Huawei looks to dominate smart grid IoT with the Oracle partnership

Telecoms infrastructure equipment giant Huawei has entered into what it describes as a ‘Power IoT Ecosystem Partnership’ with Oracle, the infamous software slinger. Looking to expand its AMI offerings, Huawei is aligning itself with a software giant, in an attempt to package an end-to-end solution for utilities looking to take the smart metering plunge.

The new partnership is both a huge opportunity, and a little boring. These are slow-moving markets, but ones with big pay-offs when it comes to efficiency savings. Consumers aren’t going to get excited by the news, but for utilities playing the long-game, the promised opex savings are very enticing.

The two companies will cooperate around the sale and marketing of Huawei’s Advanced Metering Infrastructure (AMI) solution with Oracle Utilities’ Meter Data Management (MDM) and Smart Grid Gateway (SGG) products. Oracle recently buffed up its utility offerings with its $532m acquisition of Opower, another software company.

Essentially, the joint pitch from Oracle and Huawei is that these efficiency savings could be far greater when a utility uses their joint offering – reducing opex and improving margins. Utilities are increasingly pursuing such deployments as a way to boost profitability, but governments are also piling on the pressure for AMI and smart grid projects, as a means to reduce carbon emissions.

Oracle’s main offerings in this new partnership are the same key software services and platforms it acquired when it bought Opower back in May 2016 for $532m. Oracle realized that it was slipping behind in the utility space, and needed to catch up. Buying Opower allowed it to quickly flesh out its current suite of applications and cloud services.

The new partnership follows after Huawei and Janz CE announced the first smart electrical meter using NB-IoT in November. Huawei is making a bid to capture the emerging smart grid market and increase the sales of its NB-IoT offerings – a new cellular standard aimed at very low-power IoT applications.

Huawei is looking to play a key role in the NB-IoT metering market, as both a supplier of the silicon inside the meters, and as a provider of the NB-IoT cellular network infrastructure. Its fully-owned subsidiary, HiSilicon, is one of the first suppliers of NB-IoT chips, and its silicon powers the u-blox modules that are found in the Janz meters that were unveiled in November. Riot confirmed that u-blox was using the HiSilicon chips a few months before the announcement.

Huawei’s AMI equipment promises to modernize grid infrastructure to allow for reliable bidirectional networks – meaning that network operators and utilities will be better placed to manage the continued growth in adoption of renewable energy generation technologies such as solar. These platforms give utilities the ability to bill customers at hourly rates, and even switch off connections if bills are not paid on time.

The addition of systems like Oracle’s MDM software can provide end-customers with breakdowns of their usage, and how it compares to other customers in the same area. That gamification is a powerful incentive, and helps encourage the customers to use less electricity, through the use of IoT technology in the home and in the grid.

The other significant capability of Oracle’s MDM software is increased efficiency for utilities. Oracle estimates that any utility using its MDM software would be able to make efficiency savings of around 3% across its whole network – just from using the software, and not necessarily other AMI components.

As a Chinese company, Huawei is well aware of its home-nation’s desire to combat air pollution. Renewable energy generation is a core component of this government strategy, but improving overall grid efficiency through smart grid penetration is another method.

Consequently, we expect to see strong domestic Chinese demand for AMI systems like Huawei’s – and with the home-field advantage, it seems likely that it will take the lead in this market in China. Huawei is also the largest manufacturer of solar inverters in the world.