Smart Grid Series, Part 3: Smart grid’s new world of partnerships
For telcos to play a vital role in the smart grid, they must embrace a new, collaborative world of partnerships
For telecom service providers to play an active role in the smart-grid market, they have to embrace partnerships – with new partners and existing partners working in new ways. Although there are some areas of overlap, service providers are actively seeking out partnerships with device makers like OpenPeak, systems integrators such as Alcatel-Lucent and Cisco, and other technology players specific to the grid, including SmartSynch, Current Group and Ambient and Itron.
Telecom and utility companies are no strangers to partnerships, and the two industries’ trajectories are actually quite reminiscent of each other, according to Shahid Ahmed, Accenture’s networks global lead. From a regulatory, technology and consumer-need standpoint, the breakup of big players and gradual breakdown of regulation, the spectrum options, the new entrants – the industries’ growth mirror one another and suggest partnership could benefit both.
“The telcos need to appreciate the utilities problems and not just say we have all the answers here, use our stuff,” Ahmed said. “On the other hand, the utilities need to open their eyes a bit and say well maybe we shouldn’t always just build it ourselves.”
As it is today, the market is wide open, and there is room for any company to capture a piece, but the two industries stand to learn a lot from one another in the process. Telecom service providers have the network knowledge and, in the case of partnerships, can not only provide maintenance and operating expertise, but also help the utilities manage the supply chain with vendors, Ahmed said.
Most operators are realizing that there are areas of the smart grid that are clearly of interest, but there are also areas that they should and will remain hands off. All of the big four – AT&T, Verizon, Sprint and T-Mobile – agreed they are not looking to get into the business of energy resell. Sprint isn’t looking to make any devices for the grid either, just to bring together the players that can, said Sprint’s national program manager for utilities Robert Gustin. Through its open device certification program on its iDEN network, it is working to “develop the ecosystem of all the devices that are needed for smart grid – everything from metering to gateway to routers, any kind of embedded based solution,” Gustin said. The telco is already engaged with four of the major meter manufacturers, several application and equipment providers to do distribution and automation and integrators and consultants including IBM, Accenture and Black and Veach, he said.
“They are absolutely partners, and we certainly understand that when you speak of smart grid, it’s a very complicated scenario of architectures, technologies, the integration of advanced IP, cyber-security, remote sensing technologies, multiple technologies and different wireless LAN technologies, both private and public,” Gustin said. “We provide a public solution, a component of that. It’s becoming increasingly evident that digital cellular technology is an increasing component in every utility’s needs in advanced telemetry and automation and voice as well. We don’t look at them as competition in any way shape or form. We look at many of them as partners.”
While Sprint does provide consulting services, Gustin said it is focusing on advising on the architecture, IT and standards side of the equation through its customer network solutions group more than anything. Like Sprint, Verizon Communications also already provides managed services to its utility customers and is approaching the market with an open mind. Mark Bartolomeo, Verizon’s vice president of enterprise data marketing, said that Verizon is also open to partnering with the companies that its utility customers already have relationships with, including systems integrators, which he sees as a large opportunity. On the other hand, Verizon will provide the systems integration services if its utility customer were to request that, he said.
“From the managed service perspective, we do have customers asking us to host and provide this information back to them,” Bartolomeo said. “So basically deploy the network, manage the network, collect the information and send the utility the information. So that is something we will do as a managed offering, and that’s something we do today in a number of large commercial accounts. We actually become part of the customers’ infrastructure management.”
WHAT PARTNERS MEAN FOR VENDORS
As the smart grid market shakes out, there are a number of vendors – those accustomed to working with network operators and those accustomed to working with utilities – seeking a role in the value chain. How the market flushes out will have a direct affect on the business of these vendors like OpenPeak, which sells to telcos and consumers across the globe. The company is behind the Verizon Hub, as well as an entire product line designed around telcos. Through a touch screen and an application shop, telcos can offer their customers access to real-time weather, news, sports and telephony features. The device also promises to add energy management to the equation – a feature that is attracting the interest of telcos and utilities alike, CEO and founder Dan Gittleman said.
