All the “smart” grid gear in the world can’t help utilities very much unless they’ve got the back-end software to make sense of the floods of data those smart meters, sensors and other devices are delivering.

But not every utility can afford expensive enterprise data management platforms from the likes of IBM, Oracle, Microsoft or SAP. Some would prefer to buy only those “apps” that target the specific problems they face.

At least that’s the premise that Verdeeco has built its business plan on. The startup with $800,000 in disclosed funding and former executives from Landis+Gyr, Ecologic Analytics, The Weather Channel and big utility Southern Co. on board has set its sights on the iTunes model of smart grid software: sell utilities the songs (apps) they want, rather than forcing them to buy the CD (the software suite) all at once.

Target customers include the country’s roughly 2,000 municipal utilities and 900 electrical cooperatives, which have less money than big investor-owned utilities and face a harder time passing smart grid deployment costs onto customers. That’s slowed their spending in the latest smart grid wave, and made them targets of smart-grid-as-service offerings from the likes of General Electric, SAIC, Aclara and Calico Energy, Lockheed Martin and others.

But Verdeeco CEO Musaddeq Khan told me the startup isn’t trying to beat those giants at the game of installing or maintaining equipment or running network control systems or SCADA services.

Instead, Verdeeco is targeting the data that already exists, but isn’t being used properly, or sometimes at all, he said. For example, the National Rural Electric Cooperative Association reports that about 65 percent of U.S. rural co-ops had smart meter or AMR deployments underway as of 2009.

But some of them are simply dumping the interval data and estimating bills, because they lack the software and in-house expertise to manage it properly, Khan said. That includes decade-old commercial-industrial interval meters, as well as newer two-way communicating smart meters, he said.

Verdeeco isn’t naming its customers at present, though Khan said they include cooperatives in Georgia and the Carolinas, the same states where its Series A investors Atlanta Technology Angels, Auburn Angel Network and Upstate Carolina Angel Network are based.

“Our goal is to give utilities insight into their operations, and giving access across the utility,” he said. “Today, the operations guy has to go to the IT guy to say, 'Can you give me a report on this data?'” which is a slow and inefficient way to manage floods of new smart grid data, he said. “We’re opening it up for everybody.”

On the back end, Verdeeco promises a “secret sauce” approach to aggregating loads of data from smart meters, SCADA systems, customer billing software, weather services and myriad other sources, all without any need for the utility to integrate those functions, Khan said.

From there, Verdeeco’s software-as-a-service platform will analyze, present and store all that data for specific applications, at costs that Khan said will range from $500 to $25,000 per month, depending on the level of service they require, how much data they’re asking the company to manage, and how many “apps” they’re interested in using.

One set of apps will center around metering data validation, estimation and editing (VEE), the process that all meter data management software (MDMS) systems go through to detect and correct for missed or faulty data, Khan said.

Beyond that, Verdeeco has been actively testing out two other applications for its co-op customers, Brian Crow, vice president of sales and business development, told me in an interview this week. Those tests are going on with two customers, one with about 45,000 meters and the other with about 200,000 meters, he said.

The first is centered on "blink" detection and analysis, he said. Blinks are the brief, seconds-long outages that annoy customers by setting alarm clocks to blinking “12:00” settings. But they can also wreak havoc on industrial equipment and IT operations that need uninterrupted power: blinks can shut down process lines and cost companies tens of thousands of dollars per event, he noted. That means utilities want to find out where and how often blinks are happening on their grids, as well as to analyze data from disparate sources to find out why they’re happening and how to prevent them.

The second app centers on transformers, the ubiquitous grid assets that step voltages up and down, Crow said. None of Verdeeco’s customers have transformer monitoring gear installed yet, but they’d still like to pull the data they have to predict transformer failure or degradation, based on such inputs as age of the transformers and patterns of overloading or underloading, he said.

Verdeeco has been working with these customers for about a year, and expects to have some results from their data crunching and analysis work some time later this year, he said. It's hoping for a snowball effect, as apps developed for one client become available for others joining the Verdeeco service, Khan said. Eventually, the company would like to add social media-style interactivity to the service, allowing customer utilities to share how they've successfully managed one or another of the problems that rural utilities tend to face.

It will be interesting to see how Verdeeco's low-cost, back-end approach fares against all the competitors aiming at the same small to mid-size utility market. Beyond the smart-grid-as-service offerings from GE, SAIC and others, we’ve seen a big push from smart grid vendors to add these kinds of data analytics capabilities to their own platforms. We’ve also got IT giants and startups alike promising to tie disparate smart grid data into geospatial modeling or network management platforms. The challenge for all of them will be matching rich and useful data analytics with the right price points for utilities.