badger Meter to our discussion today. So let me introduce my panelists. first I wanna introduce Joe DeVito.
[00:05:06] Joe is the senior manager of Enterprise Solutions at Badger Meter. He brings over 30 years of utility experience and a background in public service to his work, connecting advanced water technologies with the evolving needs of communities. And this is Joe.
[00:05:26] Joe DeVito: Thank you.
[00:05:27] Ebie Holst: Thanks Joe for saying hello. And next I have Matt Stuyvenberg.
[00:05:32] He's Vice President of SaaS, which stands for Software as a service, and Global Commercial and International Utility at Badger Meter. Matt has spent nearly 20 years advancing the company's move beyond smart metering, toward integrated smart water solutions through innovative metering, telemetry, water quality, and software solutions.
[00:05:57] And there's Matt. Hello Matt.
[00:05:59] Matt Stuyvenberg: Thank you Ebie.
[00:06:00] Ebie Holst: So glad to have you both here. I really want to, kind of like warm up our audience here to getting to know Badger Meter. And, you know, one of the first questions I have for you is, you know, I know of Badger Meter as a metering company and metering has been a pretty big, exploding market over the last 5, 5, 5 to 10 years now, maybe, but you guys have really moved beyond metering, and I would just love to hear how, how that came about. What's, what's been going on with Badger meter that you're, you're well beyond the meter.
[00:06:40] Joe DeVito: I'm, I'm gonna let Matt handle a lot of this, but I, I do wanna start out a little bit from kind of a utility perspective, as somebody who has been involved with Badge Meter now for 38 years through my utility career and now as an employee of Badge Meter and, and one of the things I learned is Badge Meter is very purposeful in what they do and the way they move forward and their mission in solving and working with the water industry.
[00:07:06] And we're not just talking about drinking water here, we're talking about the entire water cycle. What really hit me is when you go all the way back and you figure out how did Badger Meter ever even come around? They were solving a problem. That's where Badger Meter came from. Meters were freezing and breaking.
[00:07:25] And the founders of Badger Meter said, we think we can do it better. And they did. And they've created a meter that has been around for over 120 years. It's evolved and it's changed. And then in the last 20 we've really started moving into the technology. And Matt's been such a big part of it. I've gotta let him take over from here and say how it happened.
[00:07:44] 'cause he was on the inside with those conversations where I was still wanting to buy their products.
[00:07:50] Ebie Holst: So I and I, you, I have some visuals for you, Matt. So let me pull that up here. Here we go. Yeah,
[00:07:56] Matt Stuyvenberg: appreciate you setting the table, for me, Joe. And, and a lot of it really does center around that, you know, tried and true class leading record, all positive displacement mechanical meter, of which the technology, while it certainly evolved over the years and what we put on top of it from electronics, has, has adapted quite a bit as well.
[00:08:14] You know, as we started to get into much more smart metering and we innovated around cellularly enabled cloud-hosted smart metering inclusive of introducing the first ultrasonic meter into the US market, you know, we recognized an ability, for billing metering to be so much more than a bill. and that's where those conversations that Joe talks about with the customer on what other problems are we seeing within your utility operations, within, you know, the, the challenges that you're seeing in your day to day.
[00:08:43] How can we help solve those through other adjacent solutions? And that's where it really became evident that we shouldn't stop at the bill. And, and that information, that 15 minute flow rate consumption data, empty pipe alarms, freeze alerts of that last piece of utility owned asset before the water enters the home or the commercial property can be used for things in conjunction upstream and downstream of that billing meter.
[00:09:09] That really led to, you know, the discussions around water quality, around high frequency pressure monitoring, around acoustic leak detection, and continuing to think on timescales that align with utility investments as well. You know, things don't move in a next quarter or next year pace, and we don't either.
[00:09:25] We're not looking at what's the next quick win. We're looking at how do we build long-term solutions that are going to solve big picture problems for utilities. Very much a partnership in moving forward with them. So, you know the title on this one of over 120 years of innovation, starting with, you know, creating a frostproof bottom on a, mechanical disc meter back in 1905.
[00:09:44] You know, we kicked off with innovation and we've continued that trend through ebbs and flows over that last 120 years and now really extending, you know, into many other solutions. And you'll see the logos across the bottom. You know, some of what we do through. Inorganic and M&A activity. but all of that backed up with then continued support and internal investment around the acquisitions to continue driving those technologies forward.
[00:10:08] Not as a separate company, but as part of the Badger Meter portfolio. As part of what we do day in, day out. Joe represents all of those products as part of a solution we bring to the customer, not someone else who's gonna have to go in and talk about. What we need to do from a pressure monitoring or from a water quality or from a collection system, aspect.
[00:10:28] So just brief background on, on who and how big and who Badger is. but we are headquartered in Milwaukee, Wisconsin. So that's where I am located, today at our corporate headquarters. Although I'm on the road probably more than 50% of the time, at one of the other nine manufacturing sites or five technology focused RD centers, we are approaching a billion in revenue.
[00:10:51] and a lot of that through the growth that we've seen in providing broader solutions and really, you know, we don't have it on, on this slide per se, but you know, the software aspect on how we pull it together. And so we talk a lot about the sensors, a lot about the, the meter or the, you know, di device of which we're gonna put in.
[00:11:09] But all of that isn't really all that useful unless I can make sense of the data that's coming back from it. So the sensors, the meters set, the foundation, but a big portion of our growth as well has been how we now make that actionable, make it simple to digest and give decision support to the end customer through the software layer.
[00:11:27] Ebie Holst: I love that actually. I really love that, Matt, how you kind of laid that out for us. So you know, some of those brands and as you described, Kind of building that foundation of the devices and then it becomes the story of how to make, make it actionable. I mean, it sounds a lot like, like AI is, gonna be maybe a part of, of, how Badger solves problems in the future.
