One of the biggest IT trends is cloud computing. With today’s disruptive digitalization, exploding data volumes, increasing regulatory demands, changing consumer behavior, and critical environmental and sustainability trends, only the cloud can keep up.

Utilities will not be spared  

Surrounded by the same disruptions, it’s only a matter of time before the utility sector is radically reinvented. Utilities have already changed more in the past ten years than the past 100, and the digital revolution is only just beginning. The next generation of utilities will be digital. To accommodate this, IT solutions are increasingly moving from traditional on-premise data centers to cloud-based systems. Why? Because cloud-based solutions make cost savings possible at the same time as they improve business operations. 

Read also our guide to efficient power grid operations for the digital age. 

What is the cloud?

Explained simply, cloud solutions are scalable services that allow you to store and access data and software over the internet. Joseph Sirosh, Corporate Vice President Data Platform in Microsoft, has defined the effect of cloud solutions as follows:

“The cloud turns hardware into software, it turns software into services, and it can turn data into intelligence.”

According to Oracle, 45 % of utilities are already using the cloud, while 52 % plan to use the cloud. There are good reasons for utilities to do this: 

• Cloud services enable utilities to build scalable services and quickly adapt to a market about to generate massive amounts of data
• Cloud services are cheaper than traditional on-premise IT solutions
• It allows you to pay only for the processing power and the amount of stored information you actually need 

However, to successfully implement cloud computing into your operations, several things must be in place. 

1. Choose the right service model

There are multiple ways to be in the cloud. If you are considering moving to the cloud, you need to understand the fundamental differences between the core categories of the available cloud services. 

Cloud computing can be roughly divided into three categories. To clarify their differences, we can use pizza as an analogy.

Infrastructure as a Service (IaaS)

With a traditional on-premise solution, you operate and maintain your own computers. This can be compared to a homemade pizza where you buy all the ingredients and cook everything yourself. Infrastructure as a Service, on the other hand, is more akin to buying pre-made pizza dough and cooking the rest at home.

More technically speaking, IaaS allows you to rent an operational environment in the cloud. However, you are still responsible for the operations and maintenance of the hardware you rent. The systems you run would be the same as the ones in an on-premise operations center but without the need for a separate local server room. 

Platform as a Service (PaaS)

With this solution, you buy a service model, such as a database, that the cloud supplier operates. This means you can take advantage of services without wasting resources on operations and maintenance. Platform as a Service may be compared to ordering takeaway pizza.

Microsoft, for instance, is among the suppliers that have cultivated this model. They offer anything from storage to a framework for machine learning, as a service.

Software as a Service (SaaS)

With a SaaS-service, you do not have to think about anything. You only consume a service delivered by a supplier. This can be compared to eating out at a pizza restaurant. Dropbox is an example of a relatively simple SaaS.

2. Choose the right deployment model

Cloud services can be delivered in several different ways. The National Institute of Standards and Technology defines the various deployment models as follows: 

• Public cloud: This type of cloud infrastructure is provisioned for open use by the general public, and exists on the premises of the cloud provider.
• Private cloud: This model is a closed cloud solution provisioned for exclusive use by a single organization comprising multiple consumers, and may exist on- or off-premise.
• Community cloud: This infrastructure is closely related to the private cloud, as it is provisioned for exclusive use by a community of consumers from organizations. As the private cloud, it may exist on- or off-premise.
• Hybrid cloud: This model is a combination of two or more distinct cloud infrastructures (public, private or community), bound together by standardized or proprietary technology that enables data and application portability.

Hybrid cloud is the most used deployment model, as it allows users to utilize the advantages of both public and private clouds. What solution you should choose, however, depends on what your organization needs.

3. Take security and risk factors into consideration

An old and outdated belief is that on-premise, traditional IT security is safer than cloud-based systems. This is wrong. The location of a server has no impact on how secure it is. If your server is connected to the outside world, it is vulnerable to security threats.

According to Accenture, security is diminishing as the prime concern around cloud adoption, not only in utilities but across industries. However, as Accenture also points out, utility companies should consider several core security areas when moving towards cloud-based solutions:

• Next generation identity and access management
• Security information and event management
• Security analytics, visualization and proactive security
• Active Defense – Incident response and forensics

4. Manage data privacy

We are entering an era where massive amounts of data are generated in a short amount of time. Storing data and applications in the cloud reduces the need for large data centers and is ideal for business operations, but entails certain privacy concerns.

As Deloitte points out in their document “Data privacy in the cloud: Navigating the new privacy regime in a cloud environment”, there is no single answer to the privacy challenges raised by cloud computing. However, they present three steps you can take to protect data stored in the cloud:

• Understand and comply with various jurisdictional privacy laws
• Understand how your cloud provider will protect your data
• Explore different encryption technologies and tools

5. Upgrade to modern standards

A modern cloud-based system will allow you to take advantage of all modern technologies, including Big Data and analysis solutions designed for the Internet of Things-world we are moving towards. It will not help if you move existing, old systems to the cloud. This will not make the system modern. It is still the same old solution. This is an important distinction. Even if you buy a cloud-based service, it does not mean it is modern unless it is scalable, devoid of any legacy architecture, designed for Big Data and advanced analytics, and is properly secured.