Rising Relevance

Cloud computing helps power utilities in storing and accessing data

Cloud computing is witnessing growing uptake across enterprises in various sectors. In simplest terms, cloud computing refers to storing and accessing data and programmes on remote servers hosted on the internet instead of on hard drives of personal computers (PCs). Cloud computing services entail the delivery of on-demand computing resources including applications and data centres over the internet on a pay-per-use basis.

One of the biggest benefits of cloud computing is the reduced cost to enterprises. Cloud computing can reduce both capital and operating costs because resources are only acquired when needed and only paid for when used. Another key advantage is that cloud computing leads to the optimal use of personnel. This helps them manage their time effectively to focus on delivering value rather than maintaining hardware and software.

Besides, cloud computing services offer robust scalability. Cloud computing essentially allows for immediate scaling, either up or down, at any time without long-term commitment.

Classification of cloud services

There are three broad categories of cloud-based services – software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS).

Under the SaaS model, vendors typically provide software and databases to clients. Examples of SaaS providers include Google, Webex, IBM and LotusLive. The PaaS model provides a computing platform which usually includes the operating system, database and web server. Users can develop their own products utilising these services. Examples of PaaS providers include Windows Azure and Salesforce.

IaaS is the most basic cloud service offering, which includes virtual machines, servers, storage and active network components. Examples of IaaS providers include Amazon Web Services, IBM and VMware. Further, cloud computing services can be classified as private, public or hybrid depending on business needs.

Meanwhile, private cloud is an environment that is operated solely for a single organisation, whether managed internally or by a third party, and hosted internally or externally. In contrast, a public cloud is an environment that renders the services over a network that is open for the public. A hybrid cloud is a composition of public and private clouds. This offers the benefits of both deployment models and an environment that renders the services over a network that is open for the public.

Key concerns

Despite several advantages, there are a few impediments to the adoption of cloud services. The lack of direct control is one of them. With data hosted by a cloud provider and not on the company’s premises, enterprises often feel that data is more vulnerable to threats. Another negative perception about cloud computing is related to security. Enterprises feel that data hosted in a cloud environment, especially public clouds, is unsecured.

Further, unpredictable pricing is a cause of concern for many companies considering cloud computing. Since many cloud providers operate on a utility pricing model, customers are charged on a usage basis similar to cellphones or electricity. Also, data lock-in is a key issue. Once a firm commits to a cloud computing service provider, it is bound to stay with the same provider. The viability and reliability of the service provider is a matter of concern for many enterprises. In addition, control on software changes and updates made by the service provider are a little unpredictable.

Cloud solutions for utilities

Power utilities are ideal customers for cloud computing based on their intermittent, high resource requirements. For instance, advanced metering infrastructure, analytics and customer care applications have high resource requirements, while metering, billing and collection applications have medium resource requirement, and applications related to connection management, work and asset management have low resource requirements.

Distribution utilities need best-in-class business solutions to improve their returns on investment. They need to focus on their core business, that is, network operations, and IT is an important enabler for them. However, utilities should spend capex on network improvement rather than on IT functions. The overall business value to utilities does not just come by providing IT systems but also through additional business insights. These insights include performance monitoring and alerts; business insights through analytics; cost-effective, yet efficient, operations of IT systems; and the ability to support solution extensibility and scalability.

The way forward

Cloud computing is the way forward for enterprises across the world. As per industry estimates, 60 per cent of all IT workloads will reside on the cloud in the next three to four years. While around 25 per cent of enterprises already have a strategy to switch to the cloud, about 69 per cent of them have already invested in private clouds and another 40 per cent have invested in public or hybrid clouds.

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