[00:11:52] How much do you think that's, gonna play into your, the future of some of the, the technologies that you're providing?
[00:11:59] Matt Stuyvenberg: So, so let me jump in first, Joe, and then you can get to the practical aspect of it on the back.
[00:12:03] Joe DeVito: You got it bud.
[00:12:05] Matt Stuyvenberg: It absolutely will.
[00:12:06] Now also understanding that you need quality, robust data for AI to be useful.
[00:12:12] And so I think this is very much a let's walk before we run. Let's make sure we're solving real problems with AI and not just trying to find things to do with ai. So we have recently released, a. As we call it, our version of AI called Cobalt, within our beacon, smart metering platform. And that will also reside within any of our network monitoring, solutions which provide more of a natural language, interaction with the data which we're collecting.
[00:12:41] We've got millions and millions of devices calling in, which trillions of data points of which that's all well and good, but you can also drown by death, by data. So how do I get a more natural. Experience with my information to get the outcome I'm looking for, and in many ways have it presented in a timely manner so I don't even have to ask the system about it or go to a dashboard to look for it.
[00:13:02] So as we continue to progress more natural expressions and outcomes being surfaced directly while you're interfacing with the data, and we also have all of the natural language interactions so you can query data in a more, organic manner than having to be a full expert in the system at all times.
[00:13:19] Ebie Holst: Nice.
[00:13:20] Joe DeVito: Matt, it was a great way to describe the way we're doing it. Again, it goes back to my initial statement, so purposeful in the way we're doing it, you know, just to release AI. We're not just releasing, we're making sure that it's something that can be used by the utilities and, and looking at that, I mean, just our, we'll take our metering or our water quality data.
[00:13:36] This on the basic level, you're gonna get 96 points per day. If you want to evaluate that, then you have to go back to the old way of doing it or. Can we use AI to take a look and look for the patterns and bring that forward? the easiest one is obviously for a customer service rep who has to take that phone call and the customer says, my bill's high.
[00:13:57] Well, we've built in with cobalt. Now it can analyze that, their use pattern and say, Hey, there's a 50, 60% chance you've got a toilet leak. 'cause that's a recognizable pattern that if you don't look at multiple days of 15 minute data to try to find yourself. You're gonna spend time to do that? Well, we built that directly into the software to do that.
[00:14:18] That same thing holds true with water quality data and pressure data to try to identify for the utility and serve it up to them in a way that is easy for them to understand so they can take actionable items and make their system more efficient.
[00:14:34] Matt Stuyvenberg: And maybe just one more point on that, Joe. A big part of this comes back to, you know, what data have we been collecting for years that maybe didn't have an AI outcome already attached to it, but we knew that collecting it would be important for when we would.
[00:14:48] And so through our consumer engagement app, EyeOnWater, we collect. We notify the customer when they've got a leak and customer being the end homeowner. We then surface a a, survey to them asking what was the leak once they fixed it. So we now have labeled data. Combined with a profile of which we've collected in our system that we can anonymize and now use to help all of our customers, and what did that profile look like?
[00:15:13] So that we've got hundreds of thousands of labeled data points that then inform a tool really around actual intelligence, not necessarily artificial intelligence, actually informed intelligence to get to those outcomes that help someone solve when they've got an angry customer on the phone.
[00:15:30] Joe DeVito: I, I, I can elaborate a little bit.
[00:15:32] This past weekend, I happened to go away for the weekend with my wife. We went to a basketball game. It was wonderful time. we come home on, Sunday afternoon and around Sunday evening, around three o'clock in the afternoon. I personally got a text from my on water that said, your 24 hour flow rate has exceeded.
[00:15:48] It appears that you have approximately a six gallon per minute leak, a six gallon or hour leak. It notified me. Initially, thought it was gonna be a hose bit, went, walked into my hose, bit, then gave my one of my sons or something, washed the car, left it on. It wasn't, and as I walked around the back of my house, I found a puddle in my backyard, so I turned the water off for the night.
[00:16:07] Next day the sun came up, did a little digging, repaired it, got another notification within a couple of hours later saying Your leak has been repaired. Now I'm waiting for the survey so I can make another point of data to say exactly what that was. And it just, it worked exactly the way we've always described it and it worked for me this past weekend.
[00:16:26] Ebie Holst: I love that. I love that you're treating yourself as, as, one of your, one of your customers so you can really experience the, the technology firsthand and contribute to how the products evolve.
[00:16:39] Joe DeVito: So
[00:16:39] Ebie Holst: I have to.
[00:16:40] Joe DeVito: I got lucky. I live in a system that has Badger Meter and the Badger Meter project product.
[00:16:45] Ebie Holst: Nice. That's, that's, you're like the perfect testimonial, Joe. So I, I have to ask you, Matt, since you, you know, we, we kind of introduced you as being, the voice of, of Badger's many international markets. You know, AI is such sort of the hot topic here in the us. Is it, is it the same in non-US markets? What are you hearing in, in non-US markets?
[00:17:10] Matt Stuyvenberg: Yeah. It, it certainly is. I mean, it, it, it'd be. Burying your head in the sand is not the thing to do with what we've seen from the outcomes that can be generated here. so, all of the regions of which we operate internationally are looking at how can they leverage AI for better outcomes. certain areas may be going after bigger splashier, you know, full digital twin implementations and trying to extract, you know, from a different level, others being very targeted.
[00:17:37] And how can I use AI to help with my, you know, forced main or, you know, distribution system from all of the acoustic sensors or high frequency pressure sensors I've got deployed in my system, so it can really range from, I, I've got a targeted problem to solve. What have you developed in the, in the space to, I wanna throw.
[00:17:55] Everything at it. I want a full digital twin, and I'm going to, you know, expect certain outcomes from, from a big implementation, and, and that'll vary a little bit, region to region. But, AI is a trend everywhere, not just in the US and awesome. And trend. Trend I think isn't the right word either.
