Industry moving to smart metering-as-a-service, says Northeast Group
July 10, 2018
The global revenue from smart metering-as-a-service is set to top $1bn by 2027 as the industry evolves to a more subscription-based business model, a trend seen in many other industries, according to Northeast Group.
This has significant benefits for electricity, water and gas utilities, customers and vendors, says the report. The outsourcing by utilities of smart metering operations, known as managed services, or smart metering-as-a-service (SMaaS), will see annual revenue grow from $199m in 2018 to $1.03bn by 2027.
"The gradual shift to service-based smart meter operations is now accelerating," said Ben Gardner, president of Washington-based Northeast Group. "Utilities are seeing the benefits of turning to the managed services model, especially as regulatory barriers are overcome and advantages surrounding cost, security and time to market are proven."
Vendors are meeting the growing demand with new and innovative service-based offerings. These range from basic software-as-a-service (SaaS) to sophisticated infrastructure-as-a-service (IaaS) models, where third parties own and lease metering hardware.
IaaS is offered by a handful of metering vendors including Itron, Honeywell and Sensus. Other service offerings are available from Aclara, Badger Meter, Siemens, Trilliant and a host of others. These utility sector vendors are joined by tech giants such as Microsoft Azure and Amazon Web Services for the accompanying cloud. Professional services providers such as Accenture, Atos, Capgemini, EY, IBM and Leidos are also active in the SMaaS market.
Countries with fragmented electricity markets and smaller utilities – including the USA, Germany, South Africa, Austria, New Zealand and Norway – are among the most likely growth markets for managed services. Utilities with a preference for turnkey offerings, such as those in the Mena region or emerging market utilities with limited smart metering knowhow, will also drive the global SMaaS market.
Data security is a barrier and a driver to increasing adoption. Some utilities are still reluctant to hand over control to a third party whereas others see the clear benefit that the likes of Microsoft and Amazon can provide regarding data security. Furthermore, many regulatory structures need revision so that the accounting treatment of service-based offerings is equitable.