For years, success in the water sector was relatively straightforward. A vendor could build expertise around a single challenge, establish credibility, and grow alongside that market.
- Treatment providers focused on contaminants.
- Infrastructure companies focused on pipes and assets.
- Software firms focused on reporting.
- Consultants focused on planning.
The assumption behind all of those strategies was the same: utilities buy solutions to individual problems.
The assumption that utility buying is the only solution in the utility field is very dangerous.
Today, utilities are navigating a regulatory environment where PFAS, Lead service line replacement, Cybersecurity requirements, Climate resilience planning, Water reuse initiatives, workforce shortages, Aging infrastructure and funding constraints are all arriving at the same time.
A community water system serving more than 3,300 people is now required to complete a cybersecurity risk and resilience assessment on a five-year recurring cycle on top of PFAS monitoring deadlines and a 10-year lead service line replacement mandate running at the same time.
That threshold isn’t a small carve-out. Small systems serving fewer than 10,000 people make up more than 92% of the nation’s roughly 51,000 community water systems meaning even a relatively modest population cutoff like 3,300 pulls thousands of small and mid-sized utilities directly into federal cybersecurity compliance for the first time.
The regulations may be separate on paper, but they collide inside the same utility organization.
- The same engineering team is responsible for multiple compliance programs.
- The same leadership team must justify competing capital investments.
- The same budget is expected to support treatment upgrades, infrastructure replacement, cybersecurity improvements, resilience planning, and operational modernization.
Utilities are not experiencing a series of independent regulatory requirements. They are experiencing one large resource allocation problem. That distinction matters because it is quietly changing how purchasing decisions are made across the industry.
The workforce problem compounds all of this. Roughly a third of the water sector’s workforce is eligible to retire within the next decade, and the Bureau of Labor Statistics projects an estimated 10,000 water and wastewater operator positions will need to be filled every year through 2034. The same shrinking teams juggling PFAS, cybersecurity, and lead line mandates are also losing their most experienced people at the fastest rate in the sector’s history.
For vendors, this creates both a challenge and an opportunity.
The challenge is obvious. Point solutions are becoming harder to justify when utilities are juggling multiple regulatory obligations simultaneously.
The opportunity is subtle but powerful: utilities are increasingly looking for partners who can solve multiple challenges at once, giving those vendors an advantage over companies focused on just one issue
Climate Resilience Is Becoming a Funding Requirement
Five years ago, resilience planning was often considered a forward-looking initiative pursued by utilities with sufficient budget and leadership support. Today, resilience considerations are becoming embedded in funding mechanisms, planning requirements, and infrastructure discussions across the sector.
The scale of that shift shows up clearly in the numbers. Between 1980 and 2024, the U.S. sustained 403 weather and climate disasters that each caused at least $1 billion in damage. What’s changed isn’t just the cost, it’s the pace. In the 1980s, these disasters struck roughly 82 days apart on average. Over the last decade, that gap has closed to just 19 days.
Utilities used to plan around climate risk as a long-term, occasional consideration. At less than three weeks between major events, it’s become a standing operational condition, and funding agencies are increasingly building that reality directly into how projects get approved.
This is not simply a policy evolution. It changes how projects are evaluated.
Utilities are no longer asking whether climate risks exist. Most have already accepted that reality. The more pressing question is how to translate broad climate threats into operational decisions that can be justified to boards, regulators, and ratepayers.
The 2022 Jackson, Mississippi water crisis demonstrated how infrastructure resilience, operational readiness, funding constraints, and climate-related pressures can collide simultaneously. Roughly 150,000 residents lost access to safe water, and the boil-water advisory stayed in effect for seven weeks, from late August until September 15, 2022.
What began as a treatment and infrastructure challenge quickly became a public health and regulatory crisis, illustrating why utilities are increasingly being forced to think about resilience as an operational necessity rather than a long-term planning exercise.
This is where many vendors still miss the market.
The opportunity is not simply helping utilities become more resilient. It is helping them quantify risk, prioritize investments, secure funding, and demonstrate value. Resilience alone rarely gets projects approved. Resilience tied to operational reliability, regulatory readiness, and funding eligibility often does.
The same situation is happening in Cybersecurity
Cybersecurity Is Now an Operational Risk
For years, cybersecurity was treated as a specialized technology concern. Water utilities understood the risk, but many viewed it as separate from day-to-day operations.
Cyber security is no longer considered different from the utility’s. EPA’s own director of Water Infrastructure and Cyber Resilience has cited estimates of a three-to-sevenfold increase in cyberattacks against critical infrastructure, and a May 2024 EPA review found that more than 70% of the drinking water systems inspected since September 2023 were failing to meet basic cybersecurity requirements, in some cases leaving default passwords unchanged or allowing former employees to retain system access.
Under Section 2013 of America’s Water Infrastructure Act, community water systems serving more than 3,300 people must complete a Risk and Resilience Assessment and Emergency Response Plan on a mandatory five-year cycle and EPA can assess penalties of up to $25,000 per day for non-compliance.
The Oldsmar, Florida incident remains one of the most recognizable examples. In 2021, an attacker gained remote access to a water treatment facility and attempted to increase sodium hydroxide levels to dangerous concentrations. The change was detected and reversed before harm occurred, but the incident became a defining moment for the industry because it demonstrated how operational technology vulnerabilities can quickly become public health risks.
The vendors understood that cybersecurity is not optional, it is mandatory for all.
Utilities are not looking for another dashboard, another software platform, or another compliance checklist. They are looking for solutions that reduce operational complexity.
The vendors creating the most value are increasingly those that bridge operational technology, compliance reporting, cybersecurity, workforce constraints, and system modernization rather than treating them as separate offerings.
The next wave of regulatory activity reinforces that now government bodies have made cybersecurity upgrades necessary to prevent such cases from occurring again.
The Next Compliance Wave Is Also Already Forming
Microplastics, harmful algal blooms, and potable reuse are often discussed as future challenges, but each is steadily moving closer to the mainstream regulatory conversation.
EPA’s draft Sixth Contaminant Candidate List (CCL 6), published April 6, 2026, includes microplastics for the first time in the program’s 30-year history. The list is still in draft form, the final list is expected to be signed by November 17, 2026.
EPA reports that more than 70 drinking water reuse projects now serve over 8 million people per day across the United States. Through programs such as the National Water Reuse Action Plan and REUS Explorer, federal and state agencies are actively building the frameworks that will support broader adoption.
The point isn’t that the cybersecurity market is growing. It’s that cybersecurity is no longer a standalone category for utilities, it’s merging into how they think about operational risk overall.
Utilities don’t evaluate these issues in isolation. Microplastics get weighed alongside resilience. Resilience gets weighed alongside funding. Cybersecurity gets weighed alongside operational risk. Increasingly, they’re all facets of the same decision.
Most vendors, meanwhile, are still organized around the old categories, building teams and product lines around individual regulatory silos rather than the combined problem utilities are actually solving.
That’s creating a widening gap between how utilities experience these problems and how vendors bring solutions to market and it may be the most important strategic shift happening in the water sector right now.
If you found this article valuable, you might also enjoy “How $2.2 Trillion Funding Gap of U.S. Water Infrastructure Is Moving Toward Replacement. And Why Vendors Need to Move Before the RFP”, where we take a deeper look at another challenge shaping the future of water utilities and what it means for vendors.