[00:18:13] I mean, it, it's here to stay and, and it's really, it will be part of our lives moving forward.
[00:18:19] Ebie Holst: I have to just say, not to put a spotlight on how old I actually am, but I do remember, people talking about the internet and just the, you know, some of the people that I worked with were like, oh, it's a flash in the pan, you know?
[00:18:34] but no, I think you're absolutely right. Of course, AI's gonna be here to stand and really penetrate so many, so many areas of our lives. But I have to also ask you just, Matt, since I've kind of got you on the hot seat right now, can you talk a little bit more broadly about non-US markets? What are some of the things that you see in different parts of the world and, and some of the, the issues that really matter and how they might, you know, vary or be similar to what we see in the US markets?
[00:19:07] Matt Stuyvenberg: Yeah, and I think maybe one of the important points of context for, for the audience as well is, you know, Badger Meter has historically been a US company, you know, and, and to date still the majority of our revenues are, are US based. But as we've gone through some of our strategic acquisitions, they've also been set up to help open up.
[00:19:23] Certain international markets for us. so I just wanna be completely open that we have a relatively minor portion of our business internationally, but it is an increasing portion of our strategic focus on expanding beyond the US. So we have a reasonable operation in the UK, of which the UK is certainly an interesting market dynamic unto itself, with.
[00:19:45] Privatization, with a regulator in the picture and with, you know, specific edicts put out on how, how you will spend your money at those water companies. and certainly a little bit of an embattled environment in the UK around the violations that have been there. So significant investment going into sewer monitoring.
[00:20:04] into Outfalls CSOs, SSOs reduction, pollution reduction. How do we mitigate, how do we ensure that water that's getting back out in the environment has been successfully treated? and then capital, reinvestment in general with a significant, amount of spending being allocated through Ofwat, over this AMP8 spending period, the likes of which had not been seen before.
[00:20:27] So certainly that, that dynamic unto itself, we're very interested in some of the ability to play both in water quality monitoring and in network monitoring for those companies. but really all across the EU, significant funding coming from the government to better protect water systems, to reinvest into treatment systems and networks.
[00:20:51] and then in the Middle East for us is another hotspot where we've seen significant investment interest out of the utilities, out of the governments in those areas. Around smart metering around district metering, full network analysis, full digital twins. How do I incorporate all of this with my SCADA information and a significant interest in investing in modernizing, particularly with so much of their water coming from desalination
[00:21:13] And the scarce resource of which they have with water. So, just a couple areas that, that particularly we operate and have, a good bit of insight into. But we operate in over 50 countries internationally. and certainly thinking about the international market as a homogenous market, as a mistake.
[00:21:32] Each region, each country operates a little differently with some different priorities. Has a different makeup of how water utilities, how government entities, municipalities are all structured. Are they consolidated? Is it privatized? Is it very spread out like the US market where we've got 50,000 plus water authorities?
[00:21:49] So really taking a targeted approach in understanding the customer pain point before we go in with a playbook that's been developed out of the US.
[00:21:58] Ebie Holst: That makes a lot of sense. So much nuance and and obviously we see a lot of variation depending on whether it's a water stressed region versus a water rich region or, or an area that's really hit with a lot of storm water and some of the dynamics that can change around that.
[00:22:16] Speaking of which, just talking about some of the products and technologies that Badger has been, has been focusing on, evolving to bring to the market, what are some of the, the products and technologies that you are most excited about in the water quality space specifically?
[00:22:39] Joe DeVito: Yeah, I think I'll, I'll start here Matt, and you can join in.
[00:22:42] I, you know, obviously online water quality monitoring. To me, you know, again, somebody who operated a distribution network that was over 700 square mile area. Two treatment facilities, two ASR facilities, you know, what is happening to that water over time, and what is the final quality that ends up in the customer's home.
[00:23:03] So the ability to monitor the water cycle from the point of source of supply, which we were surface. Facility, so from source of supply right into the treatment facility and then into the distribution network, and getting not a single point per day of what the water quality looks like, but truly getting 96 readings a day and seeing what's happening in the middle of the night when the water's moving slower.
[00:23:27] What's happening at 4:00 AM when every irrigation system in a neighborhood turns on. And being able to see that type of data and react for the customer to give them the best quality product that's available for the utility, that's the exciting portion to me. Then you start looking at adding and then overlaying pressure into it, and you start to see the correlation between.
[00:23:50] Flow, pressure and quality, they are entwined, completely entwined in. What happens when your flow increases, your pressure drops, you start scouring the walls, your water quality changes. As leaks start to develop, you could see a turbidity increase. I could get out there in front of those things. So it opens the market so much to the utilities to.
[00:24:14] I'll use the old phrase to stop using the canary, which was our customers, to call us and say there's something wrong, and us being able to tell the customers we're aware of a problem, we're working on that, and we'll have it solved before they even notice it or just as they're starting to notice it. And then out the back end into the collection side, which Matt talked a lot about in, in the international market.
[00:24:35] You know what's happening with the sewer, where's it going? Is there a way to prevent it from ever getting on the ground and entering a water body? And the reality is the answer is yes. Right now. Where in the past it was again, somebody had to see a manhole overflow, forget the call in now. Now we can monitor each and every one or monitor enough manholes.
[00:24:56] We can see what's happening. We can monitor the flow into the wastewater treatment plant so the wastewater operators can be ahead of some sort of disturbance that's coming their way, either through an industrial discharge or something that happened out in the system. So it is an exciting time.
[00:25:13] Matt knows. He's heard me say this in a lot of ways. I wouldn't mind being back in the utility world and getting to deploy these on a day-to-day basis and show the benefits of these. And, you know, luckily I'm in a place now that I can kind of talk to utilities and get them to do that and see what's happening.
