Energy Management - Business Case

1 Supporting the Distributed Energy Management Market: A CA Technology Approach

Supporting the Distributed Energy Management Market A CA Technologies Approach Table of Contents

1. Executive Summary 2. Energy Management – a Quick Background 3. Notable Trends 4. A New Energy Model 5. Laying out an Energy Management Program 6. Value Propositions 7. Laying out a Platform Strategy 8. Approaching the Market 9. Going to Market - The CA Opportunity 10. Going to Market – Defining the Key Business Drivers 11. Going to Market - Building the Architecture 12. Going to Market - Laying out a CA Product Opportunity Roadmap 13. Conclusion

CTE Adjunct Project Team Gladys Beltran

Serge Mankovskii David Messineo

CTE Adjunct Project Advisor

Jason Davis

August 31, 2010


1. Executive Summary In the past few years there has been considerable effort made by governments worldwide and the industry at large to rationalize the level of energy production and consumption. Within the past couple of years, the level of effort to be “green” has increased significantly. We belief there exists an opportunity by CA to exploit new regulatory reform by partnering with Energy Management companies, Energy Management brokers, and Energy consumers. The crux of this opportunity, from a technology perspective is to assist these three key stakeholders in achieving the following:

Identify, optimize and manage energy consumption patterns

Manage energy generation infrastructure by building an effective orchestration platform for adopting and supporting new services and the resources required to deliver them economically

Manage the packaging of energy through various brokerage activities In weaving these three objectives together it is our proposal to build a set of capabilities that accomplish the following:

Provide a platform for energy accounting

Provide a platform for reliable metering, monitoring and management energy usage

Provide a platform for holistic IT governance

Provide a platform for adopting infrastructure changes quickly and minimal risk

Provide a platform for a customer support center that manages customer expectations

Provide a platform for adopting new configurations and bi-directional communication We believe CA has the ability, through strategic partnerships, and proper development investments, to retrofit and/or update a set of tools, that would be attractive to the market. Our conclusions are based on our conversations with existing energy management companies, many of which are CA current customers, talking to market analysts, and most importantly, working with high caliber partners like Accenture that has niche expert rise in Energy area that have approached CA to help them build solutions. Additionally, interest in our current Eco platform has demonstrated interest in the industry that CA could be a player from a branding perspective. Ultimately we believe CA has an opportunity to contribute to making the planet greener through the management of the entire spectrum of energy use, generation, storage, and distribution. We believe the current focus on the Cloud would present a perfect recommend that CA consider building a formal program to evaluate the market opportunity and viability based on its current strategic focus.


2. Energy Management – a Quick Background Energy Management has a long history with many different approaches to generation and distribution that have been attempted. Essentially there have been three major phases that are relevant to the conversation of this paper: 2.1.1. Energy Management in the Past In the past the biggest footprint has been related to large fossil power plants where one size fits all. Energy management was limited in that excess energy production was generally lost and excess energy demand often results in brown outs and block outs. Investments in capacity are incredibly expensive and require a consider amount of time to bring online. Regulatory issues bring considerable risk to energy companies making investments. Finally the level of pollution of fossil fuels has generally be attributed to global warming, smog, health issues, and generally a reduced quality of life, particularly in areas where fossil fuels are processed. 2.1.2. Energy Management in the Present Currently many different forms of energy generation are being adopted including natural gas, solar, and wind power. Safer methods of nuclear production are also be evaluated. Additionally, new forms of storage, including long-life batteries are being researched and improving. The ability to generate energy is taking on a more distributed nature than with fossil fuels. However this distributed nature brings a new set of requirements around managing the infrastructure in areas where absolute control maybe impossible. It also introduce a level of cooperation with a large group of individual and corporations, each having their own profit interests that may or may not be in line with the energy producer. The biggest change that is being adopted with energy management is the focus on managing energy grids. Energy grids provide a mechanism to completely decentralize the production, storage, and consumption of energy. It provides for a much great bi-direction interaction across the various energy management actors and at many levels. The challenge is that this level of interaction requires a higher degree of process orchestration, demand profiling, and fulfillment optimization. The technology platforms that exist today simply do not provide the required level of functionality. Much of it is scattered across various products with little regard for “integrated design” and the resulting efficiencies of scale. 2.1.3. Energy Management in the Future Energy Management of the future is taking the various mechanisms of energy production and storage and brings them to market more efficiently. There is a much more emphasis on the consumer playing a role in the overall demand for energy than simply the energy producer making continual investment in new energy sources. Using bi-directional grids, with integrated configuration management and policy control, improves the ability to optimize the level of energy production while simultaneously adopting “green” standard. By providing the means to connect energy usage tracking to optimal energy production schedules, it provides the world at large with the ability to improve its utilization and conservation of energy more effectively: the community of one becomes economically viable


One big change that we believe the future of Energy Management will evolve to is the notion of the “virtual power plant”. By leveraging a community of simultaneous energy consumers and producers (e.g. reselling unused energy) and tapping into cloud technology to provide the supporting technology platform quickly and safely, we believe the overall cost of managing power, regardless of role, will be more efficient, more effective, and most important more agile. Swings in energy consumption requirements will be met better, and excess energy production will be capable of being stored at location closer to where it will be consumed, and thereby avoiding large investments with heavy risks by the Energy management companies. The notion of the “virtual power plant” also adds one more major component to Energy management – the role of the Energy brokers. While there are many brokers today that deal with large amounts of energy being produced, stored, and consumed, we believe the nature of the virtual power plant will provide the means for brokerage types activities to be much more wide spread – leading to lower costs and more efficient usage of energy. While the notion of having an individual household owner having any kind of brokerage privileges is likely to be some time, it is our believe that communities the size of large towns, or large corporations, are in a perfect place to negotiate the production and consumption of energy. Evidence of this model is starting to be seen in the proliferating of wind farms, community solar farms, and large organization reselling unused energy back to energy companies. By connecting the technology advantages of the cloud with the virtual power plant, we believe CA has the ability to be out in front.


