09.24.2015Enterprise Tech

How investor-owned utilities can use cloud to their advantage

By: Kyle McNamara

Now is the time for investor-owned utilities (IOUs) to take a fresh look at the cloud. It can help utilities overcome two of the biggest challenges in the industry — increasing consumer electric consumption and infrastructure modernization initiatives. This convergence of events has created new opportunities for IOUs to consider investing in cloud solutions and make the move to a cloud infrastructure.

Verizon’s recent report, "Get Ahead with the Cloud: How Cloud Can Drive Growth and Business Performance for Investor-Owned Utilities," explores the state of the utilities market and barriers IOUs face. It details a three-step strategy on how to start the cloud journey.  

Overcoming the barriers

The barriers to overcome cloud adoption for IOUs are many and include the traditional use of rate-of-return regulations, security and maintaining control over IT systems. IOU purchase decisions are influenced by rate-of-return regulations, but assessing cloud on this basis is too narrow and IOUs should look at the wider benefits that cloud can offer.

For example, according to Harvard Business Review Analytic Services, 71% of businesses said cloud increased their business agility which can lead to increased revenue. Of course, security is always a top priority for utilities. Standards like NERC CIP have hammered home a cautious approach to all aspects of business, and IT is no exception. In reality, many cloud service providers are adept at running highly secure facilities and serve other regulated markets, such as financial services, healthcare and insurance.

Also, many providers operate critical infrastructure themselves — for example, telecommunications networks — and have the skill, experience, resources and technology to meet the security needs of IOUs. Control is another barrier. IOUs have a long history of building and controlling their own IT systems, with an internal separation between IT and operating technology (OT). As IT and OT converge and as the role of IT grows, many IOUs will need to look outside the organization and engage with trusted providers to free up their time and internal resources.  

What are your next steps?

For IOUs, and most other organizations, the journey to using cloud must fit their business. Verizon’s report sets out a three-step approach that IOUs can follow to start developing a cloud initiative that meets their needs and objectives. It starts with taking a broader view of organizational needs and understanding how cloud can contribute to ROI. In this way, IOUs can look beyond the CAPEX and OPEX debate and see where cloud has the potential to deliver real benefits. Next, they’ll need to prioritize their workloads or applications that are suitable for moving to the cloud.

A workload scoring model can be particularly helpful here — detailing information like application lifecycle, criticality, security needs, data formats, and more. The final step is choosing the right partner — one that understands the utilities sector and appreciates their focus on availability and security, and can help them reduce the risk of moving to the cloud. No one is saying that transitioning to the cloud is easy, but evidence shows that the cloud can deliver compelling benefits, whatever your sector. With the right approach, IOUs can overcome the obstacles holding them back from their cloud journey in order to reap the benefit of today’s technology transformation.

Download your copy of the full report, "Get Ahead with the Cloud: How Cloud Can Drive Growth and Business Performance for Investor-Owned Utilities"

Learn more about how Verizon can help energy and utilities reap the benefits of cloud.