A Strategic Approach to Utility Cloud-Based Applications

Thermal & visual substation and transformer monitoring solutions are one example of cloud-based applications that can significantly improve utility operations. By providing greater visibility  over critical assets, remote monitoring reduces total maintenance costs and allows the utility to transition away from costly physical inspections. 

Effectively implementing cloud-based applications requires utilities to take a strategic approach and align the chosen systems with the larger goals of the organization. This ensures utilities can overcome and address some of the potential barriers to cloud adoption and achieve the full benefits of the solutions without creating new security or regulatory concerns. 

This article is part of a series on utility cloud strategy and security. To learn more, download our recent white paper originally published on EE Online (requires registration): Don’t Fear the Cloud - Developing Cloud Security Policies for Remote Monitoring Applications.

What Are Cloud-Based Applications

Cloud-based applications allow utilities to leverage a vendor’s cloud infrastructure for a specific purpose. This could include accessing data from remote monitoring sensors, storing thermal & visual images for future analysis, or using artificial intelligence and machine learning to automatically identify potential issues before they occur. 

Because the vendor has the relationship with the cloud service provider, the utility simply pays to use the service and does not need to build or maintain any internal infrastructure. 

While many utilities are concerned about the potential security and regulatory risks associated with cloud-based applications, these challenges can be overcome by taking a strategic approach and developing effective cloud-security policies. 

Addressing the Common Barriers to the Cloud

Despite the advantages mentioned in our previous article, and the further benefits explored in the white paper, utilities may find that there are barriers to successfully implementing and using cloud-based applications. But while some may ultimately restrict utilities from using the cloud in every scenario, many can be addressed for the most common applications. 

Data Residency and Compliance

Data residency refers to the localization of regulated data, especially Personally Identifiable Information (PII) within a particular region or country. 

This can be a challenge as many regulators do now allow companies to collect, store, or use data outside their home country. But the interconnected nature of the Internet and cloud may transfer data through data centers spread across multiple countries or regions. 

The good news is that many cloud-based applications, including thermal and visual sensors, do not collect, transmit, or store PII or any data that is critical to the flow of electricity. In these cases, data is often less regulated, making the cloud a viable option. 

To learn more about specific regulatory requirements, including North American Electric Reliability Corporation Critical Infrastructure Protection (NERC CIP) standards, download the white paper. 


As critical infrastructure, utilities are rightly concerned about cybersecurity. Regulated standards enforce cybersecurity defenses, but internal policies may go even further due to perceived risks. 

The truth is, however, that most reputable cloud providers can achieve greater security, respond to emerging threats more effectively, and offer more robust security tools such as multi-factor identification, user and role-based permissions, and encryption as standard features. 

A Strategic Approach to Managing Cloud-Based Applications 

As cloud-based applications become more prevalent in the industry, utilities must develop a strategy for selecting, implementing, and managing these solutions. Otherwise, utilities can quickly become overwhelmed with a wide range of disconnected and disparate applications that only add complexity without providing the promised benefits.

Identify the Why

Before choosing a particular application or solution, the first step is to identify the strategic objectives of the project. What will the application deliver, and how will this affect the larger goals of the business? Are there key performance indicators or desired outcomes that will determine if the project is successful, and what other strategic requirements will shape the implementation of the project?

By starting with the why, utilities can then conduct a more comprehensive business case - taking into account the various costs and benefits of a potential solution and comparing them against other investments or applications. 

Ensure Interoperability

As mentioned, an ad-hoc approach to cloud-based applications can leave utilities with a mess of solutions that aren’t able to talk to each other. Each vendor may rely on a different cloud provider, meaning it is vital to ensure interoperability and the ability to share and access data from multiple sources within a single, centralized software or dashboard. 

When comparing solutions, ensure they offer APIs, DNP hooks for SCADA, or other standard protocols that make it easy to transfer and analyze data between systems. 

Cloud-Vendor Selection and Lock-In

Finally, utilities should be aware of the potential for vendor lock-in. Fully implementing cloud-based applications can sometimes require time and resources that ultimately increase the switching costs of changing to a new solution. Before committing to a solution, ensure it is flexible and can meet requirements both now and in the future. 

Developing Cloud Security Policies and Architecture

The cloud is a highly secure, scalable, and cost-effective alternative to traditional, on-premises IT infrastructure. And by taking a strategic approach to selecting, implementing, and managing cloud-based applications, utilities can improve operations, reduce maintenance costs, and achieve greater visibility and control of the electrical grid.

In our next article, we’ll show how utilities can design effective security policies and architectures when deploying cloud-based applications and Energy 4.0 technologies such as remote thermal & visual monitoring sensors. 

To learn more about utility cloud strategy and security, download our recent white paper: Don’t Fear the Cloud - Developing Cloud Security Policies for Remote Monitoring Applications. Registration is required. This white paper was originally published on EE Online.