How an IoT Smart Device Is Expanding British Gas’ Business Model

Loraine Lawson
Slide Show

Mobility: How It's Changing Our Lives

British Gas CIO David Cooper says it isn’t the cost savings that won him over with Hadoop. It wasn’t even the scalability. What made Hadoop a winning choice for the UK utility firm is Hadoop’s ability to answer “what if” questions.

CIO UK recently interviewed Cooper, who ranks among the site’s top 15 in the CIO 100 this year. While the article focuses on Cooper, it also explains how Cooper fine-tuned the company’s data infrastructure to support its Internet of Things (IoT) product, Hive.

The British Gas Hive has nothing to do with the Apache Hive Query Tool, by the way. This is Hive Active Heating, a smart home device that connects heating and hot water tanks to the Internet. It allows customers to control their energy use via a smartphone or other mobile device. Initially, it began as a response to a UK energy sector mandate requiring adoption of smart meters within six years.

Hive, smart meters and field workers generate enormous amounts of data. The company uses Hadoop to process this data. Cooper also opted for PowerBI and Qlickview, which allow users to do more of the work themselves. He also moved about 50 percent of the company’s architecture to the cloud, the article notes. Cooper also steered the company toward Red Hat’s open source architecture, rather than its legacy UNIX, in order to support the data center transformation and adoption of cloud.

It’s worth noting that Hive was established as a separate brand from British Gas, so consumers can buy the device even if they aren’t British Gas customers. Forty percent of early Hive or Nest adopters use their apps at least once a day, the article notes. The company estimates that Hive could save users as much as £150 ($242) per year, the article states.

It doesn’t take an MBA to see how that could create a conundrum for British Gas: By saving customers money, they’re reducing their own potential revenue. Of course, that’s not an unusual predicament in utilities, given the worldwide need to reduce energy consumption and shift to renewable resources.

As Cooper describes it, Hive seems to address that problem. First, it may help restructure the way companies charge for energy in ways similar to those already tested in the U.S., he said.

“It is the peaks that are hurting the grids. We can see economies as the Internet of Things grows, from different tariffs to promote a change in usage pattern, such as cheaper rates at the weekends,” he told CIO UK.

Second, Hive is expanding the business model. It’s seen as “one of the engines to drive the business forward,” he said. It may also help establish British Gas as a trusted source for other new energy-efficient products, opening up new lines of revenue in the future.

Cooper’s interview shows just how disruptive Internet of Things devices — and the data that streams from them — can be.

Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.

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