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Front view of an adult male's computer screen showcasing the VAPAR solution

Pipeline to success: How Microsoft Azure elevated VAPAR from a promising Australian startup to a global player in asset management

Below billions of people’s feet worldwide, intricate networks of sewer and stormwater pipes form a hidden foundation of modern life. Maintaining this underground infrastructure is vital for human health and environmental protection – it has also long been a daunting task. Traditional methods rely on manual video-based reviews, making them slow, costly, labour-intensive and prone to human error.

Enter VAPAR, an Australian startup whose cloud-based platform uses AI to automate the detection of defects in sewer and stormwater pipes from video inspection footage, significantly improving accuracy and efficiency.

“Owners of underground sewer pipes often have a limited amount of money to spend, so they want to keep those pipes in service as long as they can,” says Amanda Siqueira, Chief Executive Officer and Co-founder of VAPAR.

“We run our AI on Microsoft Azure to find all the defects in their pipes and provide a root cause analysis. Then, we recommend what they should do about those defects so they can manage the decision-making through to a work order and track it to completion.”

The startup began operating in early 2018 and has built an impressive portfolio of clients. They include Greater Western Water, Blacktown City Council and Veolia in Australia, TRILITY in New Zealand, and Northumbrian Water and United Utilities in the United Kingdom (UK).

Since transitioning from Google Cloud Platform to Microsoft Azure in 2019, VAPAR has doubled its revenue and the amount of video its platform analyses every year. It has also secured A$7.5 million in funding through two investment rounds, fuelling global expansion and an increased headcount from three to 15 dedicated professionals.

Riding a wave of success in the UK

VAPAR’s expansion to the UK has proven to be a watershed for the company. According to Siqueira, the market’s unique landscape of private water utilities, ageing infrastructure and stringent regulations presented a ripe opportunity for the company’s pipe inspection software.

“Once we landed in the UK and got the lay of the land, we realised the market dynamics were very different to Australia’s,” she explains. “The UK’s water utilities operate within a privatised and competitive landscape, compared to Australia’s predominantly public utility system. There is also a lot of regulatory pressure in the UK to maintain high-service quality and environmental compliance.”

Siqueira says the UK’s infrastructure, characterised by its significantly older water and sewerage systems, also presents novel challenges. These systems often combine sewer and stormwater management into a single network, complicating maintenance and inspection processes.

VAPAR currently works with four of the 11 water utilities in the UK, with other partnerships on the horizon. United Utilities is one company that has benefitted significantly from VAPAR’s solution, reducing survey footage processing times by an impressive 80 per cent.

“VAPAR has truly transformed how we work,” says Katy Bevan, Operations Manager at United Utilities. “It provides us with a consistent method of defect coding that equates to a consistent decision-making process on investment.

It has also massively reduced timescales of both the time needed to review footage and the turnaround time from footage being recorded onsite to decisions about cleaning, and remedial activities being made. In addition, we are also benefiting from lower costs, and the generation of performance management tools to support our targets.

The Azure advantage

VAPAR’s strategic shift to Azure in 2019 represented a deeper alignment with the needs of its customers, most of whom are familiar with Microsoft’s cloud platform.

“For example, when we show our customers’ IT departments our [technology] architecture diagram, they know straightaway what all the components are and that we’ve got it set up securely,” says Michelle Aguilar, Chief Technology Officer and Co-founder of VAPAR.

Azure has also allowed VAPAR to scale its platform in ways it couldn’t before.

“We’ve transitioned to a more elastic architecture using Azure Functions, which means we can now handle surges in demand without batting an eye,” says Aguilar. This scalability ensures that VAPAR can quickly process large volumes of video data.

VAPAR has also leveraged Azure to upload and update its AI models, and to enhance its optical character recognition (OCR) capability.

“The OCR improvements have been a major leap forward,” says Aguilar. “They have enabled us to extract more accurate data from the videos so that our customers can make better informed decisions.”

The startup has even integrated a Microsoft-powered dashboard to track its carbon emissions from video processing. This innovation has drawn the attention of new investors interested in VAPAR’s environmental, social and governance performance.

Aguilar says Azure’s global infrastructure ensures VAPAR is well placed to expand into new markets. It will also allow the company to split its architecture across different regions to comply with data sovereignty laws.

“We want to supercharge (video) processing for certain customers so that they can have their own architecture on demand,” she says. “There are many opportunities to improve the delivery of our current offering.”

Close up of VAPAR solution on a desktop screen

Charting new territories

North America presents another frontier for VAPAR. With an expansive network of sewer and stormwater pipes, and a high inspection frequency, the opportunity is immense but not without its challenges.

“One of the biggest challenges in North America is the fragmentation of the market,” says Siqueira. “There are more than 30,000 utilities and systems in the US, so it’s a fundamentally different market to Australia or the UK but it’s one that needs our solution.”

VAPAR has begun with trial utilities projects in the US, allowing the company to gather market information ahead of its official launch in the region. The startup is also looking to leverage its partnership with strategic investor Autodesk to accelerate its growth.

“We’ve got a very complementary product to its water asset management software suite – so that’s a real opportunity for us to streamline our market entry using Autodesk’s channels,” says Siqueira.

A key milestone in VAPAR’s North American journey will be establishing a transactable offering on the Azure Marketplace, anticipated by mid-2024. This move is expected to streamline customer onboarding, leveraging Azure’s extensive reach to accelerate the company’s market penetration.

With Microsoft’s cloud technology at the core of its solution, VAPAR is set to redefine water asset management globally and mark an exciting chapter in its journey from local innovation to international success.