Unifying on-premises, edge, and cloud data with Microsoft

As utilities adapt to increasing electrification, grid modernization, and the expansion of distributed energy, traditional operational technology (OT) environments are being pushed beyond their limits. At the same time, utilities and energy providers must navigate an increasingly complex regulatory landscape, from data sovereignty requirements in Europe to cybersecurity mandates like North American Electric Reliability Corporation Critical Infrastructure Protection (NERC CIP) and General Data Protection Regulation (GDPR).

While cloud adoption is accelerating, many OT systems, such as Supervisory Control and Data Acquisition (SCADA), Energy Management Systems (EMS), Distributed Energy Resource Management Systems (DERMS), and Outage Management Systems (OMS), require hybrid architectures to ensure operational continuity, compliance, and secure integration with real-time grid control.

The challenge is clear: how do energy providers unlock the full potential of the cloud while helping to ensure mission-critical operations remain secure, resilient, and interoperable with legacy infrastructure?

Adaptive cloud: The bridge between IT, OT, and AI-powered intelligence

The Microsoft adaptive cloud approach provides a seamless, scalable, and secure framework for unifying on-premises, edge, and cloud environments. Rather than forcing a one-size-fits-all migration to the cloud, the Microsoft adaptive cloud integrates IT and OT seamlessly, bringing together on-premises control systems and edge intelligence with cloud-scale analytics. Instead of forcing a binary choice between on-premises versus cloud, adaptive cloud supports energy providers to:

• Integrate on-premises systems with cloud-driven intelligence while meeting global compliance and sovereignty requirements.
• Utilize complex AI algorithms and real-time data streaming to unlock operational efficiencies, increase resilience, and enhance reliability.
• Strengthen cybersecurity with built-in Zero Trust protections and industry-aligned security frameworks.
• Support edge computing for localized grid control while harnessing the cloud’s computational power.

At Microsoft, we’re working with energy leaders around the world to implement this adaptive cloud approach that unites and integrates siloed teams, distributed sites, and operational systems into a unified model for operations, security, applications, and data. With a foundation built on Microsoft Azure and spanning more than 60 public cloud regions, our approach supports energy providers to utilize cloud-native and AI capabilities across the enterprise while bringing together IT and OT systems to accelerate energy production and help teams manage increasingly complex environments more efficiently.

Meeting growing demand while driving critical efficiencies

As population growth and rapidly changing markets continue driving demand for energy, industry leaders are faced with immense pressure to not only provide secure, equitable, and sustainable energy, but to optimize every aspect of business for continued growth. The Microsoft adaptive cloud environment sets the stage for critical improvements that help energy companies keep up with demand without overextending their own resources. These improvements include:

• Secure integration of cloud AI with critical OT systems. Many grid control systems such as SCADA, EMS, and DERMS must interact with real-time operational data while helping to ensure security and compliance. The Microsoft adaptive cloud supports these systems to securely connect to cloud-based AI and analytics without disrupting mission-critical workflows.
• Enhanced security. The increasing sophistication of cyber threats makes security a non-negotiable priority. Supporting an adaptive cloud-based environment is a critical step in improving security measures and allowing quick responses, helping to ensure that energy systems are protected against evolving cyber threats. Real-time OT and IT threat detection is an imperative going forward.
• Faster data analytics. Energy operators require high-speed decision-making, but traditional OT systems often rely on static models that struggle to adapt to real-time fluctuations. Running enterprise systems in Azure facilitates faster, more informed decision-making based on real-time data and supports cloud-based, high-speed analytics that ingest, process, and visualize terabytes of operational data from the grid. These data-driven insights can be applied to predictive maintenance, which helps reduce unplanned downtime and mitigates related operational expenses. Applying AI capabilities on top of analytics can supercharge the value of enterprise data, saving time and empowering decision-makers with actionable information.
• Compliance with global regulatory and data sovereignty requirements. Energy companies navigate a complex web of regional regulations, including:
  • NERC CIP (North America)—critical infrastructure protection for utilities
  • GDPR (European Union)—data privacy and protection regulations
  • Schrems II Ruling (European Union)—restrictions on data transfers from the EU to third countries
  • ISO 27001 & IEC 62443—international cybersecurity frameworks for industrial control systems

• Edge computing for low-latency control and decision-making. Certain grid operations require millisecond response times, making local processing at the substation or field level critical. Adaptive cloud allows real-time decision-making at the grid edge while still syncing with cloud-based AI for broader optimization.
• Increased scalability and flexibility. An adaptive cloud also supports energy providers to remain agile with changing demands and adopt new technologies that can easily integrate with current infrastructure investments.