3. Notable Trends In reviewing literature for putting together this paper many sources were reviewed. We believe however the various trends identified in a CA white paper “Environment and Energy” provide an excellent list. We have reproduced some of the ones relevant to this conversation below. 3.1. Energy related trends There are many ways to categorize energy trends, and multiple “top ten” lists can be found. One example is the “Top Ten Global Energy Trends 2009” from Global Information, Inc. (the-infoshop, 2008). Here we confine to social trends, as opposed to financial or economical trends. 3.1.1. Reduce energy consumption This is the “holy grail” of energy-related trends. It responds to all the energy-related drivers, including those related to the environment. It manifests itself in multiple ways, including personal and organizational consumption reduction, more efficient use of energy and better energy management. The need, and trend, to reduce energy use by data centers is one that falls into CA’s main business area. There could also be opportunities in energy management, in data centers and other areas, such as buildings or manufacturing. 3.1.2. Use cleaner energy The use of energy and the exploration/production of energy resources are among the most polluting activities. This has created a strong trend towards the use of cleaner energy. It manifests itself in different ways, including improving current energy-producing technologies, new technologies at the point of energy usage and the search for alternative sources of energy. The latter is a bona fide trend by itself. 3.1.3. Seek additional sources of energy The trend to search for new sources of (traditional) energy is mostly driven by the high cost of oil, and thus its intensity fluctuates as the price fluctuates. Other drivers are the desire to reduce reliance on foreign energy sources (both in the U.S. and in Europe), and the belief that oil could become scarce (which would also drive its price up). We include here the use of nuclear power to generate electricity, since “alternative energy sources” is commonly associated with green sources. 3.1.4. Seek alternative sources of energy A combination of the desire for cleaner energy sources and the need for additional energy sources fuels the search for alternative sources of energy. This includes the development of technologies for the use of sustainable or renewable energy, such as solar, wind, hydroelectric, marine and bio-mass. 3.2. Environment-related trends As mentioned earlier, several of the environment-related trends are also related to energy. However, not all of the environmental threats are energy related.


3.2.1. Growing belief that humans need to do more to preserve the environment There is a growing belief that many of the environmental threats we observe are caused by human activity and, thus, that we need to do more to preserve the environment. This has produced a strong “green” movement, with initiatives at all levels, from grassroots to business to government. (Global Warming, 2009) 3.2.2. Businesses are responding to environmental pressures Businesses are also becoming interested in protecting the environment. This may be due to a genuine interest by business leaders or a response to external pressures, but it is a fact that many corporations have instituted Corporate Sustainability Programs (aka Social Responsibility Programs, Corporate Social Responsibility, etc). There is the danger of “greenwashing,” where companies place more emphasis in publicizing “green” activities than in actually pursuing them. The good news here is that many environmentally friendly changes, such as reducing energy use, are also cost effective. (Green Business, Sustainable Business, 2009) 3.2.3. More people and governments agree that climate change is accelerated by human activity While this may forever be disputed, there is growing belief that humans are at least partially responsible for global warming and other climate change manifestations, and that it is imperative they reduce their impact. The new U.S. government has adopted this position, shared by most nations. (Chamberlin, 2009)


4. A New Energy Model In addressing these trends and meeting the expectations as set forward in the executive summary a new energy model needs to be described. As CA is not an energy company nor would likely take a leadership role in defining industry requirements, we opted to identify characteristics we feel would be required in any such description. We have validated some of this with particular customers and potential partners. 4.1. Energy demand outpaces supply Not surprisingly even with the current downturn in the environment the cost of energy resources is going up. This is a result of the energy industry becomes more global in nature. Demand in China directly impacts the cost of energy in the United States. A new energy model must therefore accommodate the understanding of the relationship between demand and supply, and the nature in way demands are profiled. It is quite possible that excess energy production in one area cannot fulfill excess energy consumption in another. The cost of areas like storage, transmission, etc… often factor into the total costs. Therefore the new model needs to properly model location and distribution as well as raw generation and distribution. The net is that prices will go up without a new energy model in place. In addition, as location may have a dramatic impact on energy demand the nature of the governmental policies and regulations that impact that area may have a substantial impact on the ability to produce and distribute energy. Regulations related to where windmills can go, where gas and oil can be drilled, where solar panels are permitted, etc… all have a substantial impact on the economics of a specific area. 4.2. Traditional energy distribution reaches its limit The economics and physical ability to generate energy is completely separate from the ability to distribute it. It is expensive to store energy and its distribution over long lengths degrades its quality. While new technologies are constantly being developed to better leverage the energy sources we have or are being developed there needs to be the capacity of energy generation to reach that “last mile”. For example, the ability of electronic cars to be a viable form of transportation has presented several challenges. While these types of cars have been around for some time, the ability to find locations to charge them has been limited thereby reducing the ability to leverage these cars to meet real world travel requirements. In current situations there has been a real lack of being able to manage grid capacity for large data centers. Various forms of energy generation lead to various amounts of available energy. The expense involved in generating, storing, and distributing that energy has a profound impact on how the grid is managed, and how the energy is ultimately accounted for and billed against. As the last mile becomes increasingly expensive, the tradition forms of energy distribution wreak havoc on the business model. Any new business model for energy must therefore access how to manage the economics of that last mile.


4.3. Energy Effectiveness The effectiveness of an Energy Management Program, and therefore a requirement of a new energy model is the ability to look at the entire lifecycle of the process. This includes production, storage, distribution and in some cases reclamation. It basically comes to doing more with less and if possible to do much more with just an incrementally smaller amounts. There has been a basic assumption of a linear relationship between production and consumption. This needs to change in favor of incremental investments in production leading to much more productive consumption. An Energy Model that meets today requirements requires a non-linear relationship. The manner in which this is accomplished is through improved production and critically the capability of storage. It is storage that allows the energy producer to round out and streamline the availability of energy. Storage allows the distribution of energy in a planned and predictable way. Finally in terms of effectiveness is the role that environment plays. The form of energy production is very much dependent on the availability of raw materials and nature itself. Most of these locations however are under regulations that make exploiting its full capacity a challenge. Finding way to meet these restrictions is a big opportunity for Energy companies and one that CA could potential improve through the management of infrastructure. 4.4. Key Risks to the New Energy Model Any new model has a set of challenges to adoption. Primary among them is the ability to model risks and accurate forecast how these risks will play out in the real work. Building a new Energy Model has several complex challenges that can have a huge impact on both the accuracy and integrity of its results. 4.4.1. The Environment As has been previously mentioned the environment (from both an industry and geographical perspective) plays a huge role in the manner in which a new Energy Model would work. Three areas have a significant impact on the model. Each of these represents an opportunity for CA by adding the appropriate content and reports to its baseline functionality:

Results of climate change

Leveraging renewable based energy sources

Implementing a carbon tax 4.4.2. National Security The reliance on energy for meeting the needs of our Economy makes any Energy Management model dependent on the efforts require to ensure our national security. We have a world economy and energy production, storage, and distribution will migrate to those areas which consume the most and arguably are the most profitable (with minimal risks due to regulatory concerns). We need to review these security concerns from two major perspectives:


Dependency on foreign resource

Dependence on depleting resources 4.4.3. Technology The greatest value IT brings to a new Energy model is the economics of managing the required infrastructure, providing analysis of the resulting data, and automating the orchestration of changes. In addition having a technology platform provides for accelerated adoption of new services, adoption of new architecture standards, and providing flexibility for managing the dynamics of demand and supply. Finally IT provides the ability to have bi-directional instantaneous conversations between the three major actors that contribute and benefit from the Energy Model. Essentially IT provides the mechanisms for optimization coordination of resources. Even with those benefits, however, IT places significant risks to Energy Management which must be factored into the model:

