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ADAPTATION OF CLOUD
BASED SAAS
APPLICATIONS
POWER UTILITIES
Whitepaper
ii
INTRODUCTION 3
1. NOTION OF SAAS ON CLOUD 4
2. KEY DRIVERS & BENEFITS 5
3. ECONOMICS OF CLOUD BASED SAAS 8
4. KEY FEATURES OF CLOUD BASED SAAS 9
5. SAAS PROCUREMENT MODEL FOR UTILITIES 11
6. EVALUATING WHAT US BEING PURCHASED 12
7. SERVICE QUALITY METRICS 14
8. POTENTIAL SAAS APPLICATIONS FOR UTILITIES 16
9. CONCLUSION 17
Cloud based SaaS Application Adoption by Power Utilities
Whitepaper
3
INTRODUCTION
Modus operandi of power generation, distribution and consumption are undergoing a major
transition. The concept of electricity generated at large power plants and then transmitting to
customers via transmission and distribution system has sustained significant changes. Power
generation now happens more closer to the load using smaller and a larger number of distributed
power generation units made the way to dramatically change the infrastructure toward an
extremely connected grid with two-way power flows. Consumption and availability of power have
also undergone changes by the rapid changes in energy storage technologies and upsurge in
EV charging vehicles on the ground. However, this causes a control problem to the distribution
companies and new methods of operation must be developed and implemented which should
consider data from the very large number of field assets to adopt changes in the electricity grid
characteristics.
The Current evolution of the grid will result in the evolution of traditional utilities - consumer
relationship into a more dynamic relationship and interaction like prosumer-to-utility, prosumer-
to-consumer, consumer-to service provider, unlocking many new technologies and business
model. Changing customer needs, evolving policy and regulation, and accelerating innovation
around distributed energy resources (DER) and digital technology will drive the creation of more
distributed transactions and dynamic business models. These developments will also spur a
more democratized and sophisticated grid platform and a rapidly evolving ecosystem of
incumbents and disruptors.
Over the past decade, communications technology has progressed at a phenomenal pace which
is helping in connecting large numbers of devices and sensors with the data center. With the
introduction of cloud technologies with big data, Artificial intelligence (AI) and machine learning
(ML) handling of larger number of data set and using it to derive well informed and well thought
out decisions is a must-have to handle these complex scenarios.
Cloud based SaaS Application Adoption by Power Utilities
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1. NOTION OF SAAS ON CLOUD
Cloud-based software applications allow software providers to access a large pool of elastic
infrastructure resources such as compute power, storage, connectivity and many more services
that can be scaled up or down depending upon usage needs and demand. These applications
are generally offered as Software as service, which is either deployed on public cloud
infrastructure. Decision to go with the type of deployment depends on what works best for the
application scenarios. On-premise software is installed and maintained through end user
company hard drives and infrastructure and this to manage and maintain the entire system.
While in case of public cloud deployment, Managed SaaS provider manages entire lifecycle of
the system and software including onboarding, which includes performance, maintenance,
upgradation and security.
Due to innovative information technology services delivery model, and strategic business value
to enterprises, interest for Cloud computing is found to be accelerating for enterprises
Cloud based SaaS Application Adoption by Power Utilities
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2. KEY DRIVERS & BENEFITS
Ready to use /low time for adoption On-premise software implementation is not only a long but also disparate process. Unlike on-
premise, SaaS application is already installed, configured. The user has the create a new user
account in the cloud and in a couple of hours and have the application ready for use. Using a
cloud-based software reduces the time spent for installation and configuration and hence can
get away from the issues that can arise during the software deployment.
With the use of SaaS services in utilities, the day-to-day management tasks can be reduced
considerably enabling utilities to gain more benefits from their smart grid systems
Reduction in Capital Investment The budget would be another critical trait to decide on on-premise or cloud-based deployment.
One of the obvious differences between on-premise and cloud SaaS is the cost. All the costs
associated with the server and infrastructure are covered by the company providing the SaaS
application. Cloud SaaS is on a subscription base, meaning utility must pay an ongoing
subscription fee. On-premise includes a one-time perpetual license fee upfront. The subscription
model allows having flexible payment mechanism by paying out on monthly or quarterly or
annual subscription periods, whereas in case of on-premise deployment with license fees utilities
must pay out lump sum one-time amount. This allows utilities to manage the cash flow and gross
profit margin,
Power utilities are adopting SaaS services in growing numbers to take benefit of reduced
execution and operational risk. Typically, SaaS services offer the customer with a 20 to 50
percent operational expense saving with a lean in-house IT team Another reason behind the
increased popularity of SaaS services is that usually, the service providers are willing to offer
flat, fixed-price annual fees with a cap on pricing escalation for long-term contracts. Long term
contracts ensure predictable price for SaaS for the utilities at the same time helps the SaaS
service providers guaranteeing with long term business visibility.