[00:25:28] Matt, please add onto that.
[00:25:30] Matt Stuyvenberg: Yeah, so Joe led in with the inline online portion. Right. But to build on that a little bit, the portfolio we've built and continue to develop really inline online low power, reagent free technologies that enable low opex, low maintenance. Water quality monitoring often in locations that you wouldn't have otherwise or would've been impractical to do so that's a big piece of the calling card of the portfolio assembled.
[00:25:55] And to me, I like to think about it in, you know, outcomes for the customer, not necessarily what the products are, but if you look at even starting all the way on the left, with reservoir or, or intake, you know, monitoring. A customer who was struggling with runoff from some of their, from some of their farm fields, creating, you know, high nitrates in the water, of which they didn't ever have an insight into when that was gonna hit their facility.
[00:26:19] By deploying three stations, 7, 14, 21 miles upstream, they now got a heads up to the point that they could prepare their population for when, because their treatment plant wasn't set up to pull out nitrates. They now had a heads up for when that was going to occur. They were able to notify their population.
[00:26:35] They were able to prepare for that coming in. To then work with, you know, farmers and everything else in preventative manners as well, but measuring first to get to an actionable control and then eventually build a case for it, in improvement to their wastewater treatment plant to be able to take the nitrate level out.
[00:26:53] But look in the distribution and treatment area, treatment first, you know, just switching from a reagent based chlorine monitoring in your water treatment. We have a large customer who saved $300,000 a year by switching away from chemical based high opex solutions to our electrochemistry, amperometric based, you know, chlorine monitoring.
[00:27:14] It's a significant real savings for that utility that resulted in higher up time and lower cost for their operations. Moving into the distribution portion of that, leveraging items like the pipe scan and the metronet, giving real time insights into what's going on. Let's say at a reservoir for the pipe scan where I'm installed now, maybe a 36 inch pipe.
[00:27:34] And I might have had a significant amount of bypass instrumentation on the wall to do the online monitoring before, by using a pipe scan, which doesn't have any bypass stream, that draws a sample from the pipe, runs it through a set of sensors, reinjects it into the stream. Full NSF approved. Basically lab on pipe.
[00:27:53] That customer is saving over a hundred thousand gallons of water for every installation. They switch out their bypass analyzers for a pipe scan. And so as we start talking about water conservation, why run my clean water back down a drain just to have the monitoring when I can have a device which is gonna save that water, and then shifting all the way to the right.
[00:28:12] Really now into that collection system, when I start looking at the upsets that can happen in my wastewater treatment plant, leveraging a product like the spectralizor or the G series, to go into lift stations or the influence of my treatment plant to give me a heads up before that upsets gonna happen to that wastewater treatment plant.
[00:28:31] So I can maintain my uptime, I can maintain my compliance, and I can even deploy it on the backend for final effluent, to make sure that I'm maintaining all of my controls around BOD. So. Any number of applications for really that additional level of insight to create real change for how a utility is gonna manage their operations.
[00:28:50] And then shifting a little bit out of just core traditional water quality sensors. Joe touched on it, but the other devices in the network are water quality also. You know, this is what really excites me, as I started with, you know, 15 minute data from the billing meter. Some of those devices are back hauling pressure, you know, temperature, empty pipe alarms.
[00:29:10] If that's all operational data, if I'm just using it for a bill and throwing that away, I can pair that up with other portions, DMA out in the network. If I know how the flow is moving, that's water age. If I've got temperature temperature's, a big water quality contributor, if I pair that up with a couple simple water quality parameters from the network, I now have a very holistic picture of exactly what's going on.
[00:29:34] I can find out when I've got valves that were shutting correctly. If my GIS was wrong, that network isn't operating the way I thought it was, and I can ensure water quality. I can ensure my, ensure my compliance, and deliver a better quality, more wholesome product to the end customer.
[00:29:48] Joe DeVito: Yeah. And, Matt, I'm glad you brought up temperature 'cause it was the one I wanted to also highlight.
[00:29:53] It's such a, it's a parameter that's there and we offer it. And if, if you start pairing that temperature with the chlorine, like Matt talked about and look at a year's cycle, you can then really start adjusting your chemical, dosage you off of water temperature. Because we all know that temperature affects our chlorine residuals and our disinfection residuals.
[00:30:11] But now I've got true data that says, Hey, I can lower it and I can and know when to raise it. Because it is one of the most costly things they have to deal with. So that's how we're bringing all this data together and make it useful for the utility
[00:30:24] Matt Stuyvenberg: and, and even a real world anecdote. We've got a full water quality monitoring station at the inlet to our corporate headquarters here in Milwaukee.
[00:30:31] It's on an eight inch line, and we had last summer, we had a one of the transmission, our distribution mains burst out in front of our office. So I believe it was a 12 inch line, water shooting up through the road, broke the road surface. Road had to be shut down. Embarrassing situation for all involved.
[00:30:50] Three hours before that water broke ground. We saw on our water quality monitoring station, a spike in turbidity, a rise in organics, and a decrease in pressure coming into our facility. All indicators, even though it's a water quality monitoring station, all indicators of something occurring within the distribution network that was related to pressure or integrity of the pipes, not necessarily related to traditional water quality.
[00:31:14] If that had been enabled to the utility, if that had been put in conjunction with some of the devices we just talked about. That utility director could have mitigated that before it ever broke, broke the road surface before we ever had to shut down the road and been proactive maintenance instead of reactive.
[00:31:29] So it's, it's the exciting part of the future world of which all of these sensors live together in a manner to, to be a little bit more proactive than reactive.
[00:31:38] Ebie Holst: Matt, I just love that particular example that you gave about broken water mains. We absolutely hear about water mains, breaking water mains and, and whoever can come up with solutions to help predict that is, is, gonna have a friend and utilities certainly across areas that have colder climates.
