By Jesse Berst

The $11 billion, McLean, VA-based contractor provides a wide range of information technology services. It does about 90% of its business with the government and the balance with private industry. SAIC has decades of experience serving the defense industry. That gives it deep expertise in security, large databases and complex event processing. Although not as well-known as some of its competing systems integrators, SAIC also has a lot of energy and utility experience. For instance, SAIC manages a large swatch of Entergy's operations.

From start to finish

·         The meters

·         The communications system

·         Network management

·         Meter data management

·         Security

·         Utility and customer portals

·         Hooks into existing customer information systems

All of this and more for a set price per meter per month. Virtually all of the industry's major players – Accenture, Capgemini, General Electric, IBM– have managed services in the works. SAIC may be a bit ahead in selling a discrete package under its own brand name. SAIC is selling the service on its own today, but may later offer it via partners such as meter manufacturers.

Pros and cons of managed services

SAIC has built the system as a series of web services operated over an enterprise service bus. That makes it easy, in theory, for SAIC (or its partners or its customers) to add new modules as needed. In addition to this modular flexibility, a managed service approach claims several other advantages:

·         Avoiding big capital expenditures

·         Avoiding the need to find, hire and pay specialists

·         World-class security

·         Expert project management

On the downside, the utility loses some control. And, of course, investor-owned utilities (IOUs) lose the ability to put a big capital expense into their rate case. But even with IOUs, SAIC can theoretically build and operate the system as a managed service, then transfer ownership when the system is stable and fully operational.

Are managed services the future for municipals and co-ops? Use the comment form to explain why or why not.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.