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Utilities to Pump $11.2B Into Smart Grid – Study

Jason Meyers
8/26/2014
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The smart grid as a service market will exceed $11.2 billion by 2023, a new report from Navigant Research forecasts, signaling the growing importance of communications technology in the utility sector.

Smart grid as a service -- or SGaaS -- platforms essentially outsource the communications functions of the smart grid, meaning more utilities will rely on communications service providers and technology vendors for the communications functions required of services such as smart metering, distribution and substation automation and analytics.

The development would be a major shift for utilities, which are grappling with the challenges of operating outdated communications networks but have been historically slow to migrate to advanced communications technologies. (See UTC Telecom 2014: More Power to You.)


For in-depth coverage of the smart grid and other utility communications topics, go to Light Reading's dedicated utility content channel.


Navigant's report predicts that outsourcing of communications functions related to smart grid deployments will become more palatable for utilities as they struggle with budget constraints and a dearth of internal IT intelligence, and as cloud-based solutions prove successful for businesses of all types. The report cites $1.7 billion in SGaaS spending in 2014.

If it pans out as the Navigant report predicts, SGaaS could provide market growth opportunities for telecom industry vendors and service providers that have traditionally not seen as much business from the utility sector. AT&T Mobility LLC , Verizon Communications Inc. (NYSE: VZ), Sprint Corp. (NYSE: S), Alcatel-Lucent (NYSE: ALU) and Ericsson AB (Nasdaq: ERIC) are all cited as key industry players in the report.

— Jason Meyers, Senior Editor, Utility Communications/IoT, Light Reading

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thebulk
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thebulk,
User Rank: Light Sabre
8/26/2014 | 12:33:51 PM
makes sense
This makes a lot of sense for utility companies, if they can not mantain their own communications networks then outsourcing that piece is a good fit. 
jasonmeyers
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jasonmeyers,
User Rank: Blogger
8/26/2014 | 1:57:12 PM
Re: makes sense
Agreed - I just think it will be a matter of the communications decision-makers within the utility organizations trusting that a cloud-based managed service will meet their expections for reliability, security, etc.   
bosco_pcs
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bosco_pcs,
User Rank: Light Sabre
8/26/2014 | 2:42:43 PM
Re: makes sense
A minor nitpick, people should stop bolting 'aaS' on to everything as if rebranding will create markets!

Back to Smart Grid, it is interesting Echelon decided to get out of smart grid (a portion of it anyway) biz so it can focus on IIoT. Perhaps size matters and it sees writing on the wall, so it chooses to refocus its asset and it has nothing to do with smart grid viability
thebulk
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thebulk,
User Rank: Light Sabre
8/26/2014 | 2:45:19 PM
Re: makes sense
I am also a bit sick of seeing aaS on everything. But sometimes it does make sense.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/26/2014 | 4:02:23 PM
Re: makes sense
It is a "buzz" that gets old--for sure.   But I see no other choice as we have to deal with climate change and the changing dynamics of energy itself--including the continued challenge to traditional power genearting capabilities.    For instance, Lake Mead is at its' lowest level--and if it drops to 900 Ft I believe, the generators @ Hoover Dam will stop supplying electricity.   With San Ofore offline in California and a clamour to decommision the last working nuclear plant in California, there needs to be a radical rethink.  There is a big question indeed as to whether this will work--but there is hardly a choice.   Elements of it has already been happening with the installation of smart meters and ways to help control the flow of power as it is--but that can only so far.    
thebulk
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thebulk,
User Rank: Light Sabre
8/26/2014 | 10:50:02 PM
Re: makes sense
I think as explained here it has a good shot, but there can always be complications.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/27/2014 | 12:05:21 AM
Re: makes sense
Complications are part of change--but I view this as of those "Must Do's" in order to guarantee a reasonably decent energy future.    It is worth a shot.  
thebulk
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thebulk,
User Rank: Light Sabre
8/27/2014 | 12:07:10 AM
Re: makes sense
I agree, smart grids will be a key factor in securing the energy future of the planet.
kq4ym
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kq4ym,
User Rank: Light Sabre
8/27/2014 | 9:37:18 AM
Re: makes sense
As the utility companies make increasing use of smart grids they will ceratianly make use of outside help in managing the data. Just as electric companies now hire outside companies for line installation and repairs, they'll certainly be hiring lots of firms to manage and build smart grids as well.
thebulk
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thebulk,
User Rank: Light Sabre
8/27/2014 | 2:17:58 PM
Re: makes sense
No doubt they will likely seek help managing all the data, its a daunting task. 
pcharles09
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pcharles09,
User Rank: Light Beer
8/27/2014 | 12:27:09 AM
Re: makes sense
@thebulk,

If you don't see it, the value proposition decreases. Marketing geniuses have determined that the 'as a service' makes people feel take care of... which sells!
MikeP688
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MikeP688,
User Rank: Light Sabre
8/27/2014 | 1:01:41 AM
Re: makes sense
I have seen 'snipets" of it already happening--I can't see why people will not embrace the emergence of it both at the consumer and business level as epitomized what Sempra Energy's San Diego Gas& Electric is trying to do.  Please see this: http://tinyurl.com/kjhz2bj
pcharles09
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pcharles09,
User Rank: Light Beer
8/27/2014 | 6:00:28 PM
Re: makes sense
@MikeP688,

