This week, David Socha, practice leader of utilities and smart cities at Teradata, continues his analysis of the benefits to utilities of using cloud solutions. In my last blog, I discussed some of the reasons that utilities have been reluctant to embrace Cloud solutions to the extent that many other industries have.
In summary, these reasons were:
- The Cloud (whatever that means…) is not secure
- Cloud solutions typically burn opex, in a world where capex is king
- Cloud solutions are immature
I hope that in that blog, I made some counter-arguments that at least made you think – and maybe even changed your mind. This time, I’ll concentrate on the benefits: the positive case for taking your utility businesses into the Cloud.
Let’s begin by dispelling a myth. Many believe that cost saving is the key driver for considering Cloud solutions over other methods of deployment.
This is a flawed assumption. Now, there will be exceptions (and shrieks of horror from Cloud-only solutions providers when they read this). But there’s plenty of evidence to show that Total Cost of Ownership (TCO) of, for example a Data Warehouse & Analytics solution is broadly the same whether you choose Cloud, Hybrid or On-Premise for your deployment.1 So if that’s the case, what exactly is the point of the Cloud?
Flexibility and agility of cloud services
For some, handing over IT infrastructure management to a company that does it as-a-service (and for-a-living) is key.
Imagine no longer having to worry about scaling your company’s IT to meet your needs. No longer having to worry about those constant hardware and software updates. Or server outages. Woohoo! Of course, how much you value this benefit is mainly dependent on how good you consider your existing IT providers.
As I said already, moving to the Cloud probably isn’t going to save you a lot of money overall. But it just might save you a great deal of hassle. And maybe even give you back a few more hours sleep at night.
Moving to the Cloud is all about two words: flexibility and agility. Flexibility is being able to do things you might not have been able to do if you were completely responsible for buying, installing and maintaining all that IT infrastructure in-house.
Agility is being able to try something quickly and get rapid results, or to change direction fast with minimal waste or hassle. Let’s look at couple of examples.
Let’s say your Board has decided that “understanding customers better” is now Very High Priority. Unfortunately, you don’t really know what that means to them.
And, there are so many vendors out there with so much slideware that it’s hard to know how to invest your time and money.
[quote] Wouldn’t it be great if there was a way to quickly spin up an environment where you could investigate certain toolsets and capabilities; get a feel for working with a particular vendor; and demonstrate some quick results based on real data?
Cloud implementations are perfect for just that scenario. And hey, if results are not what you expect, well….OK.
You’re much more informed now; you didn’t waste a lot of time or money; and you don’t have a pile of redundant kit in your Data Centre. Change direction fast.
If all does go well though, you may even use the environment you just created as the foundation for a full implementation, deliverable almost immediately. How cool is that?
Cloud solutions and smart meter projects
Moving on, let’s now consider a business that is part-way through a rollout of Smart Meters.
Let’s say they’re already storing and managing their Smart Meter data in the Cloud. Consider the flexibility they have. Their IT infrastructure can grow as they roll out more meters and data volumes increase.
If their rollout schedule changes, so can their provisioning agreement with their Cloud provider.
When they’re ready to discover new insights from all this data, they can go to Amazon Web Services and deploy advanced analytics immediately.
They can choose to integrate that Smart Meter data with say, Billing, Demographics, Call Centre Logs…whatever2.
Or perhaps they need major computing power to churn that data during billing cycles, but not so much at other times.
They can pay for all that power just when they need it and turn it off again when they don’t. Their Cloud solutions give them all that flexibility.
Our time is coming…soon
Recent studies do seem to suggest that utilities are at last beginning to edge towards Cloud implementations.
Last year, IDC stated that 74% of utilities they surveyed see Public Cloud as their dominant, long-term platform strategy.
But there’s a very long way to go. The same survey also showed that 63% are not ready to cede “control” to a Cloud provider. Hmmm.
I believe the benefits of Cloud deployment are real and demonstrable. And in times of great turmoil in the industry, surely flexibility and agility are just the kind of characteristics that utilities businesses need most.
It’s clear to me. It’s time for utilities to embrace the Cloud.
1 If you’re in any doubt about that TCO statement I’d be very happy to discuss it further. A blog is not the place for fully worked TCO proofs.
2 Because let’s face it, analysing just the Smart Meter data by itself is probably pretty dumb.
Image credit: Central colo.com