Distributed architecture for Process Orchestration

Compatibility with Energy Management agents and support systems

Management of Device Configuration

Assembly and Presentation of Role-relevant data


5. Laying out an Energy Management Program We’ve discussed the key requirements for an Energy Management program, identified key trends, and reviewed the characteristics of overarching model. The next step is to build out an actionable plan for taking advantage of this market opportunity. 5.1. Goals Based on your studies we believe the CA should focus its efforts on helping the industry at large adopt and achieve the following goals: 5.1.1. Normalizing the level of energy utilization In the current economy Energy consumption tends to vary widely leading to higher investment costs. This in turn causes higher costs to the public leading to lower cost fuel production methods which place the environment at risk. In additional it impacts negatively the national security of countries who prefer not to partner with countries who have questionable Governments. Normalizing the level of energy utilization is about consumers making smarter choices about when and how energy is consumed. It is also about rounding out the balance between production and distribution – a role now having been taken on by various brokerages. Whether it’s controlling the usage of lighting in a house or building, or scheduling a batch job in a location with lower energy costs, normalizing the level of energy utilization requires the balance of a local view with a world view. 5.1.2. Slowing the demand curve While the amount of energy consumption can vary widely based on economic conditions, there is a general trend to reduce the amount of demand on a proportional basis. The adoption of “green-friendly” devices helps, but it’s generally more about reducing the amount overall consumption through the industry. Therefore macro level metrics like total energy produced are carefully reviewed against other metrics like GDP to identify is energy demand is efficient and production level effective. Slowing the demand curve is essentially about managing existing demand better by optimizing its ability to be fulfilled through current production methods using modern methods like wind and solar. This also reduces the need for additional energy investments in older technologies like fossil fuels. Recent improvements in energy storage also help streamline the distribution of energy. As Energy is capable of being stored more locally yet available for wider distribution, the requirement to supply “energy on demand” diminishes, reducing the demand requirements. 5.1.3. Leveraging multiple energy sources The various forms of energy sources (oil, coal, gas, wind, solar, water) each have their own advantages and disadvantages. They each generate energy at different levels of efficiency. They each have expected levels of production with differing degrees of variance. They each impact the environment differently through varying degrees of being renewable. Any Energy Management Program needs to weigh the differences in terms of overall efficiency, regulatory issues, and adopting a “green” initiative.


Equally important, however, is how each of these energy sources can be aggregated to help normalize the production of energy much as we discuss the normalization of energy consumption. While energy companies have rapidly invested in new forms of energy production through acquisition, it’s the entire energy ecosystem that needs to play a role. That means that energy consumers can now be energy producers (reselling unused energy), local markets can become their own brokerages through a virtual power plant, and energy producers can balance the needs of production style with storage, and focus on lowering the cost of the last mile by eliminating the distances energy travels. 5.1.4. Engaging energy conservation Energy conservation is ultimately about a dialog between communities of producers and consumers. While energy producers can continue to invest in new ways of production, storage, and distribution, if consumers do not adopt a similar mindset and continue to investment in resources that require the generation of energy in older forms (oil, coal, etc…) it will be a challenge for “green” initiatives to prosper. The industry and Government may have a responsibility to push for these next general alternatives, but the value and incentive must be there for consumers. Creating a personalized “grid” for example only makes sense if a consumer sees reduced costs (from carbon-based energy sources) and better control of their overall energy consumption footprint. Having data centers capable of managing workloads in energy rich locations, or having local appliances be controlled through a grid are two examples that CA could play a role in. 5.2. Objectives While our recommendation is to focus CA’s effort on supporting the Energy industry, it is worth casting a wider net for purposes of building a holistic picture to work from. Having reviewed several sources we believe the following objectives reflect the industry: 5.2.1. Improving energy efficiency and reducing energy use, thereby reducing costs As stated several times throughout this paper – we need to have a balance between energy production, distribution, and consumption, with the net effect of reducing the risks of investment and reducing the costs to the end consumer. We believe this objective is one that CA can capitalize on with the appropriate functionality built into the solution portfolio. 5.2.2. Cultivating good communications on energy matters Several key actors are part of an Energy Management program: Energy Producers, Energy Consumers, and Energy Brokers. We provide specific details on each of these actors in the following section. An integral part of an Energy Management program is that there is a productive conversation among these audiences (as well as Government). This includes understanding the role of demand (pricing), fulfillment (costs), and regulatory (constraints) issues. In introducing the notion of a Virtual Power Plant, the role of broker becomes more wide-spread and the nature of conversations become more critical as the middle-man becomes the engine of normalizing the utility of Energy and its distribution.


Although not a major thrust of this paper, all three key actors have a huge role to play in communicating with the Government. The types of regulatory reforms under consideration often have varying influences on each of the key actors in way that were not anticipated. These behaviors often result in unintended consequences and inefficiencies in the systems regulations were design to correct. Having the mechanisms to record the changes in the overall Energy supply chain and how it relates to a new Energy Model is a critical component to managing the Government’s oversight of the industry. 5.2.3. Developing and maintaining effective monitoring, reporting, and management strategies for

wise energy usage The cornerstone of any Energy management program is the ability to track the amount of production and consumption. The key to achieving this is having the ability to properly access various agents and other information sources to assemble the appropriate trends. You can manage what you can measure; visibility across the three roles is paramount. In particular the ability for the brokerage activities to be efficient at pairing demands with supply requires constant monitoring on both sides. However each of the roles benefits significantly by having the appropriate usage of energy production and consumption tracked. We believe CA’s footprint in this through its EcoMeter product is a big step in this direction. With additional integrations to other systems and tying in more deeply with the Energy producers, we believe CA can help provides a set of “norms” by which each of the actors can make decisions about how to optimize their contribution to the model, while still simultaneously optimizing the whole. A critical part of the model requires each actor to act autonomously while also acting in the interest of the industry. While Government purports to contribute to this through regulatory reform, this is a slow process and often leads to inefficiency in the overall system. 5.2.4. Finding new and better ways to increase returns from energy investments through research

and development As in any industry, the key to sustained innovation and profitability is the ability to find increasing returns on investments, generally through research and development or optimizing the supply chain. Although not directly an area of strength for CA, the ability of our technology platform to provide an open integration platform, process orchestration, and adoption of new services generally supports the nature of reducing the cost of investments. 5.2.5. Development interest in and dedication to the energy management program from all

audiences As mentioned with the goals of an Energy Management Program we should be providing an incentive for all audiences to adopt a program of energy efficiency. There are many ways to achieve this but in general this requires having the consumer understand the balance between the business or personal need with the required energy requirements. Through metering, on-line tracking, local orchestration, on-demand configuration, and automated billing there are ways to build a dialog between all the major players.


