If you attended the Cloud for Utilities Summit in Washington, D.C. last November, I think you’ll agree it was an enlightening experience. Vertex is proud to have been one of the founding technology sponsors of this first-of-its-kind event, dedicated solely to the utilities industry.
The summit was definitely not the “same old marketing and lead generation event” as many other conferences and events. Instead, this one brought together utility companies, and technology and service providers with industry and tech experts for some candid discussions. The result? A great meeting of the minds featuring thought leadership and expertise around the cloud and it’s impact to utilities.
Being able to participate in a thought leadership summit and talk about technology’s impact on utilities was refreshing, and listening to utility companies perspective on cloud technology specifically even more so - something you don’t find very often.
There were a couple of pressing issues around cloud adoption that stood out. The first was the perception that cloud technologies cannot be capitalized. The second, as you might guess, is that the cloud is not secure. Neither of those issues is new. We’ve explored the capitalization issue and cloud security concerns before, because they are real issues.
At Cloud for Utilities, expert regulators and security experts spoke directly to these points and others. And that’s when I realized that the conversation has indeed turned. The experts did more than just try to dispel the myths around these cloud topics. They opened attendees’ eyes to collaborating as an industry and to look for new ways of solving the challenges to adoption.
Capitalizing the cloud: Is it possible or isn’t it?
While utilities have at last started adopting the cloud, it’s mostly around peripheral applications, rather than mission-critical ones like a utility CIS. One of the reasons for this is the historic way utilities have looked to capitalize these systems and include the costs in the rate base.
Back in late 2016, the National Association of Regulatory Utility Commissioners (NARUC) suggested regulators consider loosening this standard to accommodate cloud computing assets. The various regulators everywhere haven’t exactly stampeded to do so. So, we’re still trying to solve the same age-old problem as before. CIS implementations traditionally have been long, risky and expensive, and with a deployment and support model requiring a Utility to become technology experts in order to minimize the operational costs to maintain it. Moving to a cloud solution would eliminate the larger CAPEX and smaller OPEX costs, or so it is perceived. If the cloud’s involved, how do we do that? NARUC’s suggestion isn’t enough.
D.C. Commissioner Willie Parker spoke about his role as a regulator and how regulators across the country have different understandings of technology’s impact on the industry. But when asked how do we get them to actually relent and allow utilities to capitalize cloud infrastructure, he offered some creative solutions. He provided talking points for working with regulators to educate them as we are being educated ourselves. Maybe it’s time to create a new kind of asset, a technology asset, that is capitalized very differently than traditional assets.
But that won’t happen unless we all work together to make it happen, utilities, regulators, technology and service providers and consultants.
Securing the cloud: What’s the remaining problem?
Similarly, the conversation around cloud security has turned. We now accept that reputable providers have more talent and resources to protect their cloud infrastructures than individual companies can provide for themselves. After all, it’s their whole business. Yet, there is far more danger lurking in cyberspace than most utility companies are aware of.
The summit brought in experts like Chad Sweet, co-founder and CEO of the Chertoff Group, to talk about the latest in cyber security and the cloud. And what he said was more than enough to scare everyone in the audience into the reality of the world we now live in.
Sweet urged utilitites to “come out of our little bubble” and look at security from a Department of Defense perspective. And unless we each are doing everything to protect ourselves that our government is doing, we’d better take a hard look at our IT departments. There are far too many tools to deal with, if you’re going to try handling it on your own. And it’s only going to get harder to keep up, so you may as well leave it to the professionals.
It was a sobering message, but it‘s really what we at Vertex have been trying to educate the industry about for the last several years. It’s no longer a question of whether the cloud can provide as good or better security than an on-premise infrastructure—it can. Once again, the conversation has turned. Now it’s shifted to the hard questions you should be asking your providers during your selection process.
Focusing on the true value: One more conversation to turn
One more big topic, but the same takeaway. There still seems to be confusion around the difference between the cloud, software-as-a-service (SaaS), enterprise SaaS, managed hosting and so on. And it doesn’t help that the technology and service providers can’t agree. During a panel discussion that I was part of, a heavy-duty technical discussion about what constitutes a true, native cloud application became the topic of debate. As I noticed the audiences eyes glaze over with the boredom of the debate, I chimed into my microphone, “Is that what we really care about here?” In my experience, the problem we are trying to overcome is utilizing current technologies to solve an overwhelming issue we have seen in Utility CIS implementations for over 20 years. They are long, difficult, risky and expensive and when we as providers finally finish up, we head off to do the next one leaving the Utility struggling to maintain the technology and keep it current for the next 10-20 years.
I saw head nods in the audience and knew I was on the right track. Because, when it comes right down to it, what matters is whether you are getting your needs met, right now, right where the utility is and right where the regulators in their adoption.
I'm not saying it's not important to understand how your enterprise apps are constructed. It is. But whether it’s native cloud, or native SaaS or true SaaS or whatever other words as technologists we want to try to baffle you with - shouldn’t really be the issue. What’s important is the value utilities and their customers get out of it. That’s why, a year ago we predicted value would be the reason more utilities moved to the cloud. It’s why I make the same prediction for 2018.
Perhaps that’s the most important conversation that needs to be turned, and Vertex is happy to lead the way.
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