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How to Generate New Revenue with Platforms and Partnerships

Just about every utility is facing flat or declining revenue and sales. At E Source Forum 2017, Charles Bayless, retired Tucson Electric Power CEO, said: "New entrants are coming to the market - every utility is affected by that. You may think you are a natural monopoly, and you may want to go back to that, but you can’t.” And he’s right. The only natural monopoly left in today’s energy market resides in the wires and operation. Everything else--DSM, EE, HEM, etc.--is up for grabs, which as many of us already know, means it’s time to evolve the utility business model.

Utilities have essentially been asked to disrupt themselves. How often in the history of business have you seen incumbents do that? It is tough, but not impossible. So how do utilities generate new revenue as they shift from commodity providers to energy experience providers? The answer is platforms and partnerships.

Cameron Brooks of Tolerable Planet Enterprises claimed, "This industry is poised to move from a service utility function to a platform economic model." Platform ecosystems invite innovation from the outside and according to Accenture, are the foundation for new value creation. The platform is the business model.

Digital-born companies (think Uber, Amazon, Google) have benefited from this model for years and other industries are catching up. Platforms create value with both partners and communities of users, and will open entirely new paths to growth for utilities.

Let’s apply this thinking to DSM. With a platform model, utilities can gain a better idea of what’s happening behind the meter, better forecast the growth of DERs, provide a unified, omnichannel customer experience, personalize customer journeys, and better inform regulators of how utility initiatives are meeting system and customer needs.

The uptake of digital technologies and cloud foundations is the crucial first step to break into the platform world. Accenture says the essential building blocks of a successful platform model include:

Cloud Services - This is the foundation.

API Strategy and Architecture - This is what will tie everything together.

Open Source and Reusable Software - This will speed utilities’ time to market.

Mobile Development Platforms - This will help utilities meet their customers where 
they are.

Internet of Things - This will enable real-time business models and help utilities stake their claim to the smart home.

Containers - These will allow utilities to move fast, deploy software efficiently, and operate at scale. 


Platform technology is fast-paced and ever-evolving. To master this business model, utilities will need to be able to keep up. Doing so in-house will require a large investment of time, money and resources, perhaps larger than many utilities would prefer. This is where utility partnerships come in.

The importance of partnering with third parties reverberated throughout the E Source Forum. Bayless pointed out that third parties live in a much more competitive landscape and often operate across multiple states, giving them the experience, learnings and insights home-grown utility solutions can’t replicate. Partnering also gives utilities immediate access to the infrastructure, data management and innovation that technology requires, allowing them to focus their time and resources on the insights and business applications that matter most.

It’s important to note that finding the right partner is key. Utilities need to be diligent in finding a platform partner that will work with them, providing information sharing and close collaboration, instead of simply selling them one-size-fits-all solutions.

As I mentioned before, utilities have been tasked with disrupting themselves, but that doesn’t mean they need to go it alone. For more information on how utilities can thrive in this evolving energy ecosystem, check out our ebook: The Amazon Effect: Energy in the On Demand Era and What it Means for Utilities.

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Categories

Tags

  • Continuous Demand Management
  • Customer Ops & CSAT
  • DERs
  • DSM
  • Data Analytics
  • Demand Response
  • Disruption
  • Energy Efficiency
  • HERs
  • High Bill Alerts
  • Privacy & Security
  • Real Estate
  • Smart Home
  • Solar

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