Cloud Market Presents Utilities with More Purchasing Options

There is no doubt that cloud computing has changed how utilities deploy business applications. As the market continues to evolve, new cloud deployment models have emerged that provide utilities with even more service options.

Cloud is taking up a larger part of the technology budget. Revenue for all cloud elements is expected to surpass $1.3 trillion in 2025 while sustaining a compound annual growth rate (CAGR) of 16.9%, according to International Data Corp. (IDC).  Those numbers are divided into two main buckets.

Public cloud services come from vendors, like Amazon Web Services, Microsoft Corp. and Google Inc. It is expected to generate $385 billion in worldwide revenue in 2021, grow at a CAGR of more than 21.0% through 2025, and reach $809 billion.

Private cloud includes hosted private cloud services and the fast-emerging Dedicated Cloud Infrastructure–as-a-Service (DCIaaS) segment. It is anticipated to reach $5 billion in 2021, grow at 31.0%, CAGR, and total $497 billion in 2025.

Which Do You Need: Public or Private Cloud?

Each approach has strengths and weaknesses. Public cloud relieves utilities of maintaining the computer infrastructure, but it may not meet strict compliance and regulatory regulations. Private cloud gives energy companies more control but requires a significant investment in personnel, time, and money to maintain the computer systems.

Moving forward, the fundamentals driving the cloud market will continue to shift with the transition to a digital-first economy.  Public cloud will shift from generic services to deployment of specialized services, including those focused on energy delivery and administration. Private cloud will continue to develop new models that reduce customer maintenance. 

Cloud has become a key technology element for utilities. Public cloud services continue to extend their application reach, but private cloud remains a popular option for many utilities.