COMPUTING

AS UTILITIES HANDLE THE DATA DELUGE AND THE INFORMATION TECHNOLOGY DEMANDS OF THE SMART GRID, DOES THE CLOUD FIT THEIR NEEDS? BY DAVID BERNSTEIN

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IN THE
MANY THINK OF cloud computing as an exotic technology, but its main components have been around for decadesand its reason of existence will be familiar to anyone familiar with the history of shareholder-owned utilities. A century ago, the companies and institutions that used much of the worlds electric power generated it onsite. The do-ityourself solution had many problems, but the biggest involved supply. Sometimes private operators had power shortages and needed to cut production to cope. Sometimes they had too much capacity, which meant underutilization of an expensive capital resource. The answer was a combination of the commoditization of power generation, load-sharing, and utilities to organize it all.

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That same dynamic is revolutionizing information technology (IT) today, and its called cloud computingan over-arching term for a combination of technologies that provide computation, software, data access, and storage services and that use congurations and multiple physical locations unknown to the user. Behind the growth in cloud computing are computing hardware commoditization, virtual machines, the internet, and the advent of open-source software, which simplies the acquisition and use of code that someone else wrote and does so at a lower cost. The internet, with its high-performance communications equipment, open-source software, and resultant requirement of server space, completed the basic components. Unlike the normal adoption curve for most technologies, however, the cloud has some high-prole users. Amazons online retail operations, Facebook, and iPhone apps are all cloud-based. StarDavid Bernstein is managing director of Cloud Strategy Partners, LLC, and founder and working group chairman of the Institute for Electrical and Electronic Engineers standard-setting for P2301, Guide for Cloud Portability and Interoperability Proles and P2302, Standard for Intercloud Interoperability and Federation.

bucks and Citigroup use it to analyze mountains of data; and the federal government has aggressive plans to adopt cloud computing as a way to save billions of dollars a year in IT costs. In April 2011, General Services Administration associate administrator David McClure told a Congressional committee that his departments recent move to the cloud alone will save $1.7 billion annually. Clouds operating imperatives also are familiar to utility executives: Provide a service simultaneously to millions of customers with very high availability (greater than 99 percent) and at low cost. At the end of the day, cloud computing is about the commoditization of highly reliable, always-available IT resourcessomething unimaginable a decade ago. Atomizer The clouds computing components are familiar. Time sharingthe temporary rental of computing power from data centers run for that express purposewas popular in the 1960s. Similarly, virtual machinessoftware for a computer that implements in-

structions the way the physical machine wouldhave been around since the 1980s. For all its potential and high-prole users, cloud computing is still an emerging technology. As such, it is different things to different peopleand companies. The basic concepts are common to all cloud implementations, but the name itself is an umbrella for several technologies: infrastructure as a service, which provides raw IT resources on demandan organization essentially outsources storage, hardware, servers, and networking equipment, which the service provider owns, houses, runs, and maintains; platform as a service, which is most helpful to software developersan organization, looking to run its existing applications or to develop software, rents virtualized servers and associated services; software as a service, which is a set of on-demand applications hosted by a service provider and available over the internet; and business process outsourcing, which allows customers to move entire functions out of house. For most industries, the cloud is a computing paradigm different from

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the way IT traditionally has functioned. Instead of discrete boxes whirring and blinking away in a data center, think of the cloud as a vast collection of computing, software, storage, and networking components that have been atomized. Then, consider that cloud software congures these elements to meet the instantaneous IT requirement of each client, which now has its very own virtual data center. Cloud software is based on several operating principles. Virtualization. At any moment your application may be in Cleveland, your storage in Baltimore, and your central processing unit in Phoenix. Cloud software keeps track of it all and recongures your virtual data center as your real IT requirements change. You could call it load optimization. Redundancy. All your data and virtual IT configuration informationalong with everyone elsesis stored in at least three different places. Cloud software must know where it isand be able to recover it if one or more of the atomized computing resources fails. Failure recovery. When a computing element (hardware) dies there is no attempt to x it. Instead, the software that runs the cloud simply ignores it and allocates its function elsewhere.