5.2.6. Reducing the impacts of curtailments, brownouts, or any interruption in energy supplies One of the ways we believe that CA could entertain taking a serious interest in the Energy industry is by providing a portfolio of tools to manage the identification, protection, and resumption of services that are impacted by gaps in energy supply. In one sense an outage due to energy shortage is no different from an outage caused by a virus: it still leaves the various system inoperable or at minimum available. As part of the design process the results of product like EcoMeter could be used to ensure enough energy is available. Tools like the CA CMDB could be used to identify relationships between key systems and energy sources. EcoGovernance ensure the right decision making process is in place for investments, while products like Spectrum and SSA could monitor the quality of the distribution platform. 5.3. Understanding the key audiences of an Energy Management Program There are three major actors in the Energy Management field (excluding governmental agencies): Energy Producers, Energy Consumers, and Energy Brokers. Each of these key actors plays a key role in the model by contributing resources that when optimized provide for the efficient production, distribution, and consumption of energy. IT should be the expectation of CA that each of these actors would leverage the technology platform in different ways. Much the way ERP helps to coordinate various suppliers along a supply chain, the Energy Management Platform should be directed to provide access to the relevant data for each actor to make critical business decisions, automate policy and fulfillment best practices through process orchestration, and build a collaborative conversation between the actors. Each of these actors has three fundamental activities that support the Energy Management Program:

Building a Profile of Customers and Suppliers

Automating the business rules that support the business model

Creating the mechanism to build a contractual relationship between each of the actors 5.3.1. Energy Producers Energy Producers are the actors responsible for actually converting the resources nature providers to energy which can be consumed. While smaller energy producers often focus on one kind of energy production, larger energy producers (or essentially holding companies) often have a portfolio of various companies that can combine various energy forms to help provide a national or worldwide network. 5.3.1.1. Energy Producers – Profiles Energy Producers generally focus on creating profiles for three audiences. The first profile type are the individual companies or profit centers around specific energy types (oil, gas, etc…) As regulations for each of these types varies widely by local, state, national, and international, it is critical to understand the cost of operations given these policies.


The second profile type is those of a broker. Brokers deal generally with specific energy demands and location. Assembling large communities of consumers allows the Energy Producer to invest in the right capacity requirements and plan for the future. Brokers, by their very nature, normalize the demand out and make it less risky to do business. The third profile type is that of the actual consumer. While brokers tend to create a distance between the producer and the consumer, it is important that Energy Producers understand not only the energy demands placed on them, but the kinds of energy that is desired, where it is located, and what types of demand should be expected in the future. 5.3.1.2. Energy Producers – Supporting business rules and contractual relationships The focus on Energy Producers is on building a set of business rules in that allow for the flexibility of handling Consumption Patterns. The largest investment they take on is generally adding more capacity ability and understanding what behavior devices they have to use existing capacity, or to handle through lower cost storage mechanisms, is a key to their business models. Keep in mind that Energy Brokers are also effectively “consumers” as well – albeit at a much more aggregate level. None the less consumption patterns require understanding the full set of possible consumers. The ability to accumulate this consumption data, analyze it, and present it in a form to make investment decisions is critical. The manner in which they can build and manage contracts easily for managing energy distribution is also critical. 5.3.2. Energy Consumers Energy Consumers are the actors responsible for consuming energy. Generally consumers come in various forms: individuals, groups, companies, and organizations of various sizes. The key difference among consumer types is the method by which energy is consumed, its regularity and amount, and the method by which it is effectively billed. Additional ways to characterize a consumer is the level in which energy fulfillment can be controlled through process orchestration, the level of instrumentation available, and the ability to enforce specific policies. 5.3.2.1. Energy Consumers – Profiles Energy consumers generally focus on profiling “Providers” and rarely separate an actual provider with that of a broker. Generally the smaller a consumers footprint, the more likely a broker is in place. The manner in which a “Provider” is profiled generally amounts to the amount of energy available (direct or through storage), the cost of that energy, the manner in which it is billed, and in some cases the ability to sell back unused energy. In cases with large consumers the ability to have flexible rates scales is a critical component. The ability to track usage and costs and provide the ability to audit these figures plays a substantial role. Finally the most important manner in which “Providers” are provide is avoiding brown-outs, black-outs and the ability to handle swings in energy capacity requirements.


5.3.2.2. Energy Consumers – Supporting business rules and contractual relationships The focus on Energy Consumers is on building a set of business rules that allow for the flexibility of managing Energy Generation requirements. Generally this takes the form of being able to schedule the consumption of Energy to be at its lower pricing point or placing resources in places where Energy pricing is inexpensive. This if often supported through the use of process orchestration tools that communicate with agents. Additional, energy metering tools are used to track actual usage and compare against the billed capacity to look for savings opportunity. More recent improvements include the ability of the grid to make decisions around energy consumption and automatically control the configuration of resources to perform in a manner to control usage. 5.3.3. Energy Brokers Energy Brokers generally focus on consuming large amount of demand from Consumers and packaging them in a manner that is easy for Energy Producers to satisfy. Additionally Energy Brokers generally normalize the demand in such a way that they can approach various Energy Producers and effectively negotiate for the lowest rates based on energy capacity requirements during various periods. Energy Brokers generally focus on normalizing the energy demand curve and smooth out the requirement for Energy Producers to make large investments to handle swings in consumption. 5.3.3.1. Energy Brokers – Profiles As the bridge between production and consumption Energy brokers generally focus on profiling both providers and consumers and focus on normalizing the demand for energy with the packaging of supply. Profiling Energy Producers is often focused on the types of energy production methods, the ability to handle swings in demand, and the price points available as determined by either time or location. Additional elements that come into play include the ability to handle storage, and the overall quality of energy avoid brown-outs and black-outs. Because brokers focus on accumulating large numbers of customers (and therefore demand) a significant part of profiling is the ability to segment these into categories that can be pushed to the Energy Producers in ways where economies of scale help to lower the cost and just as importantly lower the cost curve and overall energy utilization. Finding way to leverage excess capacity without additional costs becomes a key to profitability. Profiling Energy Consumers is often focused on the levels of demand and the ability to create pricing packages (i.e. pricing tiers) that are attractive to the market. In a sense – the Energy Broker is looking to replace variable costs (and variable demand) with more fixed costs (and fixed demand). This allows the Broker to create efficiencies in the market and influence the industry as a whole to aspire to the aforementioned goals. 5.3.3.2. Energy Brokers – Supporting business rules and contractual relationships The focus on Brokers is on building a set of business rules that allow for matching demand with supply through efficient Energy Packaging.