The Total cost of Ownership By using SaaS, companies can save on the human resources that are usually required for
servicing the IT infrastructure and software applications and result in reduction of overall
operating expenses (OPEX). With on-premise software, the onus is on the utilities (specifically,
IT department) to maintain the upkeep of the software. That is a big responsibility for an IT
department to have because of potential issues that could arise and having to work quickly to
support and solve them.
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Updates & Security SaaS providers upgrade the solution, and it becomes readily available to the customers. Effort
and costs associated with upgrades and new releases are much lesser than the traditional model
that usually forces the user to buy an upgrade package and install it or get charged for
specialized services for the software upgraded.
Security is also another topic for the IT team to handle. SaaS provider typically has a stronger
end to end security measures. Cloud SaaS relieves the utility IT department of stress and
maintain a smaller well-equipped team to supervise and audit SaaS providers.
Best-practice for backup, security and recovery procedures are available on-demand from the
SaaS provider.
Scaling For applications which collect data over time from field devices or sensors and from legacy
operation infrastructure, the need for scaling the application is quite common. The main
advantage offered by cloud-based SaaS is the application scaling which gets handled by the
SaaS provider. The cloud based infrastructure support allows the installed applications to scale
up whenever required for example when system detects usage increase automatically software
will utilize backend un-utilized resources to share the extra load, so that overall performance of
the application will not get affected. When the need for scaling the application arises with on-
premises software, the company needs to bear the costs and time associated with the upgrades
in hardware and software.
Freedom from software On-premised deployments provide ‘freedom with the software’ and have the flexibility to build
customizations. However, this will take out ‘freedom from the software’ by regularly managing
and maintaining the system. For utilities who want to focus on the core business goal, it’s always
best to go with freedom from the software model.
Usage Flexibility SaaS offerings are easy to use since they already come with best practices and systematic
operating procedures. Users can utilize the different environment setup to test the new
upgrades, or new features with our affecting the production environment. In addition, users have
flexibility to do a proof of concept without going for a mass deployment purchase. s. Also, they
user can have more than one instance of same application with different versions and do a
smooth migration considering the migration dependency with the external nodes such as energy
meters. Even for large environments, users can use cloud-based SaaS offerings to test the
software before going to production using a test or staging environment which will be isolated
from the production instance.
Cloud based SaaS Application Adoption by Power Utilities
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Future proofing Cloud based SaaS lowers the risk of technology obsolescence as software providers keep on
upgrading their backend technologies to stay relevant in market. While in the case of on-premise
software, technology upgrade is purely driven by utility inhouse policy, budget etc. In some
cases, on-premise software has to be obliterated completely and implement from start.
Effective Data Analysis Installing smart grid solutions and advanced metering solutions are going to be an incredible
change in the energy industry. However, in the absence of proper analytics tools, it will be difficult
to decipher your client information correctly when there is an increase in the amount of data
items collected per month, per meter. Cloud SaaS platforms are highly effective to enhance the
ability to access and manage that data, in real-time, with no delay.
Cloud based SaaS Application Adoption by Power Utilities
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3. ECONOMICS OF CLOUD BASED SAAS
This section describes a comparative study of economics and value provide by Software as
product and cloud-based Software as Service. In case of On-premise product, most common
scenario is the license purchase where customer purchase the license of the software. During
software usage customer can avail any minor updates free of cost while major updates requires
purchase of upgrades. Major updates usually have larger value with new or enhanced features.
In addition to software cost, customer also have to pay for ongoing infrastructure maintenance
and training cost required for the inhouse team.
Capital and maintenance cost of the software as product are provided below
In case of Cloud based Software as service, customer just need to pay a recurring fee to avail
right to use the software. This also provides flexibility to subscribe for longer period with
discounted rate as well as customer can discontinue the service whenever required which is an
added benefit in terms of vendor lock-in. With the subscription model, customer will automatically
get all major and minor software update.
Below figure shows the comparative study of total cost ownership for the software as product
and cloud-based software as service which clearly signifies cloud-based software as service is
better than license-based solution.
License Cost of Product Maintenance & operational cost
TOC for Software as Product TOC for Software as Service
Cloud based SaaS Application Adoption by Power Utilities
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4. KEY FEATURES OF CLOUD BASED SAAS
Cloud based SaaS is a computing model for enabling ubiquitous, convenient, on-demand
network access the computing resources. There are many other services and features of
cloud computing which will be discussed in this session.
