Image courtesy of Pike Research

Utilities is one vertical that’s not exactly ahead of the curve when it comes to IT, but there is a definite shift towards modern infrastructure – smart meters in particular. Unlike the traditional home energy monitors, smart meters can be used to gain better insight into customer behavior – sensors can detect outages and other patterns in near real-time.

According to a new paper from Pike Research, many smaller utilities that operate advanced metering infrastructure (AMI) are outsourcing maintenance to third party providers. This is becoming quite a trend – the research firm expects managed services for AMI to become a $2.2 billion market by 2020.

“AMS remains something of a well-kept secret, but the market is poised to take off,” says Bob Lockhart, a senior research analyst at Pike Research. “While there’s more current activity and more installed end points than you would expect today, the current volumes pale in comparison with what is likely to come over the rest of this decade.”

More end-points mean more data, and thanks to new technologies companies can leverage their smart meters to extract insight that’s highly beneficial from a business standpoint. At the same time utilities also want an affordable and economically predictable means of handling the day-to-day operations, and that’s where the cloud and third party providers come in.

On the flip side, the growing number of connected devices has a negative impact on a different type of public infrastructure – the internet. Intel Data Center Group General Manager Pauline Nist warns that in the coming years, carriers will have a harder time maintaining service levels in a cost-efficient manners: as mobile traffic increases, so will the need to realize a faster return on data center upgrades.

It’s all part of an infrastructure upheaval that impacts not only consumer access to the web, but services as well.  That’s why an overarching trend is moving towards smarter networks, using a software-defined infrastructure that’s able to monitor itself and its ongoing activity.  In order for emerging services like smart grids to become truly viable replacements to the slow and cumbersome infrastructure that plagues the power grids of today, IT will need to become a central focus for energy companies, smart meters, as well as the third parties that manage the data.