6. Value Propositions There are several identifiable value propositions that CA could pursue in supporting an Energy Management Program. However, as our recommendation is for CA to partner with an energy industry consulting firm, the specifics of what and how we approach the market will depend significantly on the manner in which a partner interacts with the industry. 6.1. Provide a platform for energy accounting At the foundation layer we believe CA could provide a platform for building an “energy accounting” system. CA has technology capable of tracking resource costs and utilization, tracking energy consumption, tying services to costs, and managing the costs of projects. Services can be defined with both pricing and costing managed separately. We see the opportunities:

Controlling current energy performance through comprehensive service level management

Setting energy reduction targets and enforcing them through policy management and tracking

Improved energy consumption forecasting using open source analytic tools

Analyzing the historical energy performance of company facilities

Opportunities for improved operation and maintenance practices

Projecting future energy budgets by tying costs to consumption

Improved product/service costing through effective assignment of job scheduling

Tracking and verification of energy efficiency retrofits 6.2. Provide a platform for reliable metering, monitoring and management energy usage Currently through its ecoMeter platform CA has the ability to meter energy usage in a data center. We believe CA can extend its footprint into the larger distribution network of the grid. Through proper instrumentation of energy devices and deeper integration into the CA technology portfolio we believe CA can capitalize on the following opportunities:

Measurement of energy consumption over time

Measurement of the independent variables that influence energy consumption

Development of a relationship between energy and the independent variables

Historical analysis of energy performance

Definition of reduction targets

Frequent comparison of actual consumption to targets

Reporting of consumption and target variances

Taking action to address variances and ensure targets are met 6.3. Provide a platform for holistic IT governance Historically CA has had a strong platform around IT governance. We believe that even with CA’s changing strategy around this area there are specific high-value niche areas which could be approached by integrating the notion of Energy governance in certain high-value operational areas. In particular we see the following as potential:


Opportunities for improved operation and maintenance practices

Create motivation for energy saving actions

Report regularly on performance

Monitor overall utility costs

Monitoring cost savings 6.4. Provide a platform for adopting infrastructure changes quickly and minimal risk One of the most aggressive areas we see CA exploiting is in the nature of enabling infrastructure changes. Through CA’s comprehensive suite of Service Assurance and IT Service Management tools, we believe that effectively we can provide a partner with the ability to create a “service deployment” suite. In particular we see CA ability to provide the following capabilities:

Comprehensive planning through Program, Project and Change Management

Delivery through Process Orchestration, Job Management, Content Delivery

Tracking through instrumentation and integration with various CA and non-CA agents

Quality management through service modeling, performance management

Support through distributed event management and service desk functionality

Infrastructure resource management through asset management

Cloud supporting through planning, design, and execution 6.5. Providing a platform to manage operational decision-making Although not an area that is likely to be approachable directly, we believe we can support Energy Producers and Energy brokers with tools that providing basic support for answering the following questions:

What functional(s) does this system serve?

How does this system service its functions?

What is the energy consumption of the system?

What are the indications that this system is probably working?

If this system is not working, how can it be restored to good working condition?

How can the energy cost of this system be reduced?

How should this system be maintained?

Who has direct responsibility for maintaining and improving the operation and energy efficiency of this system?

6.6. Provide a platform for adopting new configurations and bi-directional communication Finally through the Catalyst architecture we believe that CA can enable one of the areas that has been a challenge in Energy Management industry – enabling and leveraging bi-directional communication. This is critical to supporting the full capabilities of the grid. In particular we see CA providing a comprehensive real-time architecture to monitor and take immediate action on the following:


Hour by hour energy demands and energy production

Tracking when demand exceeds production and vice-versa

Issuing demand response bid to local utility

Implementing energy control plan automatically

Receive demand response payment from the utility

Implementing comprehensive demand response The net of this platform would be to provide a level of process orchestration and real-time optimization across the three major stakeholders with minimal effort.


7. Laying out a Platform Strategy During the past few months we have talked with many stakeholders both inside and outside CA. This includes representation from all three primary stakeholders. One of the biggest challenges we’ve seen for CA taking on an initiative of this sort is identifying its solutions as a set of products. Our analysis really identifies the need for CA to see itself in terms of a platform – much in the way it is positioning the cloud technologies and Catalyst. 7.1. Platform Characteristics We view platform development as distinctly different from product development. Unlike product development, the goal is not to directly develop new products per se, but to create the pieces or elements that enable the development of subsequent product with the assistance of a partner. In other words, we see CA tools as being a set of blocks through which our partners assemble a solution. We identify the following characteristics of a “platform” approach to be an essential element of the manner in which CA needs to consider an investment:

Product platform life-cycles that define specific product or product sets

Product platforms that can be extended using core common components

Product platforms can that create derivative platforms for the various roles In addition we do recognize two features of platforms that would need to be explicitly addressed:

Product platforms are developed in a holistic perspective, not incremental

Product platforms take significantly longer to develop However, the risks of this are mitigated somewhat by the investments CA has already made in those components that are more holistic in nature (i.e. integrated suites) as well as those that take time to develop (the Catalyst platform). 7.2. Product Platform Strategy In recommending a platform approach, we believe for CA to be successful we would need to leverage a coalition of partners and customers to assist with the following key activities:

Platform Planning

Platform Concept Evaluation

Platform Development

Platform Testing and Pilot Betas 7.3. Purposes of product platform strategy Taking a platform approach has some benefits to CA in terms of its strategic thinking and tactical focus. We believe having CA consider approach the Energy market as a platform strategy would:


Focuses senior management on the most important decisions

Establishes the foundation for the resulting product line

Provides the platform for long-term business strategy

Links a company’s strategy vision with its product-line strategy

Provides specific direction for technology development

Defines product variations aimed at specific segments within a market

Schedule the rollout of products within a product line

Provides guidance to the product development teams

Schedules the initiation of product development 7.4. Platform Market Benefits While there are many software manufactures in the market that offer niche functionality, much of the software is effectively CA type software that has been customized by each of the identified stakeholders. We feel that CA has an opportunity to be the first to market a platform centered, cloud centric approach. In summary we believe the opportunity is to be:

First to market and capture a market share advantage

First to market and capitalize on getting earlier experience]

First to market and influence the definition of standards

First to market and reduce the time to capture new revenue streams By working with a coalition of organizations CA is position to get ahead and stay ahead. Further by leveraging our common components and cloud technology CA can leverage new technology faster than the competition.


