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The development would be a major shift for utilities, which are grappling with the challenges of operating outdated communications networks but have been historically slow to migrate to advanced communications technologies.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.)
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