HANDLING THE TORRENT OF DATA AND ACQUIRING THE SOFTWARE CAPABLE OF RATIONALIZING IT IS PRACTICALLY A TEXTBOOK APPLICATION FOR CLOUD COMPUTING.
Experience shows that human error, such as connecting the wrong wires or forgetting to install a software patch, adversely affect reliability and availability. Commoditizationparticularly of the personal computers (PCs) that provide most of the clouds computing powerhas made hardware inexpensive. Instead of expensive onsite workstations, inexpensive PC s as a computing platform in server farms is cost-effective for service providers. Start With the Future The synergies between the needs of the utility business and the cloud could be great. To the extent that they supply two-way communication, real-time information, and more options to monitor and control the grid, smart meters

(and the smart grid they help enable) will deluge utilities with actionable data. It will be enough to weigh down the most sophisticated data center. With smart meters in place, utilities will store thousands of readings a month for each meter. Analyzing and acting on the data will require not only large amounts of data storage, but also applications to access and analyze the data. On the customer relationship side, many utilities use different communication technologies across several platformssocial media sites, multimedia call centers, and so onas a way to enhance those relationships. Such real-time, highly personalized interactionsfrom creating personalized energy management plans to providing real-time outage informationwill demand sophisticated software and analytics. On the power-generation side of operations, utilities are integrating smaller distributed energy sources, often based on renewable (and weathersensitive) technologies, such as wind and solar. Recharging electric cars also will change minute-to-minute load characteristics radically. Integrating these sources into the grid and maintaining power quality will require

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predictive analysis that is many times more demanding than current operations for the average utility. Handling the torrent of data and acquiring the software capable of rationalizing it is practically a textbook application for cloud computingthe computational load will vary radically; data storage requirements will be substantial; and the communications capability to organize it all into a highfunctioning operation will require the internet. Indeed, it is difcult to envision a solution to these challenges that does not involve the cloud computing concept. (See the sidebar, Partly Cloudy.) Cybersecurity and Other Issues Still, the cloud must operate in an often unfriendly atmosphere of black-hat hackers, accidents, acts of God, and human frailty. The clouds most daunting challenges are at the interface of software (which requires a large degree of predictability to function properly) and human motivations and random events. To begin with, governance is critical to the clouds success. What rules are there? What should a company expect? What are the standards of operation? Right now, the technology is proceed-

Partly Cloudy

f you asked a roomful of utility chief information officers whether they use cloud computing, says Marc Razeghi, director of information technology services at Edison Electric Institute, probably every hand would go up. Thats because utilities like other industries have been using several aspects of the cloud for many years. Indeed, there are different cloud offerings that are part of a larger IT toolbox. Says Razeghi, it always needs to have ways to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. The cloud offers subscription-based or pay-per-use services over the internet that address that capacity need. Utilities may use cloud services ranging from full-blown applications to storage services to spam filtering. It can be software-as-a-service for their human resources or enterprise resource planning system. The need even may be for cloud infrastructure providers that offer storage and virtual servers, with on-demand access. Cloud web-service providers offer application programming interfacesmodular components for software application developmentthat enable the developer to expand functionality over the internet instead of building the entire application from scratch. Google Maps and credit-card processing services are two good examples. Also utilities may choose to use cloud-managed service providers for such functions as network monitoring, anti-spam, or even desktop management services. By the same token, a utility might use the cloud for certain aspects of the smart grid if it provides more flexibility and cost-effectiveness. When it comes to cloud computing, utilities and commissions still have concerns about data security and reliability. Of course, cybersecurity and data privacy are top issues for the industry regardless of cloud technologies. But the cloud adds another perceived level of complexityand the idea that software, hardware, and data might reside somewhere other than a utility-controlled site makes many utilities and their commissions uneasy. The cloud increases choices for utilities, for the smart grid as well as other large projects. Different cloud computing tools add more sensible options to the technology toolbox, says Razeghi. But it is not the only tool, nor is it absolutely essential.
By Eric R. Blume, editor and publisher of Electric Perspectives.

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ing much faster than the humans who must manage it uniformly. As the ultimate cooperative venture, the cloud needs its important stakeholdersthe corporations and institutions that implement their mission-critical applications on itto provide oversight and insight. In this respect, the cloud could be considered a public utility. Cybersecurity is a primary area for governance. You can divide the clouds cybersecurity issues into two categories: Lost data and compromised data. Both are important to anyone who thinks about moving mission-critical business applications to the cloud in order to realize cost savings. The problem of lost data becomes less of an issue as the integrity of the software and hardware strengthens. More important, nding the approach that leads to verifiable, repeatable ve-nines performance (that is, 99.999 percent) in reliability and availability. While a difcult problem, the potential for data loss is subject to measuring predictable performance and improvement. Compromised data pose a different problem because they often involve hackershuman intervention that can be intelligent, subtle, and effective. The challenges of multi-tenancymore

than one client using the same applicationmust be addressed, too, as must the co-location of data on servers potentially anywhere in the world. Cloud computing providers give these challenges special focus. Specific barriers can prevent problems due to hacking, multi-tenancy, and colocation. Another line of defense is the visibility cloud service providers have right down to a specific data set. In the end, cloud-based services are not inherently less secure than traditional architectures. They just require a different way to recognize and address problems. For utilities, there are the associated concerns regarding their regulatory climate and how they can conform to

