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Big data analytics and forecasting software will become the cornerstone of business for utilities and bring significant growth opportunities for information and communication technology (ICT) vendors, according to a report from Frost & Sullivan.

The firm says the emergence of a new set of business needs, driven by changes in the energy landscape, has led utilities to deploy intelligent energy networks. Frost & Sullivan adds that implementation of sensing and metering devices will enable access to new data and trigger a data explosion that necessitates the use of data management solutions, in turn boosting the prospects of ICT providers in the energy industry.

"With the emergence of smart grids, utilities will start exploiting new data sources - grid sensors, smart meters and electric vehicles - to optimize their business and provide better customer services," says Ewa Tajer, an ICT research analyst at Frost & Sullivan. "Starting from reporting, billing and settlement, they will test new technologies and add new sources of data to their data management systems to build analytics capabilities."

According to Frost & Sullivan, energy companies will also be forced to improve customer interaction by leveraging social media and various Web data. However, they have neither the requisite skills nor vision to handle big data, the firm reports.

In fact, Frost & Sullivan notes that the main challenge delaying business model transformation is the lack of expertise and infrastructure, along with tight budgets and the perception of risk. There is no doubt, the firm concludes, that advanced ICT solutions are the way forward.

Frost & Sullivan says that cost will be an important factor for customers in short-listing analytical projects and technologies for large-scale deployment. Many technologies are still considered too expensive and will not be adopted unless their deployment is fully justified economically. The firm adds that some utilities thus opt for cloud computing and software-as-a-service analytics to unlock data potential in a cost-effective manner.

"Cloud computing may be the answer to overcome utilities' hesitancy in deploying advanced analytics solutions," comments Tajer. "Certain utilities have already moved part of their processes - mostly non-critical ones - to the cloud, and smaller energy companies, in particular, are expected to increase investment in cloud computing over the next few years."

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