 the investment dollars to set up their own smart grid so call it smaller utilities municipalities co-ops the ability to buy it as an electronic grid and energy grid what smart meters and the infrastructure necessary to get all the return on investment from smart grid as a service so clearly buying it on a per meter per month basis is really kind of the market that we're going after what are the big things you're seeing and this is an emerging trend obviously you know clean tech energy is a big big hot button in in today's society and technology through sensor networks and everyone talks about in our world and you know the Internet of Things what we're really talking about here is how using the Internet and technology to connect to our lives so how does that fit into all that well clearly one of the best ways of reducing the overall cost of producing electricity is to get consumers to moderate their own demand during peak times the return on investment is pretty well proven it has all of those things that you're talking about for distributed automation all of those kind of activities but really it requires the Internet to provide the feedback loop to customers so from that standpoint it really is bringing the power of the Internet and networking technology to individual consumers to manage their own electricity spend so where do you live which which part of the country I live in San Diego so you're in San it's not a bad place me lawyer I have friends there it's gorgeous gorgeous environment California obviously is very sensitive to the energy is there any spots within the US and are outside the in the world that are highly sensitive to the energy smart grid is our early adopter regional focus yeah I think I think California is one of the the hot spots for it mainly due to the deregulation that occurred and some of the the I guess problems that engendered there's areas of the country where there's very cheap sources of electricity and so they and they have plenty of it you know clearly in California we're worried about having enough during peak times so California is a big hot spot for this and certainly and certainly the Public Utilities Commission in California has mandated that the big investor-owned utilities like Edison SDG and PG&E put a smart grid in so we you know Dave Vellante my co-host is back Dave welcome back on the set thank you John Eric has got a smart grid as a service technology EMC customer so he's kind of like our Tom Peck of the day so he's got V block and we're just talking about the smart grid we have about 3,400 people watching hello everybody welcome to the new surge of audience 3,488 to be exact smart grid is a cool application Dave sitting on top of the block and and it automates a lot of the energy consumption that users can keep so the futuristic scenario is I got my mobile device I'm managing my utilities watching my bill not overpaying I can program my infrastructure is that kind of an accurate view and are that oversimplifying it what's the scenario for the future use case I think that's certainly one of the major use cases that is available but clearly from a utilities perspective it gives individual users at their home the ability to program how much of their electricity use and gas and water ultimately that they really want to use at any one particular point in time the payback from a utility standpoint as they can also reduce their accounts receivable and bad debt so you can set up through smart meters the ability to set up customers on pre-pay that alone actually pays for a lot of the infrastructure Dave and I are Dave and I were talking about innovation and the sandbox of Silicon Valley obviously in your area in La Jolla pretty well known for a lot of telecom and a lot of innovation down there and SCSC is known player in La Jolla and San Diego community so innovation is on top of mind but a lot of baggage exists in IT Dave and I talk all the time about Oracle and some of the you know flexibility issues around agile issues around Oracle or lack thereof and things like SAP which is more open you get closed Oracle open SAP how do you guys look at those new environments because V block is really interesting because it allows you to work in a very open new innovative way in this culture so what's your experience with the IT landscape to make this happen how do you get to that innovation point well certainly with a lot of the utilities that we're working with they tend to be on the smaller end of the IT spectrum often you know IT departments measured in the tens or even the single digits they really need IT help there are several decades behind and from our standpoint the ability to buy this as a service you know pretty much as a service appended to the end of anything is kind of the the latest buzzword but from our standpoint it really provides a way of of helping out IT in this instance a lot of the applications that we're using are from Oracle you know they have a meter data management system that is is part of our offering potentially as well as other vendors clearly virtualized it is virtualized and really what we're talking about is having the ability to support large numbers of individual utilities with a whole bunch of different applications you know in order to put in a smart grid you need a meter data management system a head-end system often you want to supplement that with a customer information system a GIS system a workflow management system all of these systems clearly the the upfront investment to put them in yourself especially for a small shop is kind of prohibitive and so we're trying to address that end of the market so these are Oracle database based applications correct or not necessarily or or sequel or see or see okay so so in the case of Oracle database based applications are you virtualizing those absolutely you are okay and Oracle supporting that or certifying it or kicking