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IT Security: Who's Investing In What?

Regulatory and market forces put the pressure on information technology to perform.
Fortnightly Magazine - January 1 2003

of data in every system, when he's sitting at his desk in his office," she says. "But if he's at an Internet kiosk in an airport, maybe he doesn't need to have access to everything."

Real-Time Improvement

Yet despite the cybersecurity headaches they create, wireless devices are here to stay. As venture capitalist Klein points out, "[I]rrespective of anything that happens to Enron or Dynegy or anybody else, our economy is converting to a real-time economy, a digitized economy. In order for utility customers businesses-to operate and function, they need a level of power quality substantially higher than anything that has been provided in the past. So that means information to manage that distributed network will have to be invested in, irrespective of the pace at which deregulation occurs."

Klein thinks that anything that helps utilities manage their networks better and more quickly to serve customer needs-real-time pricing technologies and network management technologies, for example-is somewhat impervious to deregulation trends.

Nancy Floyd, a managing director at Nth Power, a Palo Alto, Calif.-based venture capital firm, agrees. The wireless communications area for electricity companies is interesting, Floyd says, in part due to the industry moving to communications-neutral listening devices that will talk through public networks. More significantly, she says, the change is not just about getting the data, it's what you do with the data. "There's been a lot of work done on the software side that routes data to the people who need it so they can have it immediately," Floyd points out.

Floyd thinks that the business case for wireless is there, and that some new technologies offer a very compelling ROI for utilities. "I think it probably will be deployed more at the commercial and industrial level, and it will enable utilities to do … real-time pricing, things that have been talked about for years, where you really can see the business case now," she argues. "Smart metering systems are more than just capturing data; it's making sure that the data gets to the hands of the people who need it, in real-time." If there's an outage, for instance, data goes not only to the customer account manager at the utility, but also to the facility manager who works for that customer.

The shift to metering with software and the communications-neutral network means that software will track different kinds of events that happen on the system. The beauty, according to Floyd, is that the information routing "is done in real time, distributed to the people who need that information, so they can act on it as quickly as possible."

While smart metering is often hailed for its ability to send price signals to customers in real time, the appeal for Floyd also lies in the difference smart metering can make to reliability. The use of wireless and smart metering is driven, Floyd says, by the need to balance the system. "As a business issue, it's very, very compelling, and it's also a reliability issue - reliability to immediately sense that an event has taken place, down to the customer level,