IDC Energy Insights Assesses Emerging Managed Services for Utility Industry


IDC Energy Insights announced today the availability of a new report, Vendor Assessment: Emerging Managed Services – Place Your Bets (Document #EI234026), which examines managed service offerings for the North American utility industry. The new report is intended to help utilities navigate through the multitude of concepts and offerings that are being presented for utility consideration in today's market. IDC Energy Insights offers utility smart grid, IT, and marketing professionals with guidance on how to better engage vendors and reduce their risk exposure when considering managed services.

Over the past 18 months, service providers have introduced a raft of new managed services to help utilities manage business processes and technology infrastructure costs. However, the new managed services offerings lack a history of performance in the utility industry. Choosing which services, if any, can best meet the needs of the utility is a daunting task. Within the report, IDC Energy Insights has categorized and classified managed service offerings in terms of the offering's market readiness. Categories include:

A sure bet: An offering that has been implemented in utilities or in other industries for 12-24 months and with market penetration of 10-18% of utilities.

Up and coming: IDC Energy Insights expects these manage services to be adopted in the next two to three years by 10-18% of utilities in North America.

Promising: These offerings are being floated as concepts to the industry and, at most, may be piloted by one or two utilities.

Based on interviews with solution providers and utility professionals, IDC Energy Insights found security operations center (SOC) and advanced metering infrastructure (AMI) managed services are a sure bet for utility companies since they are well established. Network operations center (NOC) services, smart metering plus data management, and energy efficiency SaaS are up and coming while demand response services (residential), smart metering plus business process, and smart metering plus outage management are considered promising.

While managed services can provide technology cost containment, business performance predictability, and organization agility, emerging managed services introduce risks such as longer-term cost and service disruptions. To help alleviate these risks, IDC Energy Insights advises IT and operations professionals in the utility market to consider the following before investing in new service offerings:

Understand pricing and contract negotiation

Build proper service-level agreements into contracts to bulletproof investments

Understand the company’s tolerance to risk when acquiring new services

Carefully select between a customized service that costs more and a standard offering that has more viability and has been in the market for some time

Jill Feblowitz, vice president, IDC Energy Insights, explains, "Multiple managed services are emerging into the market to serve the needs of utilities. The challenge is to make managed services a win-win proposition for utilities and the providers of services. Utilities must be able to see value in services, but also require reliability of service and privacy of customer data. Vendors must be able to create a viable business in a relatively short period of time, taking advantage of lower-cost delivery methods such as cloud, and also need to hit the right pricing arrangements, where little may be known about the cost of in-house services."

For additional information, or to arrange a one-on-one briefing with Jill Feblowitz, please contact Sarah Murray at 781-378-2674 or Reports are available to qualified members of the media. For information on purchasing reports, contact

About IDC Energy Insights

IDC Energy Insights assists energy businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the utility and oil and gas industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit, email, or call 508-935-4400. Visit the IDC Energy Insights Community at