In its report, GTM Research stated that the maturity of analytic adoption by utility companies – particularly with predictive analytics, performance management and customer personalization – will prompt a “complete reinvention” of their modes of business. With a steady increase over this decade, the report forecasts increases in analytics spending by the worldwide utility industry to the tune of $3.8 billion in 2020 alone. That big spending comes with the expectation of a big payoff, as GTM indicates utility analytics ROI will reach $121.8 billion compounded between this year and 2020.
Figure 1: Global Utility Analytics Spending, 2012-2012
Source: GTM Research
Dubbing this new wave of utility analytics the “Soft Grid” in its new report, GTM Chief Smart Grid Analyst David J. Leeds wrote that the emergence of enterprise-level predictive analytics and big data capabilities have moved the utility IT spotlight onto “software that will allow utilities to track, visualize and predict.” On the solutions side, growth is being driven by open source big data frameworks like Hadoop, massively parallel processing appliances and the development of better predictive analytics. There is also the benefit of cheaper and scalable storage, processing and infrastructure, according to GTM. Specifically, Leeds wrote that real-time analytics opens the door for “live looks” at grid simulations, as well as clearer optimization on crisis or theft incidents, and integration of customer usage and even related social media data.
These tech innovations are coinciding with investment in more efficient and “green” plans that are part of a new generation of upgrades in line for the power industry, which is already saddled with massive amounts of data from an increasing range of sources. The report industry assessment noted the number of hardware and software pilots that are ready for full roll-outs in the coming years.
GTM estimates that the U.S. will carry the “lion’s share” of utility analytics investment through 2020, accounting for approximately 45 percent of all spending.
In its analysis, GTM surveyed plans and responses from approximately 60 utility providers and utility analytics software vendors.
This is the second report in recent months that presented massive upgrades and investments with business analytics in the utility marketplace.
Justin Kern is senior editor at Information Management and can be reached at justin.kern@sourcemedia.com. Follow him on Twitter at @IMJustinKern.
