While they represent a small part of the smart grid market today, SGaaS solutions allow utilities with financial constraints to spread project costs over several years, and can provide skilled IT professionals to utilities that may otherwise have difficulty attracting talent.
Growth in this segment over the next 10 years is expected to be strong, as utilities with limited budgets find managed services to be a cost-effective and manageable alternative for their smart grid initiatives.
“Traditionally, utilities have shied away from outsourcing operations beyond back-office functions like billing or payroll,” says Richelle Elberg, senior research analyst with Navigant Research. “But the tremendous growth in cloud-based services for business of all types has increased utilities’ awareness of and comfort levels with cloud-based solutions.”
Besides the most obvious factor of cost, SGaaS offers several potential advantages over conventional, in-house smart grid deployments, according to the report, including reduced time to market and improved security. Cloud computing has advanced to such a degree that the security employed by third-party vendors may be stronger than what a utility can implement internally.