and screaming kicking and screaming yeah okay so this is a common theme that we hear in our community and we've studied this a lot we we know that technically there's no reason that VMware and Oracle they just work fine together but Oracle of course wants you to use Oracle VM and all that stuff but so you have figured out how configure Oracle for VMware and it works great we know this and then it's on you to figure out how to work with Oracle but so your customers don't see any of this I'm correct what do you think of the the Microsoft scenario I mean Microsoft is a big IT player and and they just bought Skype so we know we've been covering that like a blanket on the Skype video so video is a big part of that new Microsoft scenario in your environments is video surveillance kind of playing into this grid smart grid technology can you certainly that's part of the smart sensors you mentioned earlier you know the ability to actually use that network the sensor network that you put in place primarily built on the back of smart meters and collectors you certainly can use it for surveillance of your substations you can add all kinds of applications on top of it from a Microsoft standpoint clearly a lot of the servers run on server 2008 and so there's certainly a lot of overlap with what we do and as I said it's not exclusive to Oracle I mean we use a lot of SQL server and what we're doing as well so you guys are cloud right I mean and let's talk about vblock and how it fits into the cloud this notion of taking a single logical block of infrastructure to support applications across the portfolio that's new it is how does that change the way in which you look at organizing your IT organization and and the various roles I mean you previously right you might have silos of storage admin server admin network admin is that changing as a result of this well clearly if you're buying it as a service you have to be willing to outsource or at least have someone else run some of that for the smaller utilities we deal with that they really can't hire the kind of expertise that they need in order to advance and so they're they're more happy to do that but you know what we're offering is really a private cloud on a shared basis if you can think of it that way I mean it is really not a public cloud all of our customers are telling us that you know using the traditional public cloud vendors to store their data it's kind of a non-starter from a data security standpoint certainly some of the the Sony incident some of the other ones have brought that to a strong light recently so we're offering virtually private if you will or dedicated private cloud services to each of these utilities but using the vblock on a shared basis okay and so from your standpoint are you organizing different than say a tradition I mean you've got a deep background in IT is it changing the way you might organize an IT environment or not necessarily well we're a traditional IT outsourcer and so we certainly have all the traditional disciplines that you would expect from a traditional IT outsourcer we're applying that best practice knowledge to this new environment and acting as an extension of the IT departments in each of these utilities so generally speaking they're looking at us to come in and provide best practices that allow them to accomplish things that they really could not do on their own okay so what about um talked about security before um that's interesting you've got essentially a multi-tenant private cloud so how are you architecting security to deal with that well a lot of the smaller utilities we deal with are together in what they call joint action agencies and so they've already agreed to share data or aggregate data but really on a on basis of very defined rules so if there's a data warehouse where the data is aggregated we provide very specific rules to make sure it's private to each client so it you know it really is using the ability built into the database to segregate data to keep it virtually private to that particular client so i mean that's got to be on the top of mind for your customers they must ask you about security a lot right that that's probably question number two after cost so cost is number one yeah cost is still number one so but that's in your sweet spot isn't it it really is i mean scic is known for cyber security we do it for all the three-letter agencies and we applied that knowledge frankly into this space using some of our unique technologies that we have how about privacy you know you hear a lot about security but you don't hear as much talk in the enterprise about privacy you certainly hear a lot you know with the sony hack and and and now that you know you know google android and iphones are following us around um they're kind of two sides of the same coin aren't they why don't people talk more about privacy is it just part of the security discussion or is it is it becoming more important i think it is becoming more important and i think it's still now just being addressed i mean the ability to use the data to understand what is happening so from you know do you really want you know a utility to understand your usage profile is there a benefit to that clearly there's a benefit and it's kind of a byproduct of the technology but if you were to provide that data to a police agency a standard size house in a neighborhood that's using four times as much power as every other house of similar size in an area could they be doing something like growing something illegal in there you know there's all kinds of uses of that data and so it brings up all kinds of interesting questions on privacy and you're right i think we've just scratched the surface on that so this notion of a smart grid is interesting i mean it's getting a lot of play um there's some uncertainties right no question um and and um but in the big grand scheme of things there's a lot