[00:31:58] Can you, can the two of you talk a little bit about how you do innovate new products? I mean, this is. This is quite the array of, of different solutions that you've walked us through here. I mean, can you talk a little bit about, you know, some of that internal process? How do you identify gaps where you wanna focus your innovation?
[00:32:17] How do you, how do you actually go about sort of evolving your product offerings to get them out to market?
[00:32:25] Joe DeVito: I think I'm gonna start here, Matt, with saying how do we find out what the utilities are interested about and that we spend a lot of time with our clients and the utility world. We ask them questions.
[00:32:35] What are, what's going on? What's your pain points? What do you see? What do you need to do this better? That's something that the team that I happen to be part of, we spend a lot of time with, we also spend a lot of time with the consultants and the engineers. What are you battling? What's going on? We take that data and we move it up the chain and it ends up on Matt's desk.
[00:32:59] And in a lot of ways, that's where it ends up going in that way. And we kind of give them the feel of where we, where the industry, and especially our direct customers are, are asking for stuff. And then Matt, I'll tell you the next step, I'll let you talk about the next steps and how we go forward from there.
[00:33:17] Matt Stuyvenberg: Yeah, no, Joe nailed it. And, his team's great. Right? And, and it's not just, you know, what's in an RFP or you know, what's directly asked for. Sometimes it's the in between, right? Because these. Where true innovation happens is at the cross section of, of, of a need and an open mind. Right? And that's where Joe and his team are so open about discussing not just what is said, but okay, let's go another layer deeper what ask a few why's, right?
[00:33:42] The, the, the five why's here and get down to what we're really trying to do and how can we go about doing that in a manner of which is hopefully adjacent to what we already have, so that we can build it out in an organic roadmap. Or if it's not that we look for an acquisition to accelerate it for us and then bring it to that customer base.
[00:33:59] So our core is always gonna be internal development, and we maintain five year, you know, strategic roadmaps. We just got through our five year strategic planning cycle of which we refresh every year. And I'll say it's a five year plan, but really it's with a 20 year kind of lens to, to where is the industry going?
[00:34:17] What are the macro drivers? How do we support this longer term than five years? and then M&A has been, obviously we're part of here, part of this call is about our M&A history, but has been an enabler for it as well. When we don't have the background or expertise to do it ourselves, how do we grow our company to be that expert?
[00:34:36] And so, you know, water quality was one where we said it would be foolish for us to try to do this completely organically. There are innovative companies out there who have built a good product and are ready for that next level to scale. and that's where, you know, we maintain relationships with hundreds of companies from early, early stage startups to, you know.
[00:34:55] Full scale enterprise partners, competitors of ours, and everything in between, to figure out what's gonna make sense when we're ready for, for the next, the next solution. So, innovation is not a one-stop shop. There's plenty of ways in which it comes up. We do have a layer in between Joe and I.
[00:35:13] of which product management and market management as well, who are, you know, a little bit more in constant communication with the sales team, some of the other customers as well. but also the fact that at any time Joe and I will, you know, have full on sessions on does this actually work, what could we do?
[00:35:29] Is this, is, is this something that'll panel for our customers and for us. So really having that access all the way through the organization to, to get to value, for the customer and for us.
[00:35:40] Joe DeVito: And what's, what's been when I was back working and, you know, Badger Meter would show me products or show me new things that were coming out.
[00:35:48] It was always so amazing to me how much they listened to me. I can remember going back all the way to the first ultrasonic meter. I was lucky enough to be a beta tester. The inch and a half and two inch was one, one of our early commercial size lines that we brought out. And there were a couple of little things that I was like, wow, this could be better.
[00:36:04] And I brought it. Then, when the final version came out, those were there. They listened to the customers and that information ended up in the final product. The other thing is the way we do our acquisitions and the way we do this stuff. It's all Badger Meter. It's, it's, these are Badger Meter people. These are Badger Meter employees.
[00:36:22] after the mergers and after the acquisitions, we're all one team working on a single goal. And to keep that culture going for the 120 years that it's been going, it's just an amazing way to have of what the company to work with.
[00:36:36] Ebie Holst: I love that. Well, you know, I, I do wanna dive into that just a little bit more because, you know, as I mentioned, CWA, works with.
[00:36:45] Innovators from all over the world, and these are potential innovators around solutions that could be of interest to a company like Badger Meter. So how do you work with, with innovators? Do you, you know, do you focus on, you certainly mentioned the M&A landscape, Matt. I mean, is there. Does Badger ever invest in early stage companies before kind of going into a full M&A discussion, or do you look at licensing technologies?
[00:37:14] And I do wanna, I wanna just, put a little bit of parameter around, your answer. 'cause I know we, we also have a couple more questions to get through, and then we've got some Q&A coming in from our audience. So give us, give us a snapshot if you would.
[00:37:30] Matt Stuyvenberg: So, so the, the short answer is that our preference is M&A.
[00:37:33] we do invest, we have invested, I would say we've done that with limited success. We do certainly work with organizations like CWA or the Water Council, here in Milwaukee. And we do a number of tech scouting, tech challenge kind of activities as well, of which we support both through our time.
[00:37:51] And then potentially on the backend. and we have IUCRC relationships, industry, university research collaborations, both domestically and internationally. but I think the big thing here is ensuring value for both potential acquirer or investee and invest or, acquirer. And I've seen any number of data rooms littered with the false promises of a partnership agreement that was going to open up access from the larger organization to a fledgling company that was going to enable X amount of sales growth. That just doesn't happen. And so it's gotta be a meaningful investment to the organization. And Joe's seen it from the Badger side. It's hard enough incorporating and integrating a new company nonetheless, if it's not really part of the company.
