The utilities cloud imperative

Utilities IT operating models under pressure for radical change

COVID-19 has given new urgency to the utilities cloud imperative. Within a few short weeks the scalability, resilience, flexibility and accessibility of public cloud looked a lot more attractive, as utilities sought to manage uncertainty and pivot to a different operating model.

As utilities executives assess that potential new landscape, together with the strong performance of the public cloud during the past few months, a typical conclusion is that it’s time to ramp up their utilities enterprise cloud strategy.

State of cloud in utilities today

Often, utilities’ own IT infrastructure, systems and approaches hold them back from harnessing the power of cloud and agile capabilities.

As enterprise software platforms and infrastructure have matured, more features have been added to legacy systems, increasing complexity. Over time, these patterns result in additional fixed operating costs, diverting investment away from innovation and new digital capabilities. The challenges of connecting and updating these systems has become overwhelming. Month-by-month strategic digital and IT platforms become even more difficult. As a result, many utilities simply add new systems in parallel to existing ones to achieve the functionality they seek, creating more technological sprawl, complexity and cost.

The good news: Utilities are doing something about it. According to our Future Systems research many have implemented cloud solutions in their IT landscapes.

In fact, nearly all industry leaders surveyed have implemented a wide range of cloud solutions while often less than 50% of lower performing utilities have taken advantage of cloud.

Accelerating the energy transition with cloud for utilities

As utilities evolve toward a new power model, the pace is, in some cases, out of step with sustainability and carbon commitments made by stakeholders.

Utilities are not the only ones taking action. Businesses, cities and communities are undergoing their own energy transitions, putting pressure on their energy providers to keep pace with more renewable options, support for DERs, and improved energy-efficiency and management capabilities. As organizations pivot from social license to social responsibility and value, are utilities moving fast enough? Cloud can be at the core of elevating utilities to play a larger role and accelerating energy transition and delivering on corporate sustainability priorities.

Cloud technologies are foundational to facilitating a more complex energy system that requires orchestrating DERs, balancing renewables, and offering deeper insight and control over energy usage. Beyond improving the current energy system, the cloud also has the potential to create platform energy economies and open innovation, bringing together data and services from multiple providers.

Moving to action

Cloud investments tend to deliver results. However, achieving the full value of cloud can be difficult. For utilities looking to fully realize the value of cloud, our experience has pointed to five key actions.