Special Feature
Part of a ZDNet Special Feature: The Industry Cloud: Why It's Next

How the energy sector is using the industry cloud

Learn how the energy sector uses cloud services and which cloud providers are most popular for this vertical.

This is how IBM Cloud is wooing the energy and utility sector SaaS provider Smart Energy Water has signed a multi-million dollar, five-year deal with IBM after beginning its cloud journey elsewhere

Special Feature

Special Report: Industry Cloud (free PDF)

This ebook, based on the latest ZDNet / TechRepublic special feature, looks at how the industry cloud has taken off and big businesses have been built by the likes of Veeva, Rootstock and others.

Read More

Industry cloud focuses on vertical solutions and integration, offering highly customized solutions to help businesses with various aspects of their operations including legal, regulatory, security, and more. To better understand industry cloud's role in the energy sector, it's important to consider the ways it is being used, the pros and cons of adoption, and which cloud providers are most frequently used.

SEE: How to build a successful career as a cloud engineer (free PDF) (TechRepublic)

Ways the energy sector uses the industry cloud

Industry cloud has various applications within the energy sector, though it's most commonly used for customer relationship management (CRM), providing real-time data, and hosting software. 

Regarding CRM, Kelly James, vice president and general manager of energy and utilities at industry cloud software company Vlocity, explains, "There is a massive opportunity to redefine and transform the relationship between customers and utility companies. Partnerships and collaboration are going to be key in how we look at the challenges of creating differentiated ways of working, harnessing the changing energy landscape, addressing increasing customer centricity, innovation, digitalization, and operational excellence."

James continues: "In the face of rapidly rising customer expectations and disruptive technologies, utility company CIOs and CCOs are asking themselves questions such as: 'How do I exceed customer expectations while keeping pace with disruptive industry change?' 'Can I transform my customer experience without the risks that come with multi-vendor integration and with major changes to my CIS and billing systems?' 'How can I bring new offers and products to market while ensuring core meter to cash processes remain stable?'" 

To address these and other challenges of a rapidly growing market, many energy companies are turning to the industry cloud because it provides a way to improve CRM and allows a digital transformation strategy to be put into place. According to Vlocity, "There aren't many [in the energy sector] that we know of doing industry cloud. Most are [using] on-premises software. Having a solution designed specifically for the industry -- one that delivers value today and can flex and scale for tomorrow -- will allow for continual growth, agility, and differentiation, and the path to a bright future."

The industry cloud is also being used to provide real-time data about energy consumption. In an Integrated Environmental Solutions article, IES Media & Communications Manager Suzanne Wallace writes: "One of the biggest factors in the role the cloud has across the energy sector is its ability to provide real-time data. This allows citizens and businesses to ensure they use energy in the right place, at the right time, and that they pay the right price." 

This is echoed by Maryanne Steidinger, head of marketing at Webalo, who notes the role the cloud plays in hosting software. "The cloud is used in the energy industry for, among other things, hosting software applications that the energy companies can use to gather real-time data for analysis, maintenance, and productivity," she says. 

Steidinger also explains, "For companies that have multiple locations, or even have geographically dispersed plants, the IT infrastructure costs of maintaining these disperse applications becomes much more cost effective by hosting on a cloud -- either in-house on premises or external to the company, 'off premises'."   

Pros and cons of using the industry cloud in the energy sector

Adoption of any industry-based technology has potential advantages and disadvantages. Will Whatton, senior manager of digital transformation and management at the accounting and advisory organization Grant Thornton LLP, outlines some of the pros of using the industry cloud in the energy sector. Whatton states that the benefits of adoption include increased security, reduced complexity, and cost savings.  

According to Whatton, "enterprise cloud computing service providers employ large teams of professionals dedicated to the security and protection of their platform. These companies invest significantly more dollars into their infrastructure versus what an individual customer could invest." 

Whatton continues, "from a complexity perspective, the migration to the cloud is also helping offset compliance and support needs for many public companies, reducing their internal time and effort focused on SOX or other types of compliance requirements."

"From a cost perspective, customers are not only saving on the capital cost of servers and hardware, but also the soft cost of not requiring a team of network/server engineers to support their IT infrastructure," Whatton explains. "These costs are often shifted to data analytics or data scientists to leverage the almost immediate increase in data."

SEE: Vendor comparison: Microsoft Azure, Amazon AWS, and Google Cloud (TechRepublic Premium)

Disadvantages to cloud computing tend to deal more with cultural adaptation. As explained by Vlocity: "You have to make sure your executive team, your IT team, etcetera, are brought into the change and that they know how best to make the change. You can't move away from being the energy company you are. You may need to move as quickly as Amazon or Uber, but the specific customer needs are very different." 

Vlocity suggests that energy companies give customers more choice and to "help them make decisions on energy-efficient appliances and know which customers have them. But don't try to be a retailer or gig economy company. These are lifetime customers in most cases, after all."

Top cloud providers in the energy sector

It may come as no surprise that Microsoft Azure, Amazon Web Services (AWS), and Google Cloud Platform are the top cloud providers in the energy sector. A recent report (PDF) by network analytics company Kentik surveyed 388 executive and technical respondents at Cisco Live 2019 and found that the majority (59%) of the energy sector uses Azure, while 44% use AWS, and 11% use Google Cloud.

The Kentik survey also found that, while 41% of the energy sector only use one cloud, 33% use two cloud providers, indicating that the sector is increasingly making the move to multicloud.

According to Vlocity, Salesforce also provides CRM for several industries, including the energy sector. More specifically, Vlocity partners with Salesforce to "bring industry-specific SaaS software for CRM and customer experience to our customers. Energy is one of our six verticals."

Also see