Resource Sharing
Utility cloud SaaS provider make use of available computing resources to provide services
to multiple utilities using multi-tenant design model of the software. Means the all the
resources of each utilities are virtually contained and deployed on the same or multiple
physical machines. This gives flexibility to utilize all the physical resources depending upon
the demand of the customer automatically.
Ease of access & usage
The user can access all services and data from cloud from anywhere just with the help of a
device and an internet connection. These capabilities pulls-out any dependency with the local
installed in user PC or mobile.
Service Tracking
Cloud based SaaS software automatically analyzes the data needed and supports a metering
capability at some level of services. So that utility can monitor, control, and report the usage.
It will provide transparency for the service provider as well as the customer.
Disaster recovery
Cloud based software should have the capability to recover from the infrastructure failure.
Means location zone where software has installed has been failed due to any natural or
unnatural causes should not affect the availability and functionality of the utility system.
Disaster recovery center located at remote location zone shall take over all the workload and
make sure services are available to utility.
There shall be provision to take regular backups from primary zone to disaster recovery zone.
Using storage-based replication; full backups as well as incremental backups should be
synced with the disaster recovery zone. So, in case a disaster strikes, and the primary zone
goes down, DR feature will bring up this disaster recovery zone system with the database
backups.
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Security
Earlier, security was the major concern that hindered utilities to move to cloud-based SaaS
solutions. However, with time and technological awareness, this became a myth and now
SaaS services which are designed to operate at an enterprise level have better security
policies, certification, and procedures.
Cloud based SaaS Application Adoption by Power Utilities
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5. SAAS PROCUREMENT MODEL FOR
UTILITIES
The procurement process for enterprise solutions whether its software or hardware or combined
have undergone a considerable reformation as more and more SaaS based products are
available in the market for various co-operate functions. Traditional procurement process of the
utilities must define the software which need to be procured and they are also supposed to figure
out solution for below points on,
• Where to host the software purchased?
• Who will install the software?
• What is the resource required in devices?
• How many licenses is required and who is going to support the software.
With the influx of cloud-based SaaS model, procurement team need not worry about above
strains. Software provider is hosting the software and will take care of installation and
configuration of the software. While on-premised solution would require IT involvement for initial
setup or integrations with existing systems, many on-premise solutions are supported by the
department that deploys them and/or the company that provides the software. In-house utility IT
teams generally provide minimal support. SaaS has changed the way companies buy software.
What was once a painful, long, and cumbersome list of check gates and toll bars has become a
quicker and simpler process that empowers you to get solutions in place rapidly and manage
change faster.
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6. EVALUATING WHAT IS BEING
PURCHASED
Purchase decision for cloud-based software product is not the same as traditional on-premised
one. There are quite a few unique traits which should be considered while buying a cloud-based
software product. In this section, lets discuss on the top traits to be considered while evaluating
and going ahead with purchase decision.
Functionality Obvious to consider whether the evaluating product would provide exact solution for the
problems considered. For which there shall be clear definition of the problems you are facing
and a list of must have features would help in concluding the software.
Performance & Transparency As cloud product, there will be flexibility of starting from small. So, it’s better to do a fully
functional proof of concept or trail sign up- considering a few sample locations or assets to
evaluate the software effectiveness. POC can also evaluate support and training options offered
by the software provider. The level of support and service a SaaS vendor must provide is best
defined in a service level agreement, or SLA. Before buying a SaaS product, ensure that you
understand clearly – and are satisfied with – the responsibilities of service on the vendor. There
shall be an SLA which covers the performance required of the vendor, how its monitored, and
with MTTR (mean time to repair) any issues.
Security Other criteria would be the security features and data backup plans offered by the software. As
a utility all the data which is collected from the assets as well as analysis data are critical and
cannot afford any breach as electrical grid is a critical infrastructure of the country. So, security
features available in the product is something which need a serious consideration.
Its critical to check the security policy of the software provider along with the software security.
It’s worth to check the accomplishments and performance of the software provider to make sure
you have long term commitment with good service and genuine support.
Cloud based SaaS Application Adoption by Power Utilities
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Availability Availability of the software and data shall be measurable, demonstratable acceptable for the
utility to ensure that uptime of the system meets the expected operational and business
requirements.
Flexibility Flexibility of the software also need to be considered; means it shall be able to work without
changing the utility current process and existing systems. So, consider whether the software will
be able to integrate with your existing systems and strategies. Consider the long-term goals of
the business, and whether the software will be able to fit in and grow with it.
