From Energy to Cloud Transition – Part 3: Cloud Technologies and Potentials

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Cloud computing enables utilities to counteract the disruptive threat posed by technology companies and to play an active role in shaping digital competition.

In the first part of our blog series “Headwind for Utilities“, we addressed the tensions of liberalization, energy transition and digitization, which puts utilities under unprecedented pressure to change.

In this area of conflict, IT is becoming increasingly important. This is because technology companies such as Google and others pose a disruptive threat and try to push energy supply companies back to the infrastructure level.

The main focus of IT in the future must be to identify the potential of new technologies and (as reported in our second part of this blog series) to act as multi-speed IT with at least at two speeds. On the one hand, efficient IT processes and IT structures must ensure operational excellence in the traditional business model. On the other hand, utilities must be future-oriented in order to participate in the digital change of the industry and their customers.

The only way to achieve this is to use cloud computing. In contrast to the tedious and expensive setup of traditional systems, IT resources from the cloud are available on demand, are paid for according to use (“pay per use”) and enable highly efficient automated IT and the use of DevOps. Cloud computing is fundamentally changing companies’ traditional way of thinking about IT resources.

What cloud services are available and what are their benefits?

The cloud offers many advantages: greater flexibility, scalability, agility and efficiency as well as stability and lower costs.

Cloud computing can take place in different ways. In addition to the form of provision as a public, private or hybrid cloud, it must be clarified how deep the service of the cloud should go.

Infrastructure as a Service (Iaas)

Infrastructure as a Service (IaaS) describes the provision of virtualized IT infrastructure. In IaaS, a customer uses server, storage, network and the rest of the data center infrastructure as an abstract, virtualized service through the Internet. Via a service portal, the customer can select the type and scope of provisioning of the infrastructure components, which are made available automatically in just a few minutes. Iaas is particularly worthwhile in the case of unpredictable demand for server, storage and computing capacities as well as regular significant fluctuations in demand that lead to peak loads.

Platform as a Service (PaaS)

A Platform as a Service (PaaS) layer automates the provision of a development and operating environment. The management of databases, security, integration, development tools, associated test and release processes and the management of the operating environment are consistently automated. Application development is accelerated, the developer only needs to write the code and pass it to the platform. They benefit from access to numerous development tools, templates, code libraries and build backs and can thus provide new functionalities within hours or minutes using agile methods.

Software as a Service (SaaS)

Software as a Service (SaaS) delivers ready-made applications that can be used directly by the customer as a web application. The SaaS provider takes over the operation, further development and maintenance of the software. Thanks to lower investment amounts, the specialist departments of utilities have greater decision-making power in IT system decisions. This allows them to concentrate fully on their core business and the development of new business models. Often, utilities are forced to invest in new software to meet regulatory requirements. However, the total cost of ownership of some systems is so high that the business models often are not profitable so that the business model has to be abandoned. A current use case are municipal utilities that want to implement the integration of gateway administration processes via SaaS solutions in order to secure their market role as metering point operators in the course of the smart meter rollout.

Therefore, the way to the cloud is more than advantageous, but also involves risks. How do you get into cloud precisely? What strategic considerations are required? Which organizational and architectural aspects have to be considered in detail?

You can find answers to these questions in our 4th part of the blog series: Cloud strategy.

In our PoV “Cloud in the energy industry – untapped potentials” we are bridging the gap from the mega trend of digitalization to a tailor-made cloud strategy for utility companies.

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