Into the cloud for meter-to-cash?

IDC Energy Industry Insights Community –

In recent days, two telecommunications companies have announced cloud offerings for meter data management (MDM), and eventually meter to cash services. The concept sounds appealing, but are utilities ready for this type of cloud offering?

Verizon and MDM vendor eMeter announced their partnership to offer cloud-based meter data management services on February 1. The partnership is not exclusive, but does go beyond marketing to include work on putting emeter's application into the cloud setting. So far, there are no customers that have signed on, but the companies are counting on pulling in customers, particularly small to mid-tier utilities and municipals deploying MDM based on the premise that these may not be able to afford a capital investment in an MDM application. The cost to the utility will be in the set-up (configuring to the utilities' requirement, and integration with Advanced Metering Infrastructure (AMI) and customer care and billing, for example) and on-going operations which will be on a per meter basis. This will be part of Verizon's Smart Grid Connect offering.

Heavy weight Deutsche Telekom has an offering through its systems integration subsidiary T-Systems. It is software as a service offering that will cover the meter reading to billing. Their first customer is an outsourced service provider - modulus GmbH - that provides meter reading and billing services to energy providers. The T-System offering moves more into the cash side of meter data to cash, while Verizon's Smart Grid Connect is more on the meter to data side. Although a different commercial relationship, it is another example of a telecommunications company partnering with an application or services firm to deliver services through the cloud.

It is certainly clear that telecommunications companies are making a big play for the smart grid space. The upside is getting a bigger piece of the utility telecommunications business, including data services and network operations and this piece is an entry point. Vendors stand to gain by having the heft of telecommunications vendors behind them. IDC Energy Insights does forecast public cloud (application development and deployment software, application software, servers, storage and system infrastructure software) in utilities in the United States to grow over the next five years at a CAGR of over 21%. The question is will utilities opt for MDM or customer care and billing in the cloud?

In North America, there is a market for business process outsourcing that is being addressed by vendors such as Vertex and Hansen Technologies. That market was largely born out of deregulation in the late 90s. It stands to reason that there are retail energy providers in the market that could benefit from an MDM offering, although in deregulated markets, it will be interesting to see whether transmission and distribution utilities owning the meters will be the ones to do the MDM. That is certainly the case with Texas, where companies like Oncor and Centerpoint have purchased MDM applications. IDC Energy Insights is currently in the field preparing for release of our smart meter tracker, so we are collecting lots of detailed data on the status of smart meter deployments by utility size and type, which could provide an indication of just how many companies would be likely to be looking for a cloud solution.

In theory, cloud for MDM makes sense - less capital investment, lower risk if the company is at the pilot stage and not sure about full deployment - etc. Of course, with all the attention on privacy and security of customer data, the first major hurdle vendor with cloud offerings will have to address are apprehensions about letting customer data off premises. The telecommunications companies should have that down by now, having to meet FCC regulations. In practice, it remains to be seen just how big the uptake will be and whether meter-to-cash in the cloud will end up as a large segment of the public cloud with utilities. We await the first year experience of first customers.

Insider: How the basic tech behind the Internet works
Join the discussion
Be the first to comment on this article. Our Commenting Policies