Exit Policy & Data Backup It shall be possible to discontinue the service whenever required without any financial and
security implications. Need to consider validating the exit clauses of the software provider and
make sure there is proper mechanism to withhold the custodianship of the data. All data which
can be exported out shall be in generic and mutually agreed format in order to mitigate the risk
of vendor lock-in.
Regulatory
Ensure that software provider comply to the local regulatory policies including but not limited to
the accreditation, permissible location, and data control if utility want to store restricted data such
a meter or relay passwords etc.
Financial
Financial evaluation is the last step of the process. Transparency in the billing qualifiers and
option to monitor the usage of the qualifier is a must to have feature for cloud-based SaaS
offerings. For large scale deployment, utility shall also check the final cost of the solution by
extrapolating the cost of POC and check if the solution is financially viable for the large-scale
deployment.
Cloud based SaaS Application Adoption by Power Utilities
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7. SERVICE QUALITY METRICS
Availability
Average downtime for a given period. Period can be week, month or year. Measurement points
for consideration can be availability or data, devices, integration points in addition to the entire
system availability.
Reliability
Reliability of a system or components are normally expressed as Mean Time Between Failures
(MTBF) and Mean Time to Repair (MTTR). While non-repairable issues are expressed as Mean
Time to Fail (MTTF). Mean time between failure (MTBF) is the average time that a software or
system functions before failing. This denotes only the operational time between failures and does
not include any repair times. Mean time to repair (MTTR) is the average time required to fix a
failed software or systems and get it back to production.
Response time
Response time provides a clear view of the overall performance of the cloud software. Its defined
as time a software will take to complete an action or work after the request e.g., Requesting for
data from field devices, requesting for data computation and calculation for data analysis etc.
Security
Because of the cloud’s very nature as a shared resource, identity management, privacy and
access control are of concern. Security in cloud technologies is the set of control-based
techniques and policies required to adhere to regulatory compliance rules and protect
information. Cloud security threats can be categorized as such: Security standards, Network,
Access control, cloud infrastructure and data
Bandwidth & Latency
Adequate bandwidth is critical to ensure all applications are operating with optimal efficiency.
There are a few utility applications which bandwidth is critical factor e.g.: Meter Data acquisition
system, asset monitoring system etc. It’s usually expressed in megabytes per second for data
transaction use cases for web server use cases its expressed as number of concurrent users
supported by the software application
Cloud based SaaS Application Adoption by Power Utilities
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Support effectiveness
This is the measure of effectiveness of the software provider support to solve an issue. Usually
its measure in the average time taken to solve a support ticket.
Scalability
Last but not the least, Scalability of the system is another critical metrics for a cloud-based
software solution. It’s important to evaluate in order to determine whether a system can handle
large number of devices or data sets concurrently. Its measure of ability for which cloud software
can support without failure. Scalability are usually measured in terms of number of device and
data software can handle or number of users with available backend resources.
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8. POTENTIAL SAAS APPLICATIONS FOR
UTILITIES
Following are the list of possible SaaS application which power utilities can kickstart with:
• Meter data acquisition & smart metering
• Meter data management & Billing
• Asset monitoring & management
• Generation and Transmission performance optimization
• Fault file collection and root cause analysis
• Network design and power flow studies
• Customer management
• Network management
• Mobile work force management
• Analytics
• Data storage & Historian
.
Cloud based SaaS Application Adoption by Power Utilities
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9. CONCLUSION
For any business problems, Cloud based SaaS model provides the fastest deployment of
best in class solutions at lower investment which meets exact functionality requirement with
cutting edge capabilities in make that business sustainable for longer time.
Cloud technologies has introduced remarkable opportunities for utilities to transform how
they grow the business, serve customers with innovative offerings and services. Cloud based
technologies unlike traditional system has the potential to redefine the business definition for
the utilities.
The following takeaways will utility success over longer period:
Cloud based SaaS solution is better than traditional on-premise software solution both
economically and technologically. Cloud SaaS enables utilities to focus on electrical grid and
explore more business models and services which can generate revenue.
Utilities across the globe have already started exploring new services and business models
to stay relevant in market. Proactive adaptation of technology which can solve these multi-
dimensional issues is critical for utilities to stay focused and relevant.
Utilities must be prepared to integrate with networks of assets, users, and strategic partners
to delivery augmented value even if all these entities are not directly related to electrical grid.
To achieve this utility, must open and integrate with strategic solutions like building
management system, storage, microgrid and others without compromising on the security
and grid resiliency.