Ubiquitous Internet of Things: Only a trend, no outlet

My company is Hangzhou Shuyuan Electric Power Technology. We are a company that provides electric power cloud platforms. Today, I will share some thoughts on ubiquitous Internet of Things business and entrepreneurship from the perspective of industry, market and company development.

1. The organizational middle platform is the prerequisite for the data middle platform

After more than ten years of digitalization and informatization, power grid companies have finally reached today's ubiquitous Internet of Things. We once had a brief exchange with a team from Alibaba and found that in the direction of big data, Alibaba and power grid companies actually have the same goal. They all started from the IBM+Oracle+EMC architecture and developed towards the cloud platform. According to the path of informatization, it can be divided into several stages:

Phase 1: Each department builds its own small system;

Phase 2: Limited data exchange between departments through the data bus;

Phase 3: Data integration under the demand of cross-department integration (the marketing and distribution integration of ubiquitous IoT is to do this);

Phase 4: By re-unifying the data model, data storage, and data service interface, the data middle platform is unified and the applications of various business departments are empowered.

Alibaba has basically reached stage 4, while power grid companies are still between stages 3 and 4. Why is this happening? Because Alibaba has adapted to marketization very quickly and has undergone large-scale organizational structure adjustments. Power grid companies are constrained by the existing organizational structure, so they have a data middle platform but no organizational middle platform, so it is difficult to adjust in place all at once. This is not a technical problem, but a management problem.

2. Ubiquitous Internet of Things is a major business trend

Ubiquitous IoT in the power industry includes three major areas: ubiquitous IoT on the power generation side (smart power plants), ubiquitous IoT on the power grid side, and ubiquitous IoT on the power consumption side. Power grid companies are more focused on ubiquitous IoT on the power grid and power consumption sides. However, as of now, the ubiquitous IoT implementation path on the power grid side is clearer. Although there is a long-term contradiction between the data middle platform and the organization without a middle platform, there are still many things that can be done in the third stage mentioned above, such as marketing and distribution integration, distribution network command, smart substations, etc., and cross-departmental business process integration and data integration based on this demand can be done without breaking the existing organizational structure.

However, on the electricity consumption side, the contradiction between technology and organization is very clear in power grid companies. The existing power marketing service system is for marketing business management services rather than customer value realization. It cannot face the fierce market competition in the integrated energy business in the future. Even if a cloud platform related to integrated energy services is built, it cannot face the problem of insufficient organizational capabilities.

However, from the perspective of the technology of ubiquitous Internet of Things itself, the level of digitization on the electricity user side is very low, and there is a huge digital divide that needs to be bridged. However, this is only a technical issue. What is more important is the issue of exploring and meeting the service needs on the electricity user side.

First, we should see that in the process of electricity and energy consumption, as corporate users, there are a lot of service demands. Previously, due to the low level of marketization, these demands were hidden, just like before takeout, every household solved the low-level dining needs by themselves.

Second, with the improvement of marketization level, customers' service demands are gradually emerging, whether actively or passively. Many power sales companies and power service companies are exploring new demands of offline customers, and these demands exist objectively.

Third, integrated energy services are, to some extent, an enterprise service market. To B business is difficult to do, let alone energy To B business, which is more professional and customer needs are more hidden.

Therefore, ubiquitous Internet of Things is a technological requirement, but more importantly, it conforms to the market trend of enterprise energy services. In the future, as customer needs are continuously explored, how to realize an interactive online and offline business model based on ubiquitous Internet of Things will be a great test of the company's level.

3. Ubiquity in the field of electricity consumption reflects real skills

Ubiquitous IoT on the power grid side is a management value-driven business, and is more in line with the path of informatization. The largest IoT project of power grid companies before should be the online monitoring platform for the status of power transmission and transformation equipment. Now ubiquitous IoT is also taking this path in the medium and low voltage distribution network all the way to the substation and below.

Mr. Kou’s statement that “Ubiquitous Internet of Things cannot be implemented in the same way as information technology projects”, in my opinion, refers more to the ubiquitous Internet of Things in the field of electricity consumption.

First of all, from a conceptual point of view, power grid companies like to mention "ubiquitous Internet of Things on the customer side". In fact, this concept itself represents a certain difference in management. Customers are more likely to look at it from the perspective of management and the informationization of the enterprise itself. For example, there are customer relationship management systems (CRM) and customer information management systems (CIS, i.e. marketing systems), which are an inside-out perspective. From the perspective of the power grid, the inside refers to the inside of the power grid company, and the outside refers to the outside of the power grid system. Employees of power grid companies like to say "how are the power sales companies in the market?" In fact, they unconsciously put themselves in the position of the natural monopoly link to look at market competition.

As a market-oriented service company, we talk more about the "power consumption side" and "users". The essence of comprehensive energy services is "power consumption and energy services". This is an outside-in perspective. The outside is the market and industry trends, and the inside is the internal of corporate users.

Secondly, the services on the electricity consumption side can reflect the core competitiveness of enterprises in the future. Energy To B service is a very difficult business. If it is so easy to do, then GCL and ENN, which have the strongest market capabilities, could have replicated it in batches long ago. The current situation is that everyone is struggling to explore on the electricity consumption side. Moreover, even GCL and ENN are more likely to deploy distributed energy and microgrids on the side of the park close to users. This path is the path of most heavy asset energy companies, including the five majors and power grids. Why is this so? Because it is too difficult to break through customers. This is not as easy as running away and investing. The closer you go to the customer side, the lower your posture should be. The more you have to compete in the operational capabilities of To B business, segment market demand, analyze customer pain points, make decisions and marketing, iterate profit models, and polish platform functions. Every link is hard work. Little do people know that most of the current market-oriented cloud platforms, which are said to be cloud, big data, Internet of Things, mobile, and intelligent chains, are either not found at the core of the business model, or rely on selling hardware to make a profit. Even listed companies are like this, and it is understandable that power grid companies can't find the north.

Finally, why is it so difficult to achieve ubiquity on the electricity consumption side? Because no one makes money, the platform does not make money, and the electricity sales companies and service companies that use the platform do not make money either, because everyone is extensive. So what we have been doing is not only considering our own profit model, but more often helping partners design and polish their profit models. Only when they make money, can the platform make money.

4. Clarity of positioning is an accurate judgment of the market

For power grid companies, they should also understand who their customers are, who their customers' customers are, what the supporting relationship is in the entire industrial chain, how to improve the marketization level of each link, and how each link makes a profit. Personally, I think if power grid companies directly face end users, it is not actually a "platform" business model.

So when we started our business, we took a lot of detours, from equipment operation and maintenance at the beginning, to trying to provide electricity sales services later, and then looking at incremental distribution networks, energy-saving services, etc. In the end, we found that in terms of the market, customers, policies and other aspects, the marketization of electricity sales is not so optimistic, energy-saving services are very difficult, and incremental distribution networks have not yet become popular. For now, the real opportunity to try ubiquitous and SaaS platforms may be to return to equipment operation and maintenance. This business may seem unremarkable, but on the one hand, our team has been engaged in power production management for a long time, and equipment operation and maintenance is our old business; on the other hand, equipment operation and maintenance is a necessary work content for every power user, and the current level of marketization is very low. More importantly, this is a marginal business that no one has looked down on in the past, and it is precisely the marginal business that has the possibility of "surrounding the city with the countryside".