Navigating in a Channel-Less World

August 10, 2011 at 9:18 pm Leave a comment

Is The Utility Market Ready for SmartGrid Technology?

Diane Krakora – CEO, Amazon Consulting

While I’m no expert on marriage, I do know the difficulty in answering the age-old question, how old should you be to get married? History tells us that getting married too young can be a brutal mistake because couples who marry in their late teens and early 20s don’t quite know themselves yet, and they run the risk of growing in different directions. Some experts say that people who get married for the first time in their 40s and 50s are also a high risk because they are too set in their ways and lack the flexibility needed to make a marriage partnership work.

So, the question is, “Is the Vendor community ready to form partnerships to successfully deploy SmartGrid technology into the utility market? Or, is the utility market mature enough to support a channel for SmartGrid technology? Regardless of which way you look at it, the successful deployment of technology comes with a channel that is built in the right time.

Last month, we published some new research on SmartGrid technology and polled both utility companies and vendors on the likelihood of partnerships being formed to deploy this innovation into the utility market. We looked at the needs of 50 utility companies, their expectations and the ability of 30 vendor respondents to meet those needs.

In a nutshell, vendors are having a challenge supporting the high service requirements and complex needs of utility companies such as design, consulting, technology selection and deployment. They are trying to find their way in the pitch dark. Vendors are single-handedly trying to create a shot-gun approach to an antique market, one that has been very set in its processes – including climbing actual poles to collect data to bill the customer. SmartGrid changes all of that.

There are, however, many barriers to adoption. The market is widely regulated and utility companies don’t have extra funding to invest in new technology. On the vendor side, there is an eagerness to want to find a channel of solution providers to help serve the market, but it currently doesn’t exist and the vendors don’t have the know-how to build it.

Despite these roadblocks, IT spending is predicted to grow over the next several years for the U.S. utilities market as organizations move into the next phase of planning and implementation of the SmartGrid. But in order to speed the adoption, the gap needs to close between what the utilities require and expect and how these requirements can be successfully implemented by the vendor community. Vendors need to understand the challenges the utilities are trying to solve with SmartGrid technology. Selling models to reach potential SmartGrid customers and how to engage and empower to recommend, sell, install and manage SmartGrid solutions.

Advancements such as Demand Response, which allows companies to shift the Grid of power depending on the time of the demand, are beginning to be used. A channel of resellers or trusted advisors is the missing piece to speeding the adoption of SmartGrid.

Given the current state of this market, it seems that vendors would be best to focus on forming alliances to deploy this technology. Maybe they just need to stick to dating for awhile and allow the market to mature and ripen a bit before relying on a traditional channel. Like in most relationships, there’s gotta be give and take.

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Entry filed under: Industry Perspective. Tags: , , , , , .

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