8. Approaching the Market The Energy market is large and there are many components to it. Added to that complexity is the while CA does have many energy customers, it does per say have a dedicated practice to the industry. Therefore our recommendation is that CA assume that it needs to partner to pursue this industry. Given that, there are several high level internally based decisions that need to be considered as well. We divide these into three areas. The first relate to specific organizational conditions which need to be considered. The second related to specific structural issues that need to be considered. The third focuses on how to exploit the future business model described above. 8.1. Organizational Considerations 8.1.1. Personnel While there no dedicated practice to the Energy industry, there is a business unit that focuses on providing solutions for this market. We believe that addition resources would need to be hired to work with a partner organization to gather requirements and push to product management and marketing. In addition we believe there needs to be a dedicated alliance manager, practice architect, and customer advisory individual. The alliance manager would focus on work with Energy Producers and Energy Brokers, while the Customer Advisory person would focus on Energy Consumers. Finally the Practice Architect would be responsible to managing the platform, and tying CA solutions from not only an Energy perspective, but a corporate portfolio perspective. 8.1.2. Promotion Promoting the CA solution would be focus around partner activity, industry specific workshops and conferences. Leveraging existing reference accounts as well as efforts from the eco team would also be part of the overall promotion strategy. Leveraging the cloud messaging would also be encouraged if the appropriate content and distribution methods (see below) were in place. Finally having the appropriate Practice in place would be a recommend way for CA to have a voice in the industry. This includes white papers, relevant presentations and architectural content. The current financial industry Practice serves as an example of this approach. 8.1.3. Distribution As mentioned previously, our focus on distribution would be mostly focused on partnerships, particularly with Energy Producers and Energy Brokers. We do feel that Energy consumers could be approached directly using our existing sales model, assuming the appropriate training is provided. A secondary approach would be to form a SaaS offering or PaaS offering. CA has placed considerable effort in creating a strategy effort around the cloud. We believe with a partner’s assistance there could essentially be a packaging around the notion of the “Virtual Power Plant” – supported by a Cloud Offering. For example, you could have a community of people with solar power contributing the generation of power to one another, using an Energy broker in the middle to support energy shortages.


8.1.4. Finances While we attempted to build a high-level financial model for this recommendation, it turned out to be nearly impossible given the short time frame we had to get the appropriate resources together. A financial analysis would need to be completed before an investment any priority could be assigned. In reviewing some of the work done with partners however, we have seen multi-million deals put on the table. And most of the big Energy based clients, like Sempra, are large multi-million deals. We therefore believe that the various types of customers that would be interested in this solution would support the investment in building a full business case. 8.1.5. Technology From a technology perspective we are recommending CA to leverage the work completed with the eco team. In fact our recommendation follows their model: leverage existing products and solutions from our portfolio and tailor them to create a more specific Energy industry portfolio based on the addition of content, vocabulary and best practice process orchestration. Specific technology recommendations are documented within this document. The most significant change from the status quo is the nature of seeing the solution set as a platform, not just a product. 8.1.6. Services Currently CA Services has a special group of resources that focuses on “Emerging Technologies”. While the major of services that focus on the Energy industry itself would come from a partner, we see CA as having billable Engineers that focus on tying CA products to other third party products in a sub-contractor manner. They would also provide assistance to Partners in building out accepted configurations and implementation best practices. In a manner similar to that handled through the Service Provider program, we see the practice building out relevant playbooks and support artifacts to streamline the implementation efforts. 8.2. Structural Considerations 8.2.1. Retrofitting existing IT management solutions to energy management Currently CA has several products which could be tailored to better fit the Energy market. However, we see the advantage of CA presenting its portfolio as a platform rather than a set of products. It’s tying the products together much in the manner that the Service Provider solutions was put together.


8.2.2. Creation of Energy Management Cloud One of the cornerstones of the new Energy model are the development of a Virtual Power Plants. We believe the business model that supports the creation of these virtual entities can be support by a cloud offering. Our basis for this is based on the economics of coordinating the efforts of the three key stakeholders (i.e. Energy Producers, Energy Brokers, and Energy Consumers). The coordination of these efforts is complicated and it’s unlikely that any one actor has the resources to assemble a full solution and maintain it over time. CA has the ability to support this kind of platform and contribute to the economics of the model in a meaningful way. In particular the ability to create a cloud platform, to instrument and collect data and report on it via SLA’s, to price and bill utilization, and finally to operationally manage the underlying network all contribute to taking advantage of a unique market opportunity. 8.2.3. Going the last mile In our research and interviewing both Energy producers and Energy brokers it became clear that the last mile (e.g. getting to the last consumer on the supply chain) was very expensive. There are costs related to laying out the infrastructure, maintaining it, and managing it in an economic manner. Consumers who live in non-populated areas and looking for cable TV or high-speed internet can appreciate the issue. There is a fair amount of investment in tying down the fiber required to provide these kinds of services. The same is true for the Energy business. While there are many sources of energy and most locations have accessibility to that energy, it is often effectively unmanaged. These locations are not connected to the grid, and rarely are included in any kind of overall Energy conservation effort because they are simply too small to service. CA products focused on the distributed network help reduce the costs of going the last mile, providing an economic incentive for CA. In addition CA’s development of a common architectural platform provides a support for network independence using messaging middleware. 8.2.4. Storage management One of the great uncertainties of the new Energy business model is focused on storage. Over the past 20 years the number of energy consumption devices that require battery power has increase significantly. In addition, the ability to generate energy on-demand has become cost prohibitive in many locations. There simply is a limit to the amount of available energy. To help streamline the balance between energy production and consumption, new storage technologies have been introduced. These, essentially huge battery’s store energy for various periods of time and provide the means to reduce the amount of energy required to meet existing power needs. They help avoid the spikes in energy generation as well as take advantage of pauses in energy consumption and periods where energy production is at its lowest costing tier. Finally storage management allows the distribution of energy to be more wide-spread. Through products currently provided by CA, these storage centers can be proper instrumented, monitored, and managed more effectively.


8.2.5. Data analytics and forecasting technology From an analytic perspective, the new Energy model requires a fair amount of number crunching. There is potentially millions of point of data collection, multiple actors including in this case, a huge factor of State, Local, and National governmental reporting requirements. Optimizing the coordination of a large system requires detailed analysis to determine the consequence of assessing impact making changes. Energy is critical to our economy. Efforts made to forecast technology requirements and be able to fulfill those demands are critical to our economy. Providing the ability to capture that data and generating role-based reports will help to support local decision making while simultaneous achieving the objectives we identified above around overall energy reduction. While CA doesn’t provide data analysis tools per se, much of CA technology does provide the ability to capture data and the context from which that data plays a role in the ultimately output. 8.2.6. Storming the Beach-head CA’s existing customer list includes several large Energy based producers and consumers. All of these in one way or another provide a mechanism for exploiting this opportunity in rapid fashion. While we only talked with a few customers (of both types) they all showed an interest. In particular, we talked about tying our ecoMetering technology with both our infrastructure management and service management tools. They all had a level of interesting in how we could tie the pieces together. Keep in mind that we stated up front that we will not produce energy-niche products, but rather would retrofit our existing tool set. They still had a level of interest that we interpreted as being very positive. In fact we believe in a couple of cases we actually implemented solutions that would similar to those we are suggesting be migrated to a more cookie cutter approach surrounded by marketing, packaging, and delivery. The net is that it is in the opinion of this team that we have the ability to exploit our existing beachhead and create new ones across the various roles identified in this paper. 8.3. Exploiting the new Energy underlying business model Every business has specific functions that need to be explicitly identified and documented in such a way that wherever possible technology solutions can encourage coordination of activities through a combination of data integration and process orchestration. In addition, those activities that require human intervention (i.e. making decisions, etc…) should be supported through reporting, dashboards, and other forms of convenience. We have identified below the major parts of an Energy business model where we believe CA can take advantage of. We do not claim this list is exhaustive. 8.3.1. Production – How much is produced and when? In the past individual sources of production have been spread out. Producing energy was generally focused in large geographic areas. This had a significant impact on the costs of generating data because of the uncertainty of demand (how much, when, what type, etc…) To take advantage of the new Energy business model CA need to enable instantaneous forecasting by real time data collect from various sources. This requires the ability to tie into various instrumented devices, aggregate this data, and provide visibility to how demands and energy production can be best


