People and Events
IBM's David Samuel Looks Ahead, Energy-wise
By Bruce E. Phillips
Dec 14, 2003, 17:08

David Samuel, general manager of IBM Corporation's Global Energy & Utilities Industry market segment

David Samuel spends a lot of time thinking about the future, especially about the future of the gas and electric utilities that power our industries and enrich our lives. As general manager of IBM Corporation's Global Energy & Utilities Industry market segment, it's Samuel's job to help ensure that America's gas and electric utilities will continue to be a source of reliable and affordable energy long into the future.

Samuel leads a world-wide customer group that develops and sells solutions for the business problems that are faced by electric, gas, and wastewater management utilities. Working with outside partners who develop software, IBM integrates this software with hardware. Through its teams of consultants, the company will even install and operate the solutions.

"It may not be well-known," Samuel says, "but IBM generates 60 percent of its revenue from services, not hardware. We provide more value to customers by integrating hardware with software."

Samuel believes the greatest challenge today for domestic utilities is to find operating areas where they can reduce costs and improve utilization of assets. One way they can accomplish this, he says, is to improve the way equipment is maintained and replaced.

"Utilities are asset-intensive," he says. "Initially, utilities only corrected or repaired an asset after it was broken. Then they adopted preventive maintenance, making repairs on a time schedule before equipment failed. This was an improvement over the past, but it also results in fixing things that aren't broken or replacing parts that are still useful. Now, the trend is toward what is known as predictive maintenance: knowing in advance what the state of equipment is and taking it out of service just before it breaks. This allows utilities to get the most out of the asset."

Utilities today aren't as close to equipment problems as they, or customers, would like. It is likely, for example, that your electric company doesn't know about your power outage until you call them. Intelligent metering, called "distribution automation," will report and pinpoint power outages automatically.

Pressed by rising costs and competitive pressures, Samuel says, utilities are eager to increase productivity by using new technology to maintain far-flung assets. For example, he says, utility field crews are productive less than 50 percent of the time. The remaining 50 percent is spent planning what needs to be done and traveling to work sites. About 25 percent of total crew work time is simply wasted because workers are in the wrong place with the wrong tools to get the job done.

As Samuel told us, "Industry is seeing that effective use of information technology makes them more competitive. If you increase productivity to 55 percent from the current 50 percent, that means millions of dollars in profit to the utilities."

Utilities now have the technology for "time-of-use metering," real-time tracking of consumer demand. This eventually could result in reduced costs for consumers by providing discounts to those who agree to delay some usage — say to run dishwashers or clothes dryers — until off-peak hours, much the way telephone companies charge less for calls made on evenings and weekends.

Also in the works is development of better thermostats that will show customers what it is costing them to use gas or electricity at any given time, enabling them to make informed decisions about when or whether they should shift power use to less expensive times.

And improved information technology is finding its place in the field as well as the home and factory.

"We are embedding sensors into assets that measure viscosity and other predictors of failure," he says, "which means for gas pipelines, for example, we can measure the integrity of wall space within pipes to determine their condition."

Utilities now are looking into embedding technology into an electric grid to provide a better balance between supply and demand.

"This can result in more stable pricing and minimized blackouts," he points out, a situation which benefits utilities and consumers alike.
Samuel believes competition must evolve within utilities but that this can't happen until there is a known market.

"That's why IT is so important. It allows people to measure the dynamics of supply and demand. When supply is matched with demand, intelligent pricing decisions can be made," Samuel says.
To learn more, see www.IBM.com/industries/utilities.