I was asked recently by a vendor in the market if the cloud is “real.” The reason for the question was to determine if it is time to focus a service offering for utilities in the cloud, on-prem, or both. If I were to base my response on the various conferences and market speak in the industry lately, the obvious answer would be a resounding “BOTH!” But before we jump to the easy answer, let’s look at the cloud and where the various offerings are for utilities today.

First, the cloud is not new. One can argue that service providers to the U.S. electric cooperative market were early versions of cloud services in the mid 1960’s. Central Area Data Processing Cooperative (CADP) and North Central Data Cooperative (NCDC) both served electric and telecommunication cooperatives with information processing services and accounting and billing software. In 2000, they both consolidated and formed Lake St. Louis-based NISC. Today NISC provides services to over 800 energy and telecommunication utilities in all 50 states related to accounting, customer care & billing, cyber security, engagement, operations, and technical services. In 1976, Atlanta-based SEDC was formed by a group of Electric Membership Cooperatives. It provides services to over 500 distribution utilities in the U.S. related to CIS/Billing, FIS, financial services, mobile work force management, GIS and engineering, document imaging, IVR, work management, cybersecurity, and advanced visual analytics.

This year I have attended several events such as EUCI’s Billing and Payments for Utilities, DistribuTECH, IEEE PES T&D, and CS Week. One thing I have noticed is the increased marketing of cloud services for utilities. One example that appears to be just plain old outsourcing but could someday be called a cloud service was Entergy’s decision to move a good portion of its back office billing exceptions offshore. It has resulted in reduced costs and someday could migrate into AI type solutions where machine learning and robotics automate the exception handling process. Another example included Liberty Utilities use of service provider Fiserv for receiving data, processing, and mailing bills through to various presentment options and remittance. This accelerated revenue collection for Liberty while reducing costs.

In some more applicable examples to cloud directly, Washington DC-based, DC Water, selected Vertex to provide a SAP-based CIS/Billing platform provisioned as a cloud service. The effort included other cloud-based apps such as a customer portal and mobile app, mobile field work management, electronic bill presentment and payment, and integrated to other cloud and on-prem solutions. The decision took 18 months to make but once made, DC Water implemented in 12 months utilizing an agile methodology with multiple sprints. New York-based, ConEd, employed a hybrid cloud strategy when undertaking a Digital Customer Experience transformation project. The effort included the website, a mobile application, customer engagement, chat features, web survey solution, and a preference management center. Pros and Cons were evaluated for on-prem vs cloud vs a hybrid approach. ConEd chose the hybrid approach where the low volume components requiring more security control would be hosted on-prem while the high volume components or components needed only infrequently would be hosted on the cloud which offers scalability, flexibility, and high availability.

It seems that only a few years ago many of the vendors serving the utility industry were skeptical if not fully opposed to cloud services. Now, many of those same vendors have a cloud offering or are working to offer a cloud alternative to existing on-prem. The utilities themselves are reaching a point where nearly half of the RFPs issued include a cloud alternative. While we may never get to a point where we serve the industry completely via cloud, I’d say that the forecast is partly cloudy.