Utilities increasingly turn to cloud software, despite security concerns

A new report from Oracle Utilities found that among 150 utilities, 71 percent today use cloud software for their offerings, marking a sizeable turnaround from the 45 percent who considered it an option three years ago.

The Acceleration of Cloud Computing for Utilities report linked much of this about-face to a particular concern for utilities: improving customer experience. As customers demand or become accustomed to the notion of more information and service, the majority of utilities now see Cloud options as one of the main ways to address data management, handling the growth of both Industrial Internet of Things (IIoT) and Internet of Things (IoT) devices and success in general.

“Just a few years ago, utilities looked at cloud computing with skepticism at best. Today, many realize it’s essential to their survival,” Brian Bradford, vice president of industry solutions at Oracle, said. “Utilities are increasingly seeing cloud as a fundamental asset in meeting ever-evolving expectations, mitigating security concerns, and turning data into an opportunity to modernize and evolve their operations to better serve constituents and customers.”

Security does remain a concern, however, and a major one at that — 85 percent of those surveyed listed security as a top worry. Privacy nearly matched it, though, at 81 percent, and regulatory acceptance also remains a barrier to further cloud adoption. It should be noted, however, that the companies’ concerns come not from any vulnerabilities in the cloud systems themselves, but rather from the increasing array of cybersecurity threats in the world at large.

As for the regulatory barriers, utilities noted that many regulators refuse to allow them to earn a rate of return on their cloud investments, which complicates upgrading older IT systems. Only 26 percent indicated such regulations as a damper on cloud adoption, while a majority 75 percent appreciated the role regulators can play in guaranteeing privacy and security for their customers.

Despite concerns, the report noted that 74 percent of utilities are more likely to push Cloud deployments for things like enterprise resource management and human capital management over the next five years.