HVAC as a service. It's a bit of an exagerration but that sounds like a very interesting idea. It would definitely help to make the install & maintenance costs much cheaper.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/27/2014 | 10:05:32 PM
Re: makes sense
I personally am fascinated by this notion of "think different" that seems to be the prevailing mode.   I hope to sign up for the program soon by SDG&E. 
pcharles09
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pcharles09,
User Rank: Light Beer
8/31/2014 | 10:37:41 PM
Re: makes sense
@MikeP688,

Looking forward to your review/feedback.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/31/2014 | 11:22:37 PM
Re: makes sense
Thank you sir....eager to get things going-one thing is for sure as we implicity noted throuyghout our deliberations:   we have to think different..otherwise we'd be truly living up to Einstein's admonition that, "..Insanity is doing the same thing over and over and expecting a different result..." :-)
pcharles09
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pcharles09,
User Rank: Light Beer
9/23/2014 | 9:25:49 PM
Re: makes sense
@MikeP688,

Very true. Although we humans tend to make those same mistakes anyway. At least you're aware of the potential & fighting back.
MikeP688
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MikeP688,
User Rank: Light Sabre
9/30/2014 | 1:52:47 AM
Re: makes sense
As I reflected upon all that we've been privy to and deliberated here, my mind drifted onward to what Don Miguel reminded us of..and I shared it on my twitter feed:

Simply do your best, and you will avoid
self-judgment, self-abuse and regret.
- don Miguel Ruiz


That, in the end, is our life's work :-)
pcharles09
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pcharles09,
User Rank: Light Beer
9/30/2014 | 11:28:56 PM
Re: makes sense
@MikeP688,

I agree. It's just the self-doubt of whether or not we're truly achieving or giving our 'best' at all times. That is the dilemma.
MikeP688
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MikeP688,
User Rank: Light Sabre
10/1/2014 | 1:41:24 PM
Re: makes sense
It should never prevent us, though--especially as we continue to deliberate a viable future and really assess and think about a "Post Digital World" which I think is part of what I am excited about here as the New IP here begins :-) 
pcharles09
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pcharles09,
User Rank: Light Beer
10/28/2014 | 8:22:11 PM
Re: makes sense
@MikeP688,

New IP? Elaborate?
MikeP688
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MikeP688,
User Rank: Light Sabre
9/30/2014 | 5:47:57 PM
Re: makes sense
One person can truly do what they can to change the World.    Although I am still awaiting the "Smart Reader" that SDG&E has proposed, it is still gratifying to see a sense of purpose that will make our lives better in the end.
pcharles09
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pcharles09,
User Rank: Light Beer
9/30/2014 | 11:24:58 PM
Re: makes sense
@MikeP688,

How smart is the reader?
MikeP688
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MikeP688,
User Rank: Light Sabre
10/1/2014 | 1:39:22 PM
Re: makes sense
Happy October!! :-)

I am awaiting notification and installation.  The "PR" notes that it is "quite smart" and will be my true formal forey into the interent of things.    As I assess it, I'll comment on it here in the Community :-)

 
pcharles09
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pcharles09,
User Rank: Light Beer
10/28/2014 | 8:21:17 PM
Re: makes sense
@MikeP688,

Looking fwd to the IoT updates.
MikeP688
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MikeP688,
User Rank: Light Sabre
10/29/2014 | 3:32:11 PM
Re: makes sense
It has been "pulling teeth" trying to get things in here.    Although SDG&E is to be commended for this, I tried to assess the status of the order and could not believe how they are worst than Government because Customer Service could not confirm or not.  I'll continue to pursue this as we assess a way to be different--becuase there is no other way--is there? 
thebulk
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thebulk,
User Rank: Light Sabre
8/27/2014 | 1:15:38 AM
Re: makes sense
For sure, I see the value in Smart Grid, but the aaS part is just sort of silly to me. 
pcharles09
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pcharles09,
User Rank: Light Beer
8/31/2014 | 10:34:31 PM
Re: makes sense
@thebulk,

Gotcha. Maybe in the next few years, it'll get replaced with a more appealing catch phrase.
jabailo
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jabailo,
User Rank: Light Sabre
8/26/2014 | 1:15:46 PM
Networks as a Utility
It could be the final evolution of the Internet, much as we did with water, energy, sewage, transportation, mail delivery...now digital communications.   Public Utility Districts in rural areas already supply optical broadband, in many cases at Gig speeds, faster than what commercial customers have been getting in cities!   

Also, there are many mobile applications that are data-only and need a low bandwidth, but pervasive system.  For example, keeping track of buses, where subscribing to phone networks would be prohibitive.

 
DHagar
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DHagar,
User Rank: Light Sabre
8/26/2014 | 2:26:50 PM
Re: makes sense
@jasonmeyers, which also assumes that they even understand what their needs are and how they are different with the smart grid.  Also, if they are going to outsource segments or the total function, as with the cloud, you won't get want you want if you don't know what you need.

 
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