- Utility Digitization
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The Future of Analytics in the Utilities Industry Lies in Strong Partnerships
The utilities industry presents some unique issues for analytics specialist SAS, as I witnessed during a recent analyst event. The industry is no stranger to large volumes of data or analytics, and as it undergoes a digital transformation, it should present a huge opportunity. However, the industry’s approach to the procurement of analytics means that there are few low hanging fruit, and SAS must work hard if it is to dominate utility-focused analytics.
In its favor, SAS is unquestionably a market leader and continues to remain one step ahead of its competition. It is investing heavily in four areas, all of which will resonate with utilities’ changing requirements:
- Platforms: In a similar vein to virtually every other enterprise data vendor, SAS is making a big bet on data platforms. While many will struggle to differentiate, SAS’ strength comes from its experience in data preparation, an area that many fail to discuss in detail. SAS’ strategy for its Viya product is to provide different types of user access to any type of data, from any source, using the most appropriate user interface.
- Harness artificial intelligence (AI) and machine learning: Over the last couple of years, during which AI hype has hit peak volume, SAS has been relatively conservative. It is focusing more on machine learning and the benefits of massive compute—how analysts can interface with SAS in new ways, on new devices, using the most up-to-date algorithms.
- Internet of Things (IoT). SAS wants companies to be smarter about their IoT data analytics. It discussed at length its partnership with Cisco—to embed SAS analytics within smart routers—which will take analytics to "the edge" much closer to the devices where the data is stored. It also promoted its event stream processing tool and announced the recent addition of Event Stream Manager.
- Cloud analytics: Finally, SAS is investing heavily in cloud-based analytics, which will be increasingly important for utilities as their digital journeys mature. It is also important to note that SAS wants to offer a flexible approach to where analytics is performed. Cloud is just one option, among on-premise, in-database, in-stream, or in Hadoop.
SAS has a market-leading set of analytics products, it is investing in all of the areas utilities would want, and is not shy about discussing the issue of data governance. These are all messages that should resonate well with utilities. But should it expect a rich harvest of low hanging fruit in the utility orchard? In short, no. The biggest barrier SAS will face is utilities’ historic approach to analytics procurement, which is heavily siloed and task-specific.
Future Opportunities Lie in Partnerships
Many of the future opportunities for analytics within utilities lie in operations, where SAS has not historically had a strength. Operations typically procure analytics for a specific task, from a vendor with deep knowledge of the technical issues, but lacking the robust analytics engine SAS brings.
The answer for SAS lies in partnerships. SAS will never compete with large engineering companies for industry knowledge; likewise, these companies will never compete with SAS in terms of analytic capability. Unsurprisingly, SAS has begun conversations with all the global engineering companies. However, these conversations are at an early stage. Digitization and analytics will help utilities address their most pressing concerns: to improve operational efficiency, maximize customer experience and develop new products. The market needs a robust analytics platforms and algorithms designed by industry specialists. The market needs these partnerships sooner rather than later.