, happening this week in our hometown of San Francisco, brings together the best and the brightest of Oracle people and Oracle customers to talk about all the possibilities of the future—from bad to good and back again—and how to plan for those possibilities.
Here in Oracle’s utilities-focused group, the man most in sync with all those plans and possibilities is Senior Vice President and General Manager . So, we sat down for a short chat with him on the industry, the issues, and how to turn innovative thinking into insightful strategy.
On the timeline of industry evolution, where would you place the average American utility right now?
Let’s think about where we are versus where we think we’re going to be, and let’s use the telecom industry for comparison. That industry started out with a little home phone made by the phone company. There was only one in each home, and it was rotary dial.
Communication today is totally different, though. No little home phone—or big, heavy home phone, really—on the wall. Instead, most people carry their phones in their pockets, and those little phones in our pockets are not made by the same people as before. Instead, they’re made by companies that didn’t grow up in the communications industry at all. They stepped into telecom from outside when they saw a gap to fill.
What happened? Simple: the old suppliers didn’t listen. So, we now we have a whole new set of suppliers. Telecom experienced a massive evolution: the old Bells were replaced by new players and tech producers.
Looking at that timeline for comparison, where are we in the utility business today? We just got rid of the rotary phone. We have one step above that rotary: we have the push button phone, which offers great benefits, yes.
But we’re staring at next steps and progression patterns, and we’re not really focusing on the gaps that are growing, on the spaces that someone could step right into and fill, the way Apple and Samsung and Verizon did in telecom.
We’re too focused on what’s next to see the bigger picture.
So there’s a blind spot problem?
Absolutely. We’re celebrating the phone coming off the wall, which is an achievement, but that achievement shouldn’t be where we stop. Right now, we can’t even begin to perceive all the services utilities will eventually offer customers. We haven’t even scratched the surface of where we will ultimately end up.
Change is coming faster than most utility leaders will admit. Technology is moving faster than the industry, but that’s normal with evolution.
There’s a lot of commerce to be accomplished in this sector, but the question remains: What will it look like.
To be honest, it’s still a guessing game right now, but patterns are beginning to form. Utilities cannot afford to wait until they see the full picture. If they do, someone else will fill those gaps for them. Different third parties can jump in behind the meter. It can—and will—happen.
What hurdles do you see most utilities ignoring that may create those gaps?
We talk about innovation every single day, but we still talk about it like it’s merely a technology question. It’s not. There will be a lot of cultural issues that have to be resolved, and right at the top is our industry’s leftover monopoly thinking—that things are linear, that progress is made in steps, that evolutions and revolutions are tied to a timeline that builds incrementally. It’s not, and they don’t.
Leftover culture is a huge hurdle to get past. That’s where we start. That’s the beginning, and that will let us see those growing gaps. How do utilities do that? Simple: Don’t hide behind these two excuses: (1.) I can’t because of regulations, or (2.) I can’t because of slow-moving technology.
We already know that the area that will drive the most change in this business is at the edge of the grid, that assets on the grid edge will be used differently than ever before, and that the customer relationship is the key. We know those things, but we’re not fully invested in knowing them. Since most people still get their utilities from the same provider, we don’t think we need to act on that knowledge because no one else has yet.
But, today, not everyone shops at the same bank or buys groceries from the same store. And utilities may get there, too—to competition. If that comes into play, it could ruin a utility’s carefully-built brand and reputation.
How do we prevent that? By moving forward to fill those gaps ourselves, by putting those things we already know into not just planning and strategy but fully into action.
Keeping that customer-relationship at the forefront while also working to cover the gaps would allow utilities to maintain that customer intimacy they spent years building, as well as maintaining that data control that’s a huge value. If they give up that relationship, then the utility becomes a commodity business.
So, the consequences can be dire.
Not paying attention leads us to where telecom is right now: fractured, a free-for-all, and in a battle over customer love and customer loyalty.