matched. In particular we want to transition such that production is demand based, with less “stock” required. We also feel that there should be a portfolio of “energy” services based on production types. Finally there should be the ability to manage service levels and relevant costing / investment of energy production. Currently we feel some combination of ecoGovernace, Catalog and Oblicore would provide the underpinnings of Production. 8.3.2. Inventory – How much energy is available for distribution and where? In the past the notion of inventory has been limited. The ability to store energy for long periods of time is a technology challenge that is still under a great deal of research. While battery life and storage tools have greatly approved, CA doesn’t have a direct ability to impact this. However from an indirect perspective we believe there will be a need for Energy Producers and Energy Brokers to increase storage and thereby have more locations with less space, and less storage costs. Parts of the infrastructure required to support these “distributed” storage areas represents an opportunity. We see, for example, having our infrastructure management tools supporting these locations from a operational view, as well as leveraging Catalog to track consumer usage and broker pricing. Essentially selecting an energy plan would be done through a catalog by tracking billing through pricing plans, subscriptions, and ad-hoc requests. 8.3.3. Distribution – How often is energy produced? Along with production and inventory is distribution. In the past basically energy production is scheduled based on historical forecasts. To the extent that Energy Brokers were able to aggregate demand, it provided the ability to normalize the demand. What CA needs to do is further support this aggregation model by providing the ability to support a wider network of demand. To the extent possible this should be based on the overall “profitably” of the unit as opposed to individual components. We believe CA can handle this in two ways:

Implementation of Incident and Problem Management (IPM) and CCRM through Service Desk

Management of “Edge” network through Spectrum, Virtual Performance Mgr, Service Assure 8.3.4. Metering – How much energy is consumed and when? One of the areas that we believe is CA’s strongest is in the area of metering – understanding the consumption of energy, the patterns related to energy consumption, and the demands that caused that consumption request to being with. Having this information is a powerful way towards influencing the demand for Energy by better prioritizing where and when the energy demand will be created. For example, should energy be consumed in a Data Center in South Dakota instead of New York City because of the cost of energy? Should energy be consumed between midnight and 4 am instead of during peak business hours? Having the ability to provide that metering data within specific context provides a lot of value. The means for CA to take advantage of this opportunity would be through providing real-time access to consumption data along with the context that identifies the business achieved in incurring the costs. Key to this strategy is the use of EcoMeter. We recommend this tools be advanced to include a wider set of


connectors to various energy usage agent tools. In addition, support for security management would be appropriate for controlling when requests for energy can be submitted and fulfilled. 8.3.5. Positioning – Where are the energy plants placed? Positioning is a critical decision that needs to be made by ALL three audiences. There is always the ability to balance where energy is produced, how it is stored, and how it is consumed. In some cases there is even a need to understand how it is reclaimed. In the past the Energy model has focused on high volume areas with limited demand control options. However, with the types of energy production possible, the locations of where energy is produced have changed. Today, for example, energy can be produced locally through solar panels. The challenge is to harness the various forms of energy production by support its generation and consumption are wider areas with better demand control. We believe that the notion of a “virtual power plant” plays huge role in redefining the energy market paradigm. The fundamental approach would be to provide the infrastructure to support distributed positioning and optimized locations. Our research has provided some interesting insights with the notion of cloud technology being one of the key cornerstones. We believe, for example, that 3Tera / Cloud Optimize could help determine best infrastructure delivery system while overall health Management (multi-network, remote control, redundancy, self-correcting) would be a mechanism for streamlining the costs. 8.3.6. Pricing – How much does energy cost? There is a very big difference between Pricing and Costs. Pricing could essentially be seen as the financial relationships between consumer and broker while Cost is the financial relationship between producers and brokers. What essential is to see how the legacy approaches, essentially being based on location, should be pushed aside and new methods, like yield management would be put in place. Yield Management is the method deployed by the airline industry when pricing tickets. The basic notion is to assign the value of seats based on demand. Early demand gets the benefit of low costs, while real-time on the fly demand would require a premium. Popularity of seating, or in the case of energy, the time of production, would play a large factor in the price. Just the same, options like First Class would require a premium whereas last minute seating, whose pricing options lose value as the flight prepares to depart, would push prices down. We believe CA can help achieve this form of dynamic pricing based on products like Asset Management to help focus on managing contracts as well as Service catalog & accounting, which can price “products” based on several conditions while also assessing penalties. 8.3.7. Availability – When is the energy available for purchase? The Availability of energy is similar to some of the other areas we covered. However in this case we are focused on the method of ensuring the infrastructure for managing energy is available, not the specific availability of energy itself. Like previous areas, we believe this needs to be more demand based while maintaining its ability to be environmentally controlled. We need to think of availability in terms of “networks” and “grids” and not just individual pieces of equipment or individual locations. Based on our conversations we see some immediate opportunities along the following lines:


NetQoS, SSA, APM to focus on availability of energy distribution platform

APM to “protect” application performance

SSA to provide a common view of the “service” platform

WA (workflow automation) to execute energy conservation and production schedule 8.3.8. Payment – How is payment handled? Finally, we see the manner in which payments are handled to be a rather unique opportunity for CA based on our work with financial companies like First Data. Most Energy Producers, Brokers, etc… are not set up to take payments in the variety of ways that would be helpful to a customer. We believe that the older “point of presence” form of payment (like writing a check) will remain for some time. However there should be other payment types available whether through your ipad or through some kind of pre-paid energy card. While CA doesn’t directly provide those kinds of applications, several of CA’s largest financial customers leverage CA technology to monitor their network. Products like Nimsoft and Spectrum, for example, monitor these networks. Ensuring fast efficient collection of payment as well as the security required to authorize payments or identify fraud are critical. CA provides the advantage of adding a more holistic view of the Energy infrastructure network: from Demand Capture, to Production, to Storage, to Distribution, to Payment, to Reclaiming


9. Going to Market - The CA Opportunity Up to this point we have addressed several issues:

The Energy Industry and its critical market requirements

A New Business Model that supports the needs of Energy Management

Laying out an Energy Management Program

The various key stakeholders that would benefit from CA solutions

The need to take a platform approach as a solution offering

Potential value proposition that CA could exploit through partnerships We discussed several mechanisms for CA to approach the market. Having reviewed these we believe the following reflect the key short term requirements for entering the market.

