After 30 years in the marketplace, SAP Americas is the undisputed leader in providing solutions to the utilities sector.  James McClelland talks to The New Economy about SAP’s solution for advanced metering infrastructure and muses on the future of electric vehicles.

The New Economy: The Utilities market place is a dynamic and competitive environment, where would you say SAP is positioned within it?

James McClelland: SAP is the undisputed leader in providing utilities solutions to the utilities market place. We have been in this business for over 30 years, focused on developing solutions for utilities. We are leading with over 575 customers using our billings system world wide. This has been proven by analyst firms such as Gardener, IDC UtiliPoint ranking us at number 1 year, after year, after year. We are the leader in enterprise asset management systems. Over 1200 Utilities world wide are using our core ERP solutions to run their core business, and when you add in business analytics, that customer base raises to over 2200 customers world wide. And now with the introduction of our AMI Integration Solution for smart grids, we are seeing that number increase continuously.

The New Economy: SAP is a pioneer in the use of smart grids, but what is the focus of the Company’s research and work in this sector?

James McClelland: The smart grid takes on many different definitions to many different parties. The first thing we need to define is, what is a small grid and how big and how broad is a corporation going to try and attack that market place. No one vendor is going to be able to address all components of a smart grid. SAP has worked with our customers and leading meter providers to create and AMI solution to be able to speak to the smart meter, to be able to have bi-lateral communication to a meter to control a meter, turn a meter on, turn a meter, read it and send digital messages. Then the next is to be able to speak to intelligent assets on the grid so we can help the grid to be come self healing. So the focus areas will be on energy efficiency, to be able to conserve energy. Then next (‘key asset’ 02:01) will be on demand side management, to be able to manage demand and supply. Then finally, to be able to be able to adopt, to distribute it renewable type energy sources.

The New Economy: What are the challenges of the Smart Grid era for the Utility Companies?

James McClelland: Utilities are in for a huge challenge. First of all it is a huge cost for infrastructure and it needs to be able to roll and out replace a lot of these ageing assets, whether it is just the meter or actually the whole transmission grid, in a phased type strategy without jeopardising the current delivery mechanism of energy to their customer base. It will be a whole change to the way that they work with assets, a big change of operational technology now speaking with information technology, software talking to and from hardware. The second, is how they are going to be able to market this that is is actually going to make difference in their customer bases usage patterns. Just to put technology in place without marketing to your customers on how to make an improvement would be a house of cards.

The New Economy: As we enter a new era of energy provision, do you see technologies and industries evolving to the point where they effectively merge?

James McClelland: Absolutely. I think we are starting to see that today. Historically we used to have very defined barriers between industries. There were retail industries who ran their businesses the way they wanted to. Utility industries, we deliver power whether it be water, gas or electricity, and we collect money from our customers. But with the whole smart grid, we are seeing those barriers between industries breaking down, if they even exist at all. Telecommunications is now going to be central and pinnacle to the delivery of information, electronically from the meters and from the intelligent assets on the grids. If we look at manufacturing corporations, they are creating solar panels, windmills which are new sources of energy that are creating sources of power to address the new energy revolution. You can look at banking systems which are investing in these new areas. Public service systems are setting regulatory policies. Automotive manufacturers are creating electric vehicles that are now being storage devices for power and delivering back onto the grid. So these are all disparent industires that are now working together as conglomerates all around energy.

The New Economy: You have touched on the issue of electric vehicles, when do you see them reaching a tipping point in the market place?

James McClelland: Electric vehicles is a challenge right now because firstly there are the infrastructure changes. If you don’t have the infrastructure in place to be able to charge a vehicle up, it is not going to be as widely adopted. Secondly is the capacity of the battery charge, if you don’t have a battery that can hold a charge for much more than 2 or 3 kilometres how useful will that vehicle be? But as that infrastructure does come into place, I think you will start to see that adoption moving fairly quickly. In the US alone they are predicting by 2015 that there should be half a million electric vehicles on the road. At first I thought that was a bit aggressive, but the more I think that electric vehicles may be on a rental type property for short term leases second vehicles for families to be able to do short runs up to the grocery store or take the kids to school, I think that may now be a relatively conservative number. When we see what is happening in the Nordics, China and North America, these are going to be very aggressive growth areas. So we see the data now for 2014/ 2015 may be the wide adoption time period.

The New Economy: Looking ahead, what is SAP’s strategy in the Utilities market?

James McClelland: We are first focused on taking look to speak to the meter, to improve billing systems to be able to bill customers for these various time of use type models whether to it is for water, gas or electricity. But then the next key area is around demand side management, balancing the demand at any current need and production of energy. So that is one focus area. Electric vehicles as we spoke on, bringing mobility into place. How much is that mobile device going to be able to use the way that we control power and change the way that I use power in our house, and be able to consume better. As we see the market change, these are the 3 key pillars today. But if I am to crystal ball, 5 years is a long time away, but SAP will be there to be able to deliver the solutions for these customers.