Utilities in many parts of the world, and especially in the United States, are experiencing radical operational change as they deploy smart grid upgrades. Many utilities are already seeking consulting and implementation services from vendors to assist with smart grid deployments. And even after the infrastructure is in place, utilities will face a new set of challenges associated with ongoing smart grid operations, presenting an expanded opportunity for managed service providers.
According to a new report from Pike Research, “Smart Grid Managed Services,” the smart grid managed services market is accelerating rapidly, and the research firm forecasts that the sector will experience year-over-year growth of 75 percent between 2010 and 2011, rising from $470 million to $821 million during that period. Pike anticipates smart grid managed services will reach $4.3 billion in global revenue by 2015.
“The market forces fueling demand among utilities for smart grid managed services can be grouped into four major drivers: economic, environmental, social and technological factors,” said Marianne Hedin, industry analyst. “Of these, the economic drivers are the strongest influencers of change. Utilities are motivated by the opportunity to reduce their operating expenses through improved process and technology efficiency and mobile workforce management.”
Hedin said that application outsourcing, including demand response programs, is currently the largest segment within the smart grid managed services market. By 2015, however, that infrastructure outsourcing will become the leading segment, and business process outsourcing will also experience strong growth during the 2010 to 2015 forecast period, Hedin said.
Pike Research’s analysis indicates that three major factors will determine managed service providers’ ability to succeed in this emerging market:
• Domain expertise within the utility sector, including a long track-record of having served clients in this industry, especially as a managed services provider
• Information technology (IT) and operations technology (OT) expertise to tie IT requirements with OT demands
• The ability to address customer relationship management needs among utilities, as this is increasingly becoming a critical component of a smart grid program
Pike Research’s study examines global and regional smart grid managed services trends and forecasts market size and growth prospects by region and managed services segment from 2009 through 2015. An executive summary of the report is available for free at www.pikeresearch.com.