Building a key partnerships and alliances

Retrofitting CA management products for delivery of Energy Management services

Leverage the investments in the cloud to provide a SaaS or Paas offering

Providing solutions for managing both virtual environments and highly distributed network

Sell derivatives of the stored energy data for effective energy management


10. Going to Market – Defining the Key Business Drivers Based in our research there are several business drivers and business initiatives that are part of the scope of the EDR. Currently CA ecoSoftware helps organizations to meet energy and sustainability goals such as reducing carbon emissions, managing consumption, and cutting energy costs. It helps organizations to become more efficient when using power and natural resources. CA ecoSoftware helps organizations to do this by providing you with valuable, up-to-date information captured from your environment and by supporting your efforts with a systematic governed approach. This information can be communicated to stakeholders and used to drive continuous improvement. All these capabilities are able to be executed and get value only for an Organization Data Center, or for a particular area on an organization. Expansion on the cover will be required to be able to meet the business drivers and business initiatives for DER, knowing that it could require going beyond to the data center scope or particular organization section.

Identified in the mindmap below are the key Business Drivers and resulting Business Initiatives

10.1. Meet Regulatory Carbon Reduction Initiatives As the Energy industry is aware there is a lot of emphasis placed by the Government on reducing overall carbon initiatives. Some of these are voluntary; some have or will become law.


10.1.1. Modifying means of energy supply There is a constant need to continuously find various ways of modifying energy usage. This can come from modifying the various types of energy consumed, modifying the actual source, or changing the usage pattern. We see a key to that as being able to accurately predict energy needs and configure consumption such that it meets the regulatory requirement. We believe the Cloud plays a big role here in both managing the usage of energy as well as bring a tool to provide an alternative to the typical data center. 10.1.2. Governing energy usage We see the governing of energy usage in three ways: carbon trading, customer support, and regulatory compliance. Carbon trading is a bit complex and probably reflects functionality that is long term to CA. However the ability to provide customer support through Service Desk, and Regulatory Compliance through metering and reporting make this a potential high value area. 10.2. Managing Energy Shortages Energy shortages exist although in many respects they are often hidden from view. Most often Energy shortages are handled through brokering higher priced energy sources that are on-demand. While an experienced Energy Producer or Energy Broker are aware of these costs, often the Energy Consumer does not have the proper tools or visibility to see what is happening. Even if they can see what is happening often they don’t have the ability to actually take action. The requirement then is at least two fold – being able to identify what’s being used and reduce it accordingly.


10.2.1. Producing Energy on Site In our research however we uncovered that the way in which many Energy Consumers see this problem of visibility is in terms of how the produce energy on site. This actually falls in line with the Energy Producer although there are radical differences in how each of these actors actually thinks about Energy production. From a Production side we see the requirement to support adopt energy production devices as identified in the mindmap below. But in additional to what you expect to see, we also identify Release and Change Management because of the nature of how these production devices need to be constantly managed and refreshed. Also too may be the raw number of devices. 10.2.2. Reducing on Site consumption We also see a huge market opportunity in support the ability to have Energy Grids essentially provide bi-directional communication with the various production devices. The Grids would essentially assign work and consumption based on various factors. The Grid become more than just a traffic light but actually becomes a traffic cop. This allows the system to be looked at from a holistic perspective not just individually.


10.3. Increasing Energy “Turnover” In manufacturing they have a common term called “inventory turnover”. Essentially it is a ratio showing how many times a company's inventory is sold and replaced over a period. Generally the more inventory turns the better. Essentially Energy Producers and Energy Brokers have the same demands put on them. This is NOT just an issue of profit however. If you think about flying an airplane you could identify empty seats as being a cost; this represents inventory and can’t be leveraged once the plan departs. The same is true for energy unless there are storage banks in place. Energy once generated needs to be used or it is lost. The mindmap below identifies the areas we believe are high value.


10.3.1. Managing DER Customers As identified in the mindmap – there are a lot of areas of potential coverage here. We identify them collectively below:

Utilize disparate energy sources

Reduce power transmission distance

Aggregators inform utility of available energy

Rate Card Support

Energy Production Service Availability

Customer Support

Bi-directional metering and control The last four we believe CA has a natural advantage to. Rate-Card Support would be a nature extension of Service Catalog, Service Accounting, and Olicore. Rate Cards could be placed into the Service Catalog, much as pricing structures are placed in for specific resources. Service Accounting can collect metered data (from ecoMeter, NetQoS, NimSoft) and generate an invoice. In this manner the combination of tools provides the ability to tracking pricing by applying the appropriate Rate Card, as well as auditing costs by comparing against a Energy Producers / Energy Brokers invoice. Energy Production Service Availability could be tied to the required infrastructure to deliver Energy on-demand. Essentially by monitoring the underlying physical infrastructure to deliver energy, CA effective has a means of reflecting its overall availability. You could easily imagine as well assigned work to Service Desk if there is a problem that needs to be corrected. Customer Support would be an extension of using the Service Desk as described above. Knowledge tools could be in place to help with directing and answer questions to the right audience. Tracking tickets and being able to tie customers with specific infrastructure would be a big bonus around managing expectations. Bi-directional metering and control would focus on the ability to track usage information as well as to set the configuration of infrastructure devices through a centralized control structure. Essentially this would be using Configuration and Release management to automatically update and configure Energy Grid supporting devices as well as collection information from various agents. We identified this as having a strong connection between the CA CMDB and SSA, along with feeders from ecoMeter. Eventually this would include this would included tools like Virtual Performance Manager.


10.3.2. Generating Revenue from Excess Energy While CA doesn’t directly focus on the notion of generating revenue as inferred here, it has the potential ability to tie its ecoSoftware products to Service Catalog and Service Accounting. As these products support a combination of metering, data collection, and pricing it could be outfitted with information about rate cards, etc, as described above and turn an Energy Consumer into an Energy Producer or Energy Broker. 10.4. Maintaining Health Transmission Structure While we started to research this area we were not able to do much more than validate the need to include it. Therefore we don’t make any specific recommendations at this time other than to document for purposes of including for further analysis should it be warranted. We have provided the mindmap below for reference.


11. Going to Market - Building the Architecture While the previous section focused on the “what” by identifying market drivers and the approaches to satisfy that demand, this section focuses on answer the question of “how”. Most of our existing customers and partners in the Energy industry focus on using CA’s technology portfolio to satisfy many of the items identified below. In fact a heavy part of this list came from talking with partner organization that has leveraged CA tools to propose industry solutions. Our recommendations more or less were identified by looking at these solution proposals collectively. Below is the high level mindmap of the way we identified the various aspects of how CA Technologies can support the market.

11.1. Core IT