Insights

Do you need the cloud for successful analytics?

It depends on what analytics you're looking at

Last week, we covered one of the many analytics hot topics: analytics personnel. Thanks for the great feedback about the topic. Now, we're diving off into deeper research about analytics personnel for our next Utility Analytics Institute report. This week, we're switching gears and tackling another hot topic brought up by readers: What role does cloud computing play in data analytics? A reader wrote in to ask: "Big data costs in the cloud would be much lower, but what would be the cloud concerns of the utilities? Security? We've been told utilities are too conservative to use cloud solutions for their core services."

What do you think? Should cloud services play a significant role in data and analytics work for utilities -- particularly for their core services?

To get the discussion rolling, we've found from our conversations with utilities that it all depends on the data and analytics we're talking about, as well as the types of clouds we're looking at. And no, meteorology nerds -- myself included -- I'm not talking about the difference between cumulus and stratocumulus clouds. Here are a couple considerations:

Public versus private clouds. Cloud computing is essentially delivering computing resources -- things like software and hardware -- as a service over a network. The cloud, at least for me, conjures up images of more public or community-focused clouds that are generally available to many users via the Internet. However, not all clouds are the same. Public along with private clouds -- those clouds on networks internal to a company -- need to be considered when looking at data and analytics for utilities. In fact, the public versus private cloud discussion -- and how it collides with analytics -- came up at our Utility Analytics Week event in September. At the event, we found a consensus that private clouds are the way to go for most utility analytics for control and security reasons. However, public clouds can still have a place, but it depends on the data and analytics that utilities are working with.

Types of data and analytics. The types of data and analytics that utilities are using can influence whether a cloud is needed, and what form it takes. For example, does data need to be available for just a few folks within a utility company? Or will many people be accessing the data? What analytics will interact with consumers? Are we looking at grid analytics or customer analytics?

As a result, utilities are using cloud computing as it makes sense for different parts of the analytics process. For example, we are seeing an uptick in cloud usage at utilities to address the needs of blending traditional data sources with outside resources, and presenting the information to various users. With one utility, for example, the core of its data came from the utility's customer information and financial systems. It combined that information with several external data sources through both automated and manual processes. The resulting relational data was then being presented to many users via a cloud-hosted web interface.

We're also seeing solution providers stepping up their offerings for cloud services for a variety of data and analytics areas. For example, in our research over the past year, we learned that about 80 percent of customer analytics solution providers offered some sort of software as a service (SaaS) or outsourced solution. That number is about 60 percent for grid analytics solution providers.

Thanks to our readers for another great question, and please keep them coming. Cloud computing is certainly evolving in the analytics space, and we'll continue to track and discuss it. We'll also add cloud computing to the hopper for future research, but in the meantime don't hesitate to contact me with any questions or comments you may have about the cloud topic -- even if it is of the meteorological variety. Also, if you have a question you'd like to pose to the thousands of utility analytics professionals who read us each week, please send it to me, and you might just see it in the next Utility Analytics Weekly.

As always, thanks for reading.

H. Christine Richards is the director of knowledge services for the Utility Analytics Institute, a division of Energy Central. You may reach her at crichards@energycentral.com.