Smart Grid Revolution Becomes 'Disruptive' for Utilities Worldwide According to New Microsoft Survey

Big changes in business models, information technology systems and energy sources create new norm for utility production, transmission and distribution.

HOUSTON, March 11, 2010 - Only 8 percent of utilities around the world have completed their smart
grid technology implementations while 37 percent have projects underway and
more than half haven't yet started, according to a new Microsoft Corp.
survey.

(Logo: www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO)

The Microsoft Worldwide Utility Industry Survey 2010, released today at
CERAWeek 2010 in Houston, surveyed almost 200 professionals within electric,
gas and water utilities and related companies around the world. The survey
highlights a range of challenges - from financial and regulatory to
technology and return on investment - for utilities already unsure of the
right path to building the smart grid.

"As this study clearly shows, the disruptive nature of the smart grid
revolution, and the innovations it brings, has caught many in the industry by
surprise, including many utilities that already have embraced smart grid
technologies," said Jon Arnold, managing director for the Worldwide Power &
Utilities Industry at Microsoft, who was recently named one of the 100 People
You Must Know in Smart Grid
(www.greentechmedia.com/articles/read/the-networked-grid-100/ ) by
Greentech Media Inc. "Some incorrectly assert that the utility industry is
unwilling to change, but the survey shows the opposite. It's the magnitude of
change to everything from business models to systems that's overwhelming,
especially given utilities' existing asset and technology investments
combined with the need to ensure profitability and reliability."

Distribution Management and Smart Metering Are Critical

The survey shows that utilities professionals and executives perceive
distribution management and smart metering solutions as the most important
technologies for successful smart grid implementations. Integration of
renewable energy sources into the smart grid and consumer energy management
solutions follow closely. However, 63 percent of the respondents in the
Americas think the information technologies available today are not
sufficient to address future challenges, while only 45 percent and 42 percent
of respondents in Europe, Middle East and Africa (EMEA) and Asia Pacific
respectively believe they are insufficient.

"The clear objective is to optimize current power generation and delivery
assets to help utilities improve grid reliability; achieve demand response,
environmental and conservation goals; and avoid unnecessary capital
expenditures," said Julie Hance, vice president of software solutions for
Itron North America, a Microsoft partner. "It will take close industrywide
collaboration - from the smart meter into the home and the smart meter back
to the array of generation sources - to complete this complex task and
achieve a smarter, more sustainable future."

Respondents worldwide cite financial concerns - both costs and return on
investment - as the main challenge to smart grid development. They also cite
regulatory factors as the most influential to smart grid technology
deployment decisions. However, the economic climate is tied with regulatory
factors as the two biggest influencers among Asia Pacific respondents.

The survey reveals that 42 percent of the respondents are currently
incorporating distributed generation sources such as wind and solar on
rooftops and another 25 percent will begin to incorporate these sources in
the next one to three years. Also, by early 2013, half of the respondents
expect to offer time-of-use pricing to all of their residential customers.

Only 8 percent of respondents believe their utility has a technology
architecture that is adequate to support new business processes and new
technologies. To fund all of these investments, 77 percent of respondents
expect their budgets for smart grid technologies to increase over the next
two to three years.

"The inevitability of change combined with financial and regulatory
uncertainty makes it critical for utilities to begin implementing the right
technology capabilities now to meet the challenge of any regulation, energy
source or distribution need in the future," Arnold said.

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in
software, services and solutions that help people and businesses realize
their full potential.

For more information about Microsoft Power and Utilities:

- Microsoft News Center:
www.microsoft.com/presspass/presskits/industries/manufacturing/Default.aspx

- Utilities industry home page: microsoft.com/utilities

- Industry blog: blogs.msdn.com/mspowerutilities/default.aspx

Wendy Grover of Microsoft Corp, +1-425-705-7609, wegrover at microsoft.com; or Carol Barreyre, Brooks & Associates Public Relations, +1-214-629-5157, carol at barreyre.com, for Microsoft Corp.; NOTE TO EDITORS: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft's Rapid Response Team or other appropriate contacts listed at www.microsoft.com/news/contactpr.mspx.