AMAZON JUST BROKE INTO HEALTH CARE. IS ENERGY NEXT?
Technology is omnipresent, but there are still a few apps and services that would be missed if they disappeared. If you could no longer order shampoo, toothpaste or a television for delivery within a day or two, you would notice. The same for no longer being able to watch almost any movie ever made with the click of a button. So if Amazon evaporated into thin air, life would be very different.
Last year, the tech retail giant announced it would partner with Berkshire Hathaway and JPMorgan Chase to create a new venture aimed at using big data to lower the rapidly growing costs of U.S. health care. Amazon’s foray into the health sector, an essential industry, raised the obvious question: What would happen if Jeff Bezos’ behemoth made a play for other essential industries?
Austin Whitman, vice president of energy markets at FirstFuel Software, speculates that the utility industry could be next. After working in the clean energy space for over a decade, Whitman believes the world needs more analytics and intelligence when it comes to energy consumption. To get ahead of an Amazon disruption, energy stakeholders should consider how this would affect the industry. Whitman shared his thoughts with OZY.
WHICH UTILITY SECTORS IS AMAZON MOST LIKELY TO GET INVOLVED WITH?
It’s interesting to think about what Amazon is doing for health care. It’s a slow-moving, very regulated sector and they’re thinking about how to improve it. There are a lot of parallels between health care and utility. There are a lot of things you can do to provide energy that don’t necessarily mean you own power plants, or the transmission lines and heavy infrastructure. There’s a lot of focus right now on the retail aspect of energy provision, and if I had to guess, I would say Amazon would be more involved in retail innovations. They have a history of operational and logistics innovations — being able to bring you a gallon of milk in two hours, for example — so I think there’s a lot they could do on the retail side.
WHICH UTILITY PROVIDERS WOULD DO WELL TO AVOID AN AMAZON TAKEOVER?
Well, it’s a question of whether Amazon would take over an established provider or become an energy provider on its own. I don’t see any likely takeover targets unless they were to look at what’s called a competitive energy retailer — companies that buy energy from generators and sell it to customers but don’t actually own any of the infrastructure. We’re starting to see more of a split. For example, Pacific Gas and Electric (PG&E) in California wouldn’t send you the bill, it would be sent by another company.