[00:38:40] And so we've taken an approach of, if we're gonna do this, we're going to be fully sold on the company, on the people, on the technology. We're going to integrate it, we're gonna incorporate the people and we're gonna go in together. And so I think that's the most meaningful way to both support our end customers and be fair to both acquiree and acquirer and get the most meaningful outcome.
[00:39:04] So that, that really is our strategy first. We're certainly open to other discussions, but we will be M&A first.
[00:39:13] Ebie Holst: That makes sense, Matt. So thanks for, thanks for clarifying some of that. and it sounds like you really take a true partnership kind of frame of mind when you're looking at those opportunities.
[00:39:24] Can you talk a little bit about where you see the growth areas may be over the next five years and therefore potentially what you're on the prowl for? I mean, are there specific sort of solutions that you're, that you're interested in, from some of those innovators out there?
[00:39:43] Matt Stuyvenberg: Yeah. And, and there's always the, you know, the core focus areas and then the ones that might catch us outta right field that we have to open our mind to.
[00:39:51] So it's not that we'll ever be shut out from, but we're very good at getting to a quick yes or a quick no. So it's not, it's not useful to waste either side's time, but. We're still interested in building out sets of sensors for remote monitoring, and additional investments into water treatment technologies.
[00:40:08] And for us that's still more around water monitoring within treatment, not as much around active treatment technologies, international expansion and regional, you know, door openers for us. So someone has a foothold in a certain market that is of interest to us. We are also open, not necessarily in technology, Acquisition, but more how can we gain some market access in areas of which we'd love to bring our Blue Edge suite of solutions to that, to that region. so it sensors IoT. Software, and it might not be holistic software platforms, it might be components of, to help accelerate some of the analytics that I talked about.
[00:40:47] as we've now built a very robust product and revenue stream attached to our software as a service solution, we're more open now to, is there a component of which, you know, might play into, into what we're doing? So it's fairly broad ranging, and not thus the couple hundred companies of which I, I keep in contact with.
[00:41:08] But happy to entertain a discussion from any of the audience as well.
[00:41:14] Ebie Holst: Wonderful. Well, before I kick off, some of our audience questions, I do wanna ask one last one, which is, can you talk a little bit about where, where are the gaps still in the market? What, what still needs to be solved out there in, in your view?
[00:41:31] Joe DeVito: I, I wanna start a little bit here because it's interesting. I think the number one gap that I, we work on all the time and that I see is the fact that the industry, the utility industry, still treats the meter as a cash register. Having them understand that moving into AMI is much more than gaining a reading.
[00:41:53] You have to look at this in the way we've talked during this last, whatever, 30 some odd minutes. It's a holistic approach at deploying technology that allows you to have an insight into what's going on, into, whether it's your distribution collection network, if it's your source water supply, or your effluent disposal, any of those portions, it's.
[00:42:15] It's now getting, which, you know, I'm, I'm part of, I'm 30 years in, in the industry. We have to open our minds and, Matt said it in, when we're thinking about what comes outta right field that we might be interested in, we've gotta work with the utilities to understand it is a much bigger picture.
[00:42:30] I mean, it's a very large investment. It's a one time investment to go to AMI. They don't, they do that once every 15 years. So, you know, and initially now where we are now and where we've been for the last seven to 10 years, it is the. Financial meter group that's moving that next step. 'cause they have to place the meters.
[00:42:49] How do you bring in all of the rest of them to understand that this is a full partnership to understanding the network? So that's one of the things I think just on an overall understanding of where the systems need to go. And Matt, if you want to add anything to that, please, on the technical side.
[00:43:07] Matt Stuyvenberg: Yeah, and to me, a couple big, we'd be remiss if we didn't mention emerging contaminants and PFAS and, and I'll, I'll say it's a general industry problem. It's not something which Badger has a solution for. So this is not a pitch, and it's one of which I've been purposely avoiding because I think there will be billions of dollars spent on trying to find the right solution and a lot of carcasses along the road.
[00:43:26] So I certainly wish everyone the best and I hope we have a positive outcome from some innovator along the way of which has the silver bullet for it. but that's a big problem for the industry. What we're gonna do around microplastics, PFASes, and other emerging contaminants. I think data and system level thinking and, and how do we look beyond the use case of which we've collected information for, is one of which I, I think a more organic discussion with some solution providers on how can I leverage this information from trusted advisors?
[00:43:55] From trusted partners that you can grow with as an organization become very important. And I'm sure I'm missing any, oh, sewer, sewer monitoring. I, I just think about what we've instrumented on the collection, on the distribution side of the network. And even though I think we're still under penetrated there in general as an industry, we're way further ahead.
[00:44:15] Right. Network monitoring's been out there, you know, whether it's acoustic leak monitoring or pressure monitoring or, or DMAs has been out there for a long time. I think about how under instrumented we are in the collection system. Yet the very real issues that causes from either a, you know, cleaning or overflows or upsets of treatment plants that cause, you know, problems in the environment.
[00:44:36] getting to a point of which we have a better picture to what is in our collection network so we can be smarter on that side as well. And bringing AMI to the sewer network instead of just being on the, you know, distribution or use.
[00:44:48] Ebie Holst: That's really great. Thank you for, for pulling out some of those like, key issues that certainly have been in the news as well as on the minds of, of many of the stakeholders across the industry.
[00:45:00] Let me jump to some of our audience questions here. so How can larger companies support innovative solutions without the fear that larger firms may then develop their own version of those solutions? So I know, Matt, you talked a little bit about, you know, your primary channel here of, of working with innovators more than likely is gonna end up in sort of the M&A discussion.
[00:45:26] But in those sort of early. Get to know each other discussions between a company like Badger and, and the innovators, you know, you know, being the little guy is, is tough to be in the room with a big guy like you guys. So how do you help to mitigate some of those, that sense of risk and, and show kind of, you know, respect for, for the IP of an innovator if they were to enter into a conversation like that?
