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People in modern cities rely on effective public infrastructure for utilities such as power and water. After decades of relying on outdated operation models, the utility industry is turning to cloud computing to improve their reliability and availability. Moreover, utility companies are using cloud computing solutions to satisfy their customer demands of electronic payment and customer service.

Public cloud IT provides the utility industry with highly available, reliable and cost-effective infrastructure. This allows utility companies to run operations without having to maintain IT hardware and software. This article explores how cloud computing is changing the utility industry. 

Adapting Utilities Service to the 21st Century

A few years ago, if you wanted to pay your electricity bill or request a water connection for a new home you would need to go personally to the company or the post office. Now you can make payments, request reconnections, or initialize service by using the company website or the phone app.

Things are changing for the utility industry. The advance in technology has driven utilities to change their business models, adopting cloud solutions to adapt to the needs of a digital society. Here are some of the benefits cloud computing offers to utilities:

Higher Reliability

Utilities need to be reliable as downtime or failure can have disastrous consequences. Cloud providers provide highly available infrastructure combined with disaster recovery capabilities and backup. Most public cloud providers ensure over 99.9% of availability, meaning the downtime is minimum. As cloud providers maintain the infrastructure, they patch, load balance and monitor networks for continuous availability. This helps utilities to focus on operations instead of IT maintenance.

Cloud providers usually offer data replication by copying the data on different servers distributed geographically. This enables faster disaster recovery in case one of the servers fails. The utility security concerns are addressed by the strong security of the public cloud. Cloud security standardization supports strict security protocols and specialized software. Moreover, most cloud providers have a threat management system built-in, actively searching and responding to possible threats.

Faster Time to Innovation

A cloud environment allows for quicker development of software applications and innovations. Utilities can quickly get new applications to satisfy their customer demands. Moving to the cloud gives utility companies the flexibility they need to incorporate new technologies such as Internet of Things (IoT) devices.

Cost-Effective

Cloud-based solutions enable utilities to reduce their total cost of ownership and operations, by offering the scalability they need to cater to the increasing number of users. In the age of smart cities, utilities are retrofitting or replacing outdated assets, incorporating IOT smart meters and Industrial Control Systems (ICS). Moving operations to the cloud allows utility companies to save the costs of maintaining an IT infrastructure, focusing instead on other priorities. 

Cloud Computing Options

The term cloud computing refers to delivering storage, analytics, databases, networking, and other computing services over the internet (the cloud) instead of using a local server. A cloud provider is a company that offers those services on the cloud. Cloud computing companies usually offer three service models:

Software-as-a-Service (SaaS)

This model for software distribution involves a third-party provider (the cloud provider) hosting software applications and making them available to customers via a subscription license. An example of SaaS could be Amazon Web Services (AWS). Software companies are developing “smart grid” technology packages to integrate utility systems and operations. For example, General Electric (GE) Digital Energy is offering SaaS packages adaptable to individual utilities.

Platform-as-a-Service (PaaS)

PaaS is a cloud computing model that involves a third-party provider delivering software and hardware tools for application development over the internet. These tools are hosted in the providers’ infrastructure. An example of platform-as-a-service is Microsoft Azure. For example, Shell Oil is using cloud computing to analyze geological data produced by seismic sensors.

Infrastructure-as-a-Service (IaaS)

This service model provides computing infrastructure over the internet. IaaS delivers hardware, software, storage, data center, network, and server capabilities to its users. All major public cloud providers, such as AWS, Microsoft Azure and Google Compute Engine (GCE) provide IaaS options. Oil and Gas companies are using IaaS solutions combined with edge computing for big data processing and data warehousing. 

Cloud Migration of Utility Companies

The utility industry is making major changes in digital transformation. Many companies are leveraging IoT and big data analytics to improve productivity and customer service. Cloud adoption will likely happen in waves, as control centers have been upgrading every decade or two.

A critical constraint in any cloud migration strategy is meeting cybersecurity requirements which are met by the array of cloud security solutions available. Many of the larger utilities are deploying in a hybrid-cloud computing model to reduce security risks for critical operations.

Utility companies typically start by migrating retail and distribution sectors, and fully integrated utilities are becoming more common.

Common Use Cases

Cloud services are used for a variety of purposes by utility companies.

Retail

Utility companies often use an omnichannel experience to deliver retail services through a public cloud. For example, commodity billing and providing online services to customers. 

Distribution

Utility companies can use cloud computing to manage smart meter and grid data. This usually involves creating an energy cloud service that manages distribution and meter system operations. 

Fully Integrated Utilities

There are some cases of companies going all the way, moving to a hybrid cloud approach.  Companies managing sensitive operations such as gas and oil companies choose to maintain their operations close-to-home, in an on-premises environment, while outsourcing retail operations to the cloud. 

Conclusion

Disruptive technologies such as cloud computing are typically not quickly adopted by regulated industries. For utilities, the advance of smart city models and the digitalization of society has made them turn to cloud-based solutions. Cloud computing allows utility companies to provide better and more reliable services while keeping IT costs low. Times are changing, and we are likely not far from seeing a full cloud integration for utility companies.

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