Microsoft smart grid strategy: partnering to lead utilities to the cloud


By: Jesse Berst


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I already told you how Microsoft missed a $1 billion opportunity to take an early lead in the smart grid. And how Cisco has stepped in to start building the grid's first operating system. I recently spent time at the Microsoft Executive Briefing Center in Redmond to see where things stand now. I walked away with a much clearer view of Microsoft's smart grid strengths and weaknesses and of its vision for the Utility of the Future.


Microsoft smart grid strengths


Building partner networks. Microsoft knows better than anyone how to create the programs and tools to empower a global network of value-added partners. Even though it is playing catch-up, Microsoft could eventually end up with more "apps” in its "apps store” thanks to its partners.


Smart Energy Reference Architecture. Microsoft’s SERA is a thorough and comprehensive technical roadmap to a future-friendly IT infrastructure. In addition to its technical sophistication, I appreciate its migration model, which shows how utilities can move over time towards the ultimate system. And I appreciate that it starts with the vision of an entire smart energy ecosystem. Download a copy of SERA and see for yourself.


Standards. Microsoft was slow to get fully engaged in the smart grid. But now that it has the sector in its crosshairs, Microsoft has a lot of experience it can bring to bear. For instance, only Cisco is at the same level when it comes to shaping standards behind the scenes and integrating them quickly once they appear.


Security. Over the past 15 years, Microsoft has learned a lot about keeping systems safe and secure in the Internet era. In fact, it has donated its excellent Secure Software Development Lifecycle to NIST, where it is already having an impact on security standards and security implementations. (See what I mean about influencing the standards process?)


Microsoft smart grid weaknesses


Strategic consulting. Some of Microsoft's competitors are literally helping utilities rethink and remake their business models. Others are helping utilities redo their business processes from top to bottom. Microsoft does not have this level of strategic consulting in its portfolio.


Industry presence. Microsoft was late to join the industry associations that pioneered the smart grid. The resulting lack of "presence” has hurt them in an industry that measures the life of assets and relationships in decades, not years.


Sales access. You can argue that Microsoft offers its partners the world’s best developer tools and training. But you cannot make the same claim of its ability to get partners in front of utilities. In the electric industry, it is often systems integrators or consulting engineers who create the "short list” of preferred providers.


Utility of the Future


Utility professionals are pretty savvy when evaluating technology partners. They know it is not just about "what can you do for me today?” It’s also about "where can you take me tomorrow?” Microsoft believes tomorrow will be about systems integration and information access. Microsoft clearly has the technical savvy to create an integrating platform. And it also has many tools to provide easier access to the resulting information.


Like so many other tech companies, Microsoft would like to see utility applications migrate to the cloud. I personally believe cloud computing will be essential to creating a cost-efficient IT platform for utilities. But most utilities are not yet ready to take that leap. They are still struggling to move from a collection of siloed, individual applications to an integrated enterprise architecture. Once an enterprise architecture is in place, it can slash the costs of ongoing operations. Moving applications to the cloud can reduce costs even further... but that’s a step many utilities are not yet ready to test.


I believe the Utility of the Future will also need access to a wide selection of applications from a wide selection of solution providers. Here again Microsoft has a good story with its emphasis on a smart energy ecosystem and its global network of partners. In the smart phone world, it is less and less about the phone and more and more about the apps you can run on it. The utility world will make a similar transition. Now Microsoft must race IBM and others to see who can assemble the best collection of applications.


Microsoft does not offer the strategic consulting that has made organizations such as IBM, Accenture and (most recently) Cisco a staple in utility executive boardrooms. But if you drop down a level to technology strategy, Microsoft has an important role. In fact, I believe Microsoft's Smart Energy Reference Architecture and its Secure Software Development Lifecycle should be required reading for every utility IT department, regardless of whether that department intends to base its architecture on Microsoft technology.


Microsoft may not be the company to help you craft your overall vision. But once that vision is in place, it has a strong combination of platform and partners to help you get there.


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