COMPROMISED DATA POSE A DIFFERENT PROBLEM BECAUSE THEY OFTEN INVOLVE HACKERSHUMAN INTERVENTION THAT CAN BE INTELLIGENT, SUBTLE, AND EFFECTIVE.

privacy legislation and regulations in a cloud environment. Utilities probably are already aware of how state laws restrict the storage of customer data. A related concern is how cloud computing will affect government subpoenas and searches of those data. If the cloud uses global IT resources (as called for by the model), utilities also have to understand the extent to which European Union regulations (for example) might have an impact on operations. There is a middle way that utilities could takethe so-called private cloud. European utilities are organizing private clouds, for example. Also, the cloud itself can be helpful in setting up cybersecurity defenses. A company can secure data at appropriate levels. Departments can specify the sensitivity of their data and allow the cloud to process and store them in the most cost-effective manner according to such parameters as location of data centers and authentication. There are also operational concerns such as the amount of data any cloudbased application can process before it becomes sluggish. Given the fact that some data (certain sensitive customer information, for example) cannot reside on the cloud due to regulatory restrictions, ways have to be worked on

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Additional Cloud Benets

ost abatement and the handling of the data deluge from the smart grid are the compelling reasons for cloud computing, but there are other benefits. Cloud-based applications can address familiar operational issues. Remote sensors that monitor the grid can also monitor individual assets and systems to control load, act to avoid service disruptions, and communicate between formerly siloed systems. Similarly, the cloud can facilitate physical security monitoring of distribution networks as well as remoteand therefore vulnerableutility assets. Cloud-based applications already are available to monitor video content automatically and apply software-implemented logic to assess risks and trigger security alerts. Predictive analysis can provide warnings or take action to prevent equipment failure. Cloud applications are being marketed that can support field staff with accurate geographic data. By its very nature, the cloud will drive the standardization of IT infrastructure and applications, and this can help utilities with acquisitions and investments, as well as with putting new sites online quickly and cost efficiently. Sharing and collaboration can extend beyond the companys borders to include supply chain. The utility can deliver e-learning solutions, project documentation, and a wide range of customer-facing social media programs over the cloud, as well. Inside the utility, departments can take advantage of pre-approved, cloud-based platforms and development tool kits or use preconfigured application appliances that come with hardware, networking, security, and other services built in as standard features. Using these cloud-based tools, departments can develop, test, and deploy web-based applications quickly to support their operations. Most utilities in the United States have a higher proportion of employees nearing retirement age than any other major industry. The problem has many facets, not the least of which is how to retain the knowledge accumulated by older workers. The cloud offers a means of capturing this knowledge using social media and collaboration tools. The other side of the coin is the allure a smart grid operating on a cloud platform will have for younger workers. Energy conservation, sophisticated routing and optimization systems, and consumer empowerment ought to be a powerful recruitment tool.

for sharing the data in conventional systems with data or applications that reside on the cloud. Companies also need an exit plan and know that they can easily reclaim the data held for them by one cloud provider, so they can easily switch to another. Several professional organizations and industry groups are trying to reach denitive answers to these and other questions. Among those groups is IEEE, which in April 2011 launched two new standards development projects, IEEE P2301, Draft Guide for Cloud Portability and Interoperability Proles, and P2302, Draft Standard for Intercloud Interoperability and Federation. The Right Fit? With their regulated nature and the sensitivity of the customer data they hold, utility companies are naturally wary of the security and privacy risks that could arise from cloud computing, public or private. It should be comforting to know that the cloud community shares those concerns and invites their participation in the next great internet venture. In its full implementation, the smart grid ought to take the cloud concept to a new level. Millions of customers accessing both energy and IT resources

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with the expectation of five-nines availability and the ability to manage energy costs is something entirely new. Although we can predict condently that smart meters and smart appliances will provide the torrents of data needed to operate an ultra-efficient grid, utilities must nd ways to transport, process, and integrate those data into utility operations. Some form of cloud computing seems like the best option. For example, under the pressure of converting to geographically disparate renewable energy sources, utilities likely will turn to the cloud to supply the data center resources needed to operate a grid in which a signicant percentage of generating capacity may be intermittent, depending on whether the sun is shining or the wind is blowing. The sophisticated routing and optimization algorithms that utilities are developing today to meet this challenge must be complemented by equally sophisticated hardware and software that have high reliability and availability. In response to those challenges, the cloud offers several advantages. The capital investment a utility must make is low. In operation, the pricing rests solely on the actual resources a com-

pany usesthe result is that operating costs are lower than traditional data centers. Further, the utility can acquire and deploy services quickly (although integration with existing systems will take longer). And the fact that cloud services are highly programmable and

adaptable will be a valuable asset given the unknowns of smart grid deployment. (See the sidebar, Additional Cloud Benets.) In the end, cloud computing is IT outsourcing by another namebut with the utility in more control.

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