of waste there's a lot of waste electricity that goes off the grid right i mean that is sort of the the big the big gestalt problem that you're attacking i presume is that right well the issue really is the cost of producing electricity today that you really still can't efficiently store large amounts of electricity it has to be generated as it's needed and so what happens is there's base load generation with the big plants and then they have what they call peaking plants uh that provide i guess a leveling out of the peaks um peaking plants cost tremendously a lot more to operate than the base load plants and that's why you see tiered electricity prices as the costs go up uh the ability to shift load you know i mean we've had these load shifting programs for quite some time where you know turn off the pool pumps turn off you know electricity or cycle them for air conditioning those kinds of things the big benefit to a consumer is being able to shift your use to a lower cost of use time interval and so smart grid gives the utilities the ability to do time of use pricing so you can decide that i would rather run my pool pump at night today there's no benefit financially for doing that so you don't but if if you actually got your electricity costs in half for that you would do that same thing for um electric vehicles as they come on the grid electric vehicles that are being charged in how do you incentivize customers not to plug them in as soon as they come home which is the peak of the day around five o'clock or six o'clock what's going to happen to the transformer when everybody plugs in at the same time i mean it's not going to work is it exactly right and so the only way to actually prevent that is to incentivize the consumer to make smart choices and so there's in-home displays that show time of use based pricing allow you to program in advance using your computer using the web to basically say if pricing reaches this level turn off these devices in my house it may gives you a tremendous amount of flexibility but the benefit is that is that you're operating as a utility you're peaking plants less often okay and that's there's a lot of software intelligence in there that enables that and then there's some infrastructure underneath it that allows you to respond quickly very much so and this i mean we've been at wikibon we've been writing about this a lot um we've been covering this the whole notion of this logical block of infrastructure and in terms of being able to support those new and emerging applications is it is it in your opinion you know a dramatically different shift or is it more just sort of technology sort of bolted together um help us understand that i think it is a dramatically different shift i mean for a utility that's used to operating with a single monthly meter read cycle usually with someone walking by or even a truck roll where they're going down and actually using amr devices the amount of data you know this conference is all about big data the amount of data is increasing hundredfold the amount that a utility is going to have to deal with utilities are very conservative organizations and this is an explosion of data and an explosion in their it department that frankly uh you know they're they're still trying to figure out how to deal with so i i think it's a paradigm shift for us as an it outsourcer it's just more of the same it's applying the best practices that we've used for years with erp systems uh to a new mission critical system because we are touching a utility's most critical business process which is meter to cash so talk about data um your customers obviously own their own data that's got to be pretty clear um in your relationship with them um are they or are you partnering thinking about somehow gaining or uh extracting greater value out of that data out of that database of information that's there is that we're too far off or i mean clearly we're not there to harvest it uh and to make use of it uh we're talking about ways of helping them harvest it right um you know again these joint action agencies like in north carolina for example electricities um there they will be able to use the aggregated data to make you know buying decisions from their large i o u service providers that provide the electricity for them most of the municipalities don't have their own generation so they buy it from a local big i o u um and so they're they're definitely trying to figure out how to minimize their their peaking costs and those kinds of things so there is a benefit of aggregating the data for the benefit of making joint aggregate decisions for these agencies will you do that aggregation for them we do we'll have a data warehouse that allows them to do data analytics um and to make good decisions based on the data not not just at the individual municipal utility level but also at the joint action agency but there's no be no sharing between joint action agencies if you will right which tend to be state-oriented so was that i mean can you charge for that it's part of the basic service so the way we're pricing it is a per meter per month basis um with additional for each new service beyond the basic if you will the basic includes meter data management uh the head ends software as well as an option to actually uh amortize the cost of buying and installing the meters themselves excellent well s a i c innovating um into the smart grid uh eric is great to have you on the cube appreciate you coming on and sharing your perspectives about about vblock infrastructure software as a service the the the electrical grid some of the challenges that customers are facing some of the data opportunities that are out there eric thanks for coming on the cube thank you for having me thank you thank you for coming on appreciate thank you john okay we're here at emc world and we're in las vegas uh s a i c dave is uh known for invent