One of the biggest challenges that utilities will face in the next ten years is the need to either upgrading or to replace their Customer Information Systems (CIS) and billing systems. Although the process of either upgrading and or replacing the CIS and billing systems is a costly and time consuming and not to mention risky process, utilities cannot afford to shy away from doing so eventually. While a number of utilities are playing the waiting game, several others in recognizing the business opportunities that this can present, have decided to go ahead and make the requisite changes.

An absolute necessity for integrating smart grid technology with upcoming energy generation technologies and avenues within standard regulatory structures is to have strong information systems capable of managing data feeds from smart meters and demand response (DR) programs. The Pike Research has stated that a total of more than $4 billion in business opportunity will be facilitated through CIS transformation while up-coming CIS solutions will reach out to 89 million customer meters by 2015.

Although utilities have no option but to deploy CIS transformation if they want to keep abreast with smart grid technology implementations, they are being held back by currently used equipment and softwares that are in most instances outdated.

In a release, Eric Woods, Senior Analyst, said, "The near-term impact will be felt by the larger players, mainly because they tend to be located in states that are more advanced in terms of market deregulation. Many of these large utilities have already been involved in deep IT upgrades over the last five years, including large-scale data center renovations."

Within the United States, the accelerated move for the implementation of CIS and billing upgrades and replacements will lead to a competitive frenzy as Customer/1, the system currently in use is already a phased out option. As an increasing number of smart grid utilities make the shift from their Customer/1 systems, software companies such as SAP (News - Alert) and Oracle will move in rapidly to fill the void. The Pike Research indicates that SAP and Oracle will by the year 2015 control 43 percent of total market share while Telecom service providers will capture 17 percent.