[00:45:54] Matt Stuyvenberg: It's, it's an answer which won't be easy, but it is trust and track record, right? Yeah. And, and so our calling card, it is our, our, our future is based on how we've interacted in the past. And if you look at our track record. We've not ever acquired a technology and put it on the shelf. We've never talked with a company and developed that technology then ourself.
[00:46:18] Working around ip, we operate with integrity and with trust. This industry is based on trust and if and if you can't find someone that you get a good feeling about and the way that they've operated before, I quite frankly wouldn't have a discussion with that company and, and I realize that that is not an easy thing to assess.
[00:46:37] but we also, anytime we're having any of the discussions around technology licensure or, you know, partnerships or acquisition, we make available any of the principles from the companies of which we've acquired because the vast majority of the principles are still part of Badger Meter today. and that's also something which is not traditional in the space.
[00:46:57] so I, it's, it's not, it's not a direct answer. you can protect yourself as well as you can with NDAs, but find someone that has an appropriate track record before you go in and just expose everything.
[00:47:12] Ebie Holst: I really love how you brought up the point about making other former principles of companies that you have acquired available.
[00:47:21] I think that's really powerful. I'm sorry, Joe, I think you were about to say
[00:47:23] Joe DeVito: something. No, that's okay, because that was a little bit of what I was gonna highlight. Matt mentioned the principles, but I would take it a level down because I have the, I have the pleasure to work with, you know, day-to-day employees that worked at these other companies and now we're working side by side.
[00:47:36] So it's not only the principles, it's, it's let talk to the day-to-day employees and they're, they're thriving now here at Badger and they're seeing what can come from, you know, being part of a bigger group and a and the way that we move forward. And I think Matt highlighted very, highlighted very well.
[00:47:52] Ebie Holst: Beautiful. Okay. I'm gonna jump to our next question here. you mentioned the correlation between flow, pressure and quality being completely entwined. How do you see AI or advanced analytics helping utilities detect anomalies faster before they impact customers?
[00:48:12] Joe DeVito: Yeah, it, it is very similar to what we talked about with the, with the flow patterns we see in water and then you start overlaying the pressure and the temperature and obviously how quickly AI can analyze a larger set of data and see what is the norm, what's starting to change, and.
[00:48:30] You know, kind of bringing that forward and, and handing that to you and serving you up to say there is an anomaly occurring. And here's what we're seeing. Matt, I know you're a little bit more involved in the software side, so I'll let you add to that statement.
[00:48:42] Matt Stuyvenberg: Yeah. And, and I think this comes back to again, are we, are we throwing around AI for the sake of AI or is there, you know, something as simple as if all of that data is coming together?
[00:48:53] Some of those can be simple thresholding or equation based alerts and alarms that aren't even AI, right? So, so I, I think sometimes we jump to this end state of, I need. Some big, you know, mystery in the cloud to solve this for me. But as soon as I bring all that data together into one panel and set a simple equation of if, if this, then that I can have a, an alarm generated with, with pretty simple math about what's going on now, I think the practical reality challenge goes a little beyond that and that there's a timeliness of when certain things may call in.
[00:49:26] Into a centralized, so where can we push things to the edge and where do we have things in a centralized, centralized area to solve those problems? But, the short answer is yes. The longer answer is with caveats that I, I don't know if we have to jump all the way to AI to do it, and just by having it come into a central repository, we can solve some of these things without having to throw a big AI engine at it.
[00:49:49] Ebie Holst: Great. Okay. Next question. Regarding the digital twin and data cleansing, areas that have been brought up here so far on our, on our talk together, what is the worldwide trend in embracing 3D GIS as a backbone for solutions?
[00:50:08] It's a pretty technic question, so
[00:50:10] Joe DeVito: I'm gonna,
[00:50:11] Ebie Holst: I'm where to put that too.
[00:50:12] Joe DeVito: I'm gonna start, I'm gonna start a little bit here, and I'm gonna go back, I'm gonna go back about eight years or nine years. Okay. One of my other things that I did is I was, I happened to have the privilege to serve on an 811 board.
[00:50:23] Everybody knows that's, you know, your damage prevention call before you dig type of boards. I did that for 18 years, president for 9. And this was a conversation we constantly talked about, when can we get GIS to a 3D scenario so that it could be utilized in, in protecting the infrastructure. And every time you're protecting the infrastructure, you're protecting the water quality.
[00:50:46] I think the biggest problem with moving in that direction, and, and I hate to lead with the problem, is so much of the US infrastructure is so old and to bring that data up to today's standards, to do that type of stuff. It's gonna be interesting to see if that happens. I hope I'm around long enough to see it.
[00:51:06] Matt, you may be involved in this a little bit and be able to add to it.
[00:51:09] Matt Stuyvenberg: Yeah, I, so in general, obviously GIS is, is the engine of which all of these assets are gonna be mapped upon, whether or not it's 3D GIS or anything else? I mean, we've seen any number of issues going back to data cleansing tied to even just having clean GIS to be able clean 2D, you know, are pipes connected.
[00:51:26] Do I have a clean network? Right? That not to again go to a problem, but how we get nice, clean information of which to even overlay some of these analytics on have been a problem depending on how well maintained GIS files are. So yes, it, it is the key of which we'll unlock a lot of this value.
[00:51:48] but until we have a true distributed amount of sensors feeding into it, until we have clean GIS we will be struggling to unlock the rest of that value. Yeah,
[00:51:58] Ebie Holst: that makes sense. Well, and having just, increasing the volume of sensors out there, of course has, there's other issues too that need to be addressed, like power and maintenance, so forth.
[00:52:11] So we'll see how things unfold. next question: with the cold winters in Wisconsin and Michigan, and of course, Anywhere along the Great Lakes where, where we are, what kind of temperatures can the meters withstand? How cold, how cold can they handle those temperatures?
