Cloud computing technology is fast gaining ground in the country. As per industry estimates, the public cloud services market in India has seen phenomenal growth over the past two years, reaching $1.8 billion in 2017, up from $1.3 billion in 2016. It is further expected to reach $4.1 billion by 2020. Notably, India is second only to China as the largest and fastest growing cloud services market in Asia Pacific.
Of late, there has been an increased uptake of cloud computing solutions among power utilities. The utilities are transitioning to cloud computing for data management, data analytics, customer care, metering and billing interface. Cloud computing simplifies and speeds up a host of business processes for utilities, which would have otherwise entailed a large investment and taken up a lot of time. It allows utilities to achieve their business objectives without building additional infrastructure. Apart from this, after outsourcing data management and other related activities, utilities can focus on their core business. Further, as utilities are beginning to deploy smart meters that will record a huge quantum of data that must be stored and accessed frequently, they recognise the need to invest in cloud computing.
Models and strategies
Broadly, cloud computing refers to the delivery of IT services through the internet without any additional infrastructure. It relies on the concept of sharing computing resources rather than developing local servers or personal devices to handle applications. Different services such as servers, storage and applications are delivered to an organisation’s computers and devices through the internet.
There are different cloud models such as software as-a-service (SaaS), platform as-a-service (PaaS) and infrastructure as-a-service (IaaS), which offer storage solutions and applications on any device, at any time, on the internet.
- SaaS: It typically provides software and databases to clients.
- PaaS: It provides a computing platform, which includes an operating system, a database and a web server. Users can develop their own products using these services.
- IaaS: This is the most basic cloud service, which provides virtual machines, servers, storage, active network components, etc.
Cloud services are also categorised as private, public and hybrid, based on the business needs of a company. A private cloud is an environment operated by a single organisation. It is managed and hosted either internally or by a third party. A public cloud is an environment that renders services that are accessible to the public. Meanwhile, a hybrid cloud is a mix of public and private cloud.
After deciding the type of cloud service, utilities need to identify the business value for critical and non-critical applications, model them and identify a cloud partner to achieve the desired objectives. There are also a host of pre-developed cloud solutions available for utilities to choose from. They can prioritise their requirements and adopt solutions as per their demand. Some of the readily available cloud solutions are in the areas of contact centre and instant voice response (customer request, call centres, web chat, email/fax, interactive voice response, 360-view of accounts, reports); web portals (web-staff access, web-channel partner, web); billing and collection (customer and contract management, invoice management, collection management, debt management, deposit management); and metering interface (meter and data management, and enterprise messaging).
Benefits of cloud computing for utilities
The key benefit of cloud computing for utilities is meeting the ever-increasing data storage requirement. In order to improve their operational efficiency, the businesses need to derive meaningful inferences from the large quantum of performance data being generated during the operational processes. Handling such large amounts of data requires extended storage and data management capabilities. On-demand availability, scalability and super computing features of cloud computing allow businesses to utilise data more effectively and in a cost-efficient manner. Cloud enables speedy enhancement of business capabilities by rapid prototyping and distributed computing, thereby increasing operational flexibility. With cloud, the computing and storage capacity can be instantly increased by simply upgrading the plan and without any additional investment in hardware and equipment. Cloud computing allows utilities to lower their expenditure and move from the capital expenditure model to the operational expenditure model. Industry estimates suggest that with cloud computing, the cost of managing the data reduces by 20-30 per cent. The utilities are facing intense competition, which requires them to deliver the best possible solutions at the lowest cost. Cloud computing not only lowers the expenditure of utilities on data management, but also allows the management to focus on its core competencies. The strategic focus of the utilities can be on the core business and various functions can be outsourced through cloud in a cost-effective manner on a pay-per-use basis.
Cloud computing meets the requirement of the emerging power sector scenario in the country characterised by the rapidly increasing share of renewable energy sources and lower-carbon fuels. For the utilities to keep pace with the rapidly changing energy environment, the utilities need the faster go-to-market, pay-per-use cloud computing solutions that allow rapid prototyping, development and deployment of services.
Another significant benefit of cloud computing for the utilities is information sharing with stakeholders. Utility projects traverse through a complex and geographically diverse ecosystem and involve a host of suppliers, contractors, etc. If the utility data is stored on the local systems, the various vendors and suppliers are not able to access it. Cloud computing allows utilities, vendors and suppliers to remain connected even in remote locations, and thereby help in achieving multiparty collaboration on a real-time basis. Apart from this, cloud computing allows utilities to move closer to consumers by providing innovative capabilities through cloud-based customer relationship management, social media platforms, etc.
Issues and challenges
One of the key challenges of cloud computing is data security. There is a risk of data interception while in transit from cloud infrastructure to the user device or vice versa, which could lead to loss of data from cloud infrastructure and data corruption. The data risks associated with cloud computing can be tackled using third-party authentication, strong identity and access, management for automated provisioning, and authorisation and cryptographic encryption.
Another issue associated with cloud computing pertains to organisational security risks, which might arise due to the exit of a cloud service provider getting out of business, or malicious insiders in the provider organisation. Stringent contract management and comprehensive company evaluation prior to the signing of the contract can help curb this problem. Apart from this, the data of the utilities is exposed to the risk of physical damage at the cloud operators’ end. This can be mitigated through biometric scans, area access management, guards, etc. Meanwhile, the compliance and audit risks can be mitigated by comprehensive legal documentation and trust-based partnership.
Net, net, cloud computing can play a key role in improving the operational efficiency of the utilities and ensuring cost-effective operations. However, it could have serious repercussions such as breach of data privacy, and loss of useful and confidential information. Therefore, apart from identifying the best-suited cloud computing solutions to meet business objectives, utilities need to carefully formulate the terms of the contract with the cloud solution provider, and put checks and balances in place to prevent data damage and loss.
Based on a presentation by Ravikant Yadav, Senior Consultant, Business Consulting Services, Infosys