OpenPeak is still drawing business from both telcos and utilities, but is waiting to see how the two end up working together and what that ultimately means for the end customer – and for business. “[Utilities] have to go into the house, and in all cases, our product lines we sell through channels are always subsidized – healthcare, telco, utilities – it’s a win-win for everyone,” Gittleman said. “If they can couple with telcos to do that fully subsidize it, it’s a win-win-win.”
Technology vendor and T-Mobile partner Echelon is completely open to the partnership model for two reasons, said Steve Nguyen, Echelon’s director of corporate marketing. One, Echelon does not have the demand expertise, T-Mobile does and, two, smart grids are no longer just about metering. Nguyen said the market requires multiple partners and also calls for an open data structure.
“It’s a very flexible data and control infrastructure, primarily monitoring and control,” Nguyen said. “There are a lot of professional services involved because you can do much more with it, such as reverse monitoring or net metering if your jurisdiction allows utilities to provide it. The trick for us was to make sure the data was there. All that kind of stuff is all the core information you need in the system, but then someone like a T-Mobile or Accenture or Oracle is going to be writing or managing it.”
DUKE ENERGY’S VIEW OF THE SMART GRID ECOSYSTEM
Third largest US utility and partner to Cisco, Ambient, Echelon and others Duke Energy has been a first mover in smart grids. The utility, which provides gas and electricity services across five states, is taking a holistic approach to the grid. In Ohio, it plans to launch a five-year mass deployment of smart grid technology, including more than 700,000 electric smart meters and 450,000 natural gas meters, before the year’s end. Duke Energy also reached a settlement in Indiana on its smart grid proposal, which includes plans for 800,000 smart meters. Outside of metering, the utility plans to install distribution automation hardware and software to improve the system’s efficiency and reliability in Indiana and Ohio, and is also working on a plan for its customers in North Carolina, South Carolina and Kentucky.
“Our ultimate goal is as we begin to deploy this is to build the network that is open, interoperable and creates a foundation that a number of devices connect to,” said Todd Arnold, senior vice president for smart grid and customer systems at Duke Energy. Achieving this goal will cost Duke Energy more than $1 billion over the next five years, he said. It will also require the utility to work with a number of different partners – including telcos for the network aspect– to build an open end-to-end architecture that is highly interoperable, Arnold said.
“Generally, our view is that today there is not one solution that will work everywhere,” Arnold said, adding that Duke is in the process of working with a major wireless provider. “As we roll this out, there will need to be a portfolio of ways you connect to various communication alternatives. We prefer, where we can, to do that on commercially available networks. As we look at how we design that architecture and how we connect, we try to look at a communication network with the ability to have multiple ways to connect and change that connection as alternatives may evolve.”
Next: How standards will shape the market
Want to use this article? Click here for options!
© 2013 Penton Media Inc.
In this Webinar you will learn how to create a real-time relationship with your customers, how to proactively improve the customer experience, and how to successfully target and cross-sell services to boost incremental revenue.
- Megabytes to Megabucks, Bandwidth to Business Models: How 4G Is Changing Everything
- How to Unplug Your Redundant Telco Apps To Save Money and Improve Efficiency
- When IaaS Isn't Enough: Service Provider Business Models to Drive Growth and Build Margin
- How to Transform Your Aging Telco Voice Network to Drive New Profits and Revenue
- Creative Licensing Approaches for Telcos & Their Network Equipment Vendors
- Smart Home Opportunity: Balancing Customer Data & Privacy
This paper discusses the rise of Diameter and benefits of Diameter Protocol.
- Conducting The Orchestration – Order Management at the Speed of Business
- Toward a Converged Network Edge
- Beyond Spam – Email Security in the Age of Blended Threats
- 6 Important Steps to Evaluating a Web Filtering Solution
- The Expertise to Protect You from Botnet and DDoS Attacks
- Seeing is Believing – Bridging the Order Visibility Gap
Service providers are under tremendous pressure to turn up new services faster then before and, at the same time,
to do it at less expense - and intra-office fiber is one of the biggest challenges in terms of both cost and service
From the Blog
Join the Discussion
Get more out of Connected Planet by visiting our related resources below:
Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.Subscribe Now