Global energy leaders unlock new value with Azure

Microsoft collaborates with energy customers to unearth insights that help them make better, faster decisions and optimize efficiencies across the enterprise. For many, that starts with introducing cloud solutions that make it easier to collect and organize data. But data regulations, legacy on-premises systems, and a growing number of applications to manage are just a few challenges that pop up along the way. Below are two recent examples of how Microsoft has worked with energy leaders to address these and other challenges.

Uniper: Standardizing IT and OT with a hybrid cloud strategy

Uniper, the world’s largest power generation company, wanted to introduce cloud solutions but faced strict regulations around where certain applications could operate depending on the type of data involved, making it difficult for the IT team to manage all applications in a uniform, secure way. Their solution:

• Microsoft Azure Arc and Microsoft Azure Monitor created a single dashboard for managing applications across cloud and on-premises environments.
• Microsoft Azure Stack HCI allowed hybrid use of cloud services while helping to ensure compliance with European data regulations.

With this adaptive cloud strategy, Uniper can now manage IT and OT environments in a standardized way, launch new services faster, and optimize performance without disrupting critical infrastructure. This translates to launching orders more quickly, bringing new services to market faster, and building new systems with just a few clicks.

Emirates Global Aluminum (EGA): AI-powered edge intelligence for industrial operations

EGA is another energy leader that turned to Azure to pave a path for sustainable, scalable infrastructure. EGA’s on-premises environment couldn’t deliver the level of flexibility needed to manage increasingly complex and data-intensive operations with scalable computing infrastructure. EGA needed a hybrid cloud approach to support real-time AI and analytics across its energy-intensive operations. To address this challenge, the company deployed a hybrid environment managed by Azure Arc. The new environment allowed EGA to connect private cloud services through on-premises datacenters—which host operational data, quality control data, environmental and energy data, and supply chain and market data—with the public cloud. This helped optimize latency, support advanced AI and automation solutions, and offer sustaining commercial savings by applying intelligence at the edge. It also streamlined processing for massive amounts of real-time readings from sensors, machinery, and production lines.

Using an adaptive cloud approach went a long way in helping EGA accelerate industrial AI use cases and improve production processes. The company experienced 10 to 13 times faster AI response time, lower latency, and 86% cost savings associated with AI image and video use cases. They also developed and trained a model on 100,000 images to define and differentiate between what makes a good anode and what makes a bad one, ultimately helping to improve the overall quality of their aluminum production.

An adaptive cloud approach to power a sustainable energy future

As enterprises from across all industries aim to reduce their carbon footprint through more efficient, sustainable practices, there’s little doubt that all eyes are on the energy industry to lead the way. Microsoft is proud to be recognized as a Leader in the 2024 Gartner® Magic Quadrant™ for Distributed Hybrid Infrastructure (DHI), placing Microsoft Furthest and Highest in Completeness of Vision and Ability to Execute. Microsoft offers an adaptive cloud approach and can help energy companies make real progress toward a resilient and sustainable future by setting the stage for significant value-adds like improved data management and generative AI capabilities. Collectively, these improvements help strengthen security posture, simplify management of applications, improve operational performance, and, critically, reduce carbon footprint.

By partnering with Microsoft, global energy providers can:

• Unify IT and OT systems across on-premises, edge, and cloud for seamless integration.
• Meet global regulatory and compliance requirements while maximizing cloud capabilities.
• Enhance cybersecurity with real-time threat detection and Zero Trust protections.
• Scale AI and analytics to energy infrastructure, reduce downtime, and improve efficiency, reliability, and resilience.

By embracing adaptive cloud, energy providers can future-proof their operations, strengthen cybersecurity, and build the resilient energy systems of tomorrow—without compromising compliance, security, or operational continuity.

We’re here to support customers and partners along the way, as we all look to accelerate the energy transition and build a sustainable energy future for the next generation.

Explore more energy solutions and resources

• Read the Microsoft Industry Blogs: Energy and resources to learn about themes and actions critical for energy transition.
• Learn how to achieve more in the energy and resources industry with trusted data and AI solutions from Microsoft.
• Check out the on-demand recording of our recent webinar, AI Transformation in Energy, to learn how data and AI are driving change across the industry.

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Source: Microsoft Industry Blog