Dec 12, 2022

How is Cloud computing taking utilities to the next level?


The energy and utilities (E&U) sector is going through an unprecedented change. As a capital-intensive market, utilities sector contributes to the incumbents' domination. However, digital disruption is posing a significant threat to incumbents while providing opportunities for new entrants. Today the industry is heavily engaged in various technology and business transformation initiatives.

Traditionally, the E&U sector is lagging behind other industries in providing customers with options to control their energy consumption. Low consumer involvement, insufficient customer information, and a high turnover rate have long been their Achilles heel. Customer satisfaction is low due to legacy infrastructure, non-reliable energy distribution, and tight regulatory mechanisms. With new entrants investing in technologies to make energy distribution smarter, digital natives expect everything to be 'just a tap away’ with service suppliers evaluated based on their digital portfolio. Digital adoption allows utility providers to address these issues and provides a superior customer experience enhanced through a data-driven, personalized, and innovative approach.

To address the challenges of legacy infrastructure, increased regulatory pressure, and heightened consumer expectations, it is critical to leverage high-performant and well-designed cloud computing services.

How does cloud computing help utilities overcome their business challenges?

Cloud technologies empower utilities to digitalize their legacy infrastructure with energy transition enabler technologies such as data analytics, the Internet of Things (IoT), artificial intelligence (AI), and augmented reality (AR), and gain a competitive edge with decarbonization and decentralization. Adoption of the cloud also enables utilities to transform themselves into more reliable, resilient, and cost-efficient businesses with reduced CAPEX and OPEX, increased flexibility, and additional business use cases. This, in turn, helps to elevate customer experience levels, such as bespoke energy programs, renewable energy services, smart cities, and connected electric vehicles. Cloud computing is ushering utilities into the next generation of energy service delivery.

Undoubtedly, cloud platforms/technologies make utilities smarter, accelerate the energy transition, and help meet energy sustainability goals. However, the importance of data, security, and compliance are equally critical in making the utilities’ journey to the cloud a successful one.

Role of data, security, and compliance for utilities in the age of digital transformation

As digital transformation expands utilities’ service capabilities, it also provides a surface for malicious actors to steal or modify sensitive business and operational data. A Ponemon and Siemens study found that 56% of utilities experience at least one shutdown or data loss due to a security breach each year. This is an alarming sign to be prepared and imbibe security across the value chain.

 Data and cybersecurity play an important role for utilities decision-making in complying with state and federal regulations (FERC - Federal Energy Regulatory Commission, NERC - North American Electric Reliability Corporation, CIP – Critical Infrastructure Protection, etc.) and protecting customer data. The following are 2 key imperatives that utilities should consider to secure their cloud transformation initiative, ensure compliance, and make privacy a top priority.

Make decisions based on data

When it comes to leveraging the cloud, utilities must review their application portfolio and determine the sensitivity of data within each application. Data should be classified according to factors such as regulatory, operational, and security implications. For example, when reviewing an advanced metering infrastructure (AMI), it is likely that the data contains personally identifiable information (PII). Once a utility understands the data in the environment and where it resides, it should use that knowledge to determine which applications are cloud candidates.

Cloud candidacy and platform selection should be influenced by data classification efforts. When determining cloud candidacy, the term "cloud" can refer to private cloud, public cloud, and hybrid cloud. Based on the utilities’ risk profile, regulatory requirements, and cybersecurity posture, AMI may be ruled out of the public cloud. It could, however, be a candidate for hybrid or private cloud.

Include cybersecurity in the roadmap

Cybersecurity attacks have become more common with digital platforms connecting ever-expanding virtual networks of homes, vehicles, offices, factories, and power grids. The scale of risk and impact varies with digital connectivity and the massive ecosystem shifts brought about by digitalization, decentralization, and the energy transition. It is critical to address cyber threats as a key value chain enabler.

As part of cloud transformation, new tools, processes, and controls must be introduced to enable secure operating models. Many of these features should be implemented before utilities move their first application to the cloud. 

  • Tools: Invest in cloud security tools such as a cloud access security broker (CASB) to help manage and secure the flow of data into the cloud environment and enforce cybersecurity policies. It also evaluates how to extend current identity and access management (IAM) solutions to the cloud
  • Processes: Develop processes to reliably deploy new applications based on data classifications
  • Controls: Establish a cloud policy and consider revision of risk management policies to reflect cloud working practices

Microland Secure & Compliant Cloud (SCC) solution

Microland understands the cloud computing needs of the E&U landscape and also that this landscape is significantly shifting towards having a clear cloud strategy that integrates privacy, cybersecurity, and data analytics. In alignment with industry needs, Microland’s solution, Secure & Compliant Cloud, is purpose-built for utilities with AIOps-driven cloud management, built-in security, and compliance controls, ensuring seamless and secure operations as utilities embark on their digital transformation journey. The solution enables utilities to lower vulnerabilities by ensuring 100% compliance, saving up to 25% on operational expenses, boosting reliability, and customer experience. Customers can cloudify their workloads through our robust partner ecosystem to improve performance, accelerate innovation, improve customer experience, maximize safety, and reduce carbon footprint.

Microland helps orchestrate all these solution components to ensure safe, sustained operations, which is a top priority for leaders in the utilities sector. There is no doubt that many E&U players have risen to the challenge and have realized the crucial role emerging technologies play, and utilities must harness their capabilities to seize the opportunities presented by the new energy world. The utilities industry's evolution and response to difficulties during the next decade will have far-reaching consequences for future generations.