[00:52:32] Matt Stuyvenberg: So, so I'll, I'll give the general answer of when we do environmental testing, we go down to negative 40 degrees, and that's to make sure the electronics and other things can handle it.
[00:52:39] But obviously there's a practical reality of if I'm that cold, I've got different problems when the meter's installed. So we always say it goes down to just a few degrees above freezing, because if you have freezing issues, now you've got other issues in the rest of your network. So obviously the locations of which these are installed.
[00:52:56] Our area are typically in basements or deeper vaults, of which we aren't seeing those temperatures at where the meter is installed. so we're, we're somewhat insulated from the extreme cold of which we will, we will end up getting here.
[00:53:09] Ebie Holst: For Matt. When considering M&A, what is the sweet spot for Badger on SaaS?
[00:53:20] Software as a service, as it applies to new technology? Should SaaS already be a mature offering, or would the ability to add this value stream be more attractive with respect to uplift?
[00:53:33] Matt Stuyvenberg: So at this point, I would say it's more attractive to add in than to be fully self-sustaining. So there are obviously challenges depending on how big the SaaS platform is now, integrating the technology and having, you know, platforms of which we aren't looking to operate separate panes of glass.
[00:53:51] Our strategy is really around. One pane of glass, one, one general user experience for the operations team. Maybe another focused on metering. But if it's, if it's too fully developed, depending on what the application is and overlapping with what we currently have, it creates an integration challenge.
[00:54:09] so right now I'd say we're, we're more focused on. You know, components of or expansion of our technology, whether that's into more hydraulic modeling or digital twin type capabilities. We could talk into some of the sensor platforms and screens of which we already have, additional time series, data analysis tools, you know, so any number of areas around it.
[00:54:27] But, I would say historically we've said no acquisition, too small. And we've also grown on the upside of what we're open to as our, as our business has continued to evolve. So, we've got a fairly open mindset on how big or how small and what value it's going to add to, to both the acquiree and the acquirer.
[00:54:49] Ebie Holst: All right, well, we have just a couple of minutes left. I don't know if there are any other audience questions. Doesn't look like it. You've got another minute maybe to throw in a question here, but in the meantime, tell me, each of you give us a couple of sentences about what you see for the future of the industry.
[00:55:13] You know, we're, we're facing more water stress than we've ever seen before. We are certainly are seeing utilities that are often struggling with how, you know. Obviously it varies by different location, but how they're going to be able to continue evolving with more stress on their own budgets as well.
[00:55:36] Can you speak to what you're seeing for the future and how, altogether we're gonna navigate through some of those issues?
[00:55:45] Joe DeVito: Matt, I'll let you close. So I'll start here. What I see for the future is really. Giving the employees of the utilities, the data they need readily available in their hands to do their job more efficiently.
[00:56:00] it's something that has been missing. I mean, you can highlight SCADAs SCADA has been around for, for 25, 30 years and even more in some fashions. But SCADA is so. The security around SCADA being, there's only a few people that can see it and there's so much great data in here. And Matt kind of highlighted more about monitoring is what we're doing and giving that data, monitoring data only without control to those field staff, the customer service, the engineering, everybody, and allowing them to be able to react quicker, work more efficiently, and not having to just.
[00:56:35] Hire FTEs to get out there and do stuff because we're not a hundred percent certain of what we need to be doing. But being so purposeful in the way that you're running your day to day. And that has to do with all these different pieces of data coming together in that single pane of glass and knowing exactly what you need to do.
[00:56:54] So to me, it's that. The other piece of that is. Getting the regulators to come up to speed with the, with the online instruments. They are, they are behind, in my opinion, I mean this even, even in meter testings that, you know, we've gone from mechanical meters to electronic meters, yet some states still require that you test the meter every year when we know that they're, you know, guaranteed for 20 year accuracy.
[00:57:21] In some, in some instances, those types of regulations have to start saying. They need to be loosened up. They need to be easier to deploy these online sensors in the system to be utilized. 'cause that is a difference between North America and, and the international market. They can deploy them much easier and they can utilize 'em much easier than you can in the states.
[00:57:40] Matt, please add onto that.
[00:57:41] Matt Stuyvenberg: Yeah, and I, I think it's both a challenge and an opportunity. But for a long time, the industry's been underinvested in and taken for granted in that clean water just comes outta my tap. And I think the awareness of which the general population has the ability to connect them more organically with their water usage and some of the concerns of which might be around it, and some of the swings in at least some local areas.
[00:58:05] Moving on regulatory funding to enable greater investment. Will drive an increased interest in the water industry. Combine that with the tech, which now should attract a younger generation to get re into the water space. So something of which we've been struggling with from the aging demographics, in a space of which is purpose and mission driven.
[00:58:26] Right. And, and, and I know that, that that is very important as we look at the younger generations coming through. What better purpose or mission than clean water, wholesome water, delivering it, treating it. Cleaning it, putting it back out in the environment. So I, I take a very optimistic view at this nexus of technology funding awareness on where the water industry will be in 30 years, and really a replenishment of the systems that have been underfunded, an aging demographic that's been incredibly dedicated, but aging out and, and you know, how we replace that workforce with one that's tech forward and one that understands some of the efficiencies we can gain from, the centralization that Joe talked about as well.
[00:59:06] Ebie Holst: So Matt, thank you so much for joining us today. You guys are rock stars and we're very grateful for our partnership with Badger Meter and to all of you who joined us today, thank you so much for being a part of, of our journey together and our spotlight series. And, on behalf of everyone here at Cleveland Water Alliance, we wish all of you a beautiful, joyful holiday season ahead, and we'll see you next year.
[00:59:35] Matt Stuyvenberg: Thank you all very much.
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