The Impact of IoT on Utility Customer Systems: Inside Out and Outside In
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1 The Impact of IoT on Utility Customer Systems: Inside Out and Outside In CSWeek 40 Chet Geschickter, Research Director Zarko Sumic, VP and Distinguished Analyst Gartner Energy & Utilities Industries Research 2016 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."
2 21 Billion Connected Things by 2020 Education 184M Transportation 264M Home Security 1.7B Security 760M Vertical-Specific 2.9B General Business 4.4B Consumer 13.5B Safety 70M Infotainment 4.8B Retail/Wholesale 418M Automation 1.6B Health/Fitness 1.4B Utilities 777M Energy 2.6B Government 434M Information 92M Healthcare Providers 167M Manufacturing 526M Home Energy 1.7B Agriculture 298M Home Automation 3.5B 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 1
3 The Internet of Things Is the Accelerant of Digital Business Billion Personal Devices 0.9 Billion Internet Connected Things Billion Personal Devices 21 Billion Internet Connected Things. Things Connected to the Internet Will Outnumber People by at Least 3 to Gartner, Inc. and/or its affiliates. All rights reserved. 2
4 Smart Things in Smart Homes Will Create Digital Business Growth Opportunities By 2020, up to 400 Internet-connected things in the home 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 3
5 Things Will Become Your Customers? Are you Ready? 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 4
6 Key Issues 1.What is IoT and Why it Should Matter to You 2. IoT Opportunities in Utility Customer Service Area 3. How to Deploy IoT Without Making a Mess 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
7 Gartner's IoT Definition The IoT is the network of dedicated* physical objects that contain Embedded technology, to Sense or interact with their internal state or external environment. The IoT comprises an ecosystem that includes things, communication, applications and data analysis. *Excludes general purpose devices such as PCs and smartphones 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 6
8 IoT is Entering Mainstream Adoption n = 425; base excludes "don't know Source: Gartner (February 2016) 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 7
9 Utilities Lead IoT Adoption 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 8 Source: Gartner (February 2016)
10 Stronger Emphasis on Customer-Facing IoT Benefits in Gartner, Inc. and/or its affiliates. All rights reserved. 9
11 Key Issues 1.What is IoT and Why it Should Matter to You 2. IoT Opportunities in Utility Customer Service Area 3. How to Deploy IoT Without Making a Mess 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
12 IoT Enables a Wide Range of Utility Benefits Improve Operations Benefits Enhance Services Damage Assessment Examples Remote Service Connect Optimize Assets Generate Revenue Turbine Performance EV Charging Services Conserve Resources Increase Engagement HVAC Optimization 72 Home Energy Management Improve Well-Being Provide Security Workforce Safety Substation Monitoring 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 11
13 Example IoT Use Case: British Gas Swarms Energy Efficiency Benefits: - Provide customers remote control and management over their thermostat and hot water boiler. Internet of Things solution: - Constituents: Customers can set their thermostat and boiler operations remotely using the Hive app from British Gas. - Things: Smart thermostat, communicating hub (connects to router) and receiver (fits close to boiler). - Processes: Customers can manage energy consumption across both space and water heating. Includes geofencing and emergency control. - Deployment status: Commercially available as an offering that is sold, installed and supported by British Gas, total installed cost of 249, installed at more than 100,000 British Gas customers. Improve Operations Optimize Assets Enhance Services Generate Revenues Increase Engagement Improve Well-Being Provide Security Conserve Resources 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 12
14 Things are Becoming Customers Your CIS is already talking to things - Remote connect/disconnect via CIS/AMI integration Is your CIS ready for things talking back to you? - Service request and price negotiation 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 13
15 What Makes a Thing a Customer? Executes Directions Makes its own purchases Receives messages Reports Disputes Requests Service Negotiates for the best deal 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 14
16 Things as Customers Come in Different Stages Fixed Take action on behalf of parameters set by humans Adaptable Choose among multiple options, with outcomes set by humans Autonomous Decide and take action independent of humans Basic Advanced 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 15
17 IoT Enables Digital Business Digital business is the creation of new business designs reached by blurring the digital and physical worlds via an unprecedented convergence of people, business and things via IoT Gartner, Inc. and/or its affiliates. All rights reserved. 16
18 Scenario: Home Energy Management Negotiates with Grid and Energy Providers on Behalf of Customers 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 17
19 Key Issues 1.What is IoT and Why it Should Matter to You 2. IoT Opportunities in Utility Customer Service Area 3. How to Deploy IoT Without Making a Mess 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
20 Integrate Across Multiple Technology Domains That Link People, Businesses and Things Utility Consumer ET OT IT CT The Internet of Things Issue: how to manage technology interaction (standards, security, governance) outside IT and outside utility enterprise? 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 19
21 Cybersecurity Concern: IoT Increases the Threat Surface Culture Heterogeneity Risk Things Policy Processes 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 20
22 Standards are Emerging but Not There Yet 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 21
23 Understand and Manage IoT Solution Scope IoT Platform Analytics IoT Operational Scope Cloud Mobile Holistic BI/OI Business Outcomes (For example, "Improve dispatch of fossil fleet to integrate renewable energy") Orchestration BPM Data APIs/Integration/MOM Gateways Aggregated Device Management Agents Things IoT/OT Communications IT (CIS, MDMS, EAM) IoT/OT Endpoints Information Management APIs/Data Integration/MOM OT (ADMS, GIS, WAMS) Prosumers Demand aggregators Merchant generators Energy service companies Energy retailers IoT Endpoints = Things + = IoT Localized Device/Data Management, Apps/Analytics, Communications, Security = APIs, Utilityspecific 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 22
24 You Cannot Buy an IoT SKU You Need to Navigate IoT Ecosystem(s) Services IT IoT OT Key Areas Representative Companies Standards Bodies Infrastructure Communications Data Center Software Security Middleware Industry-Specific IoT Endpoints Industry-Specific Semiconductor Processing Communications Sensors 2016 Gartner, Inc. and/or its affiliates. All rights reserved. 23
25 Recommendations Initiate cross-company collaboration to explore the strategic implications of things as customers. Identify the top three potential starting points for things as customers for your organization to assess market opportunity Partner with risk, security and privacy leaders to prepare your organization for long-term challenges when you interact with a things as a customers Consider what ethical standards are needed to operate in a world of autonomous business Review existing systems to determine readiness for connecting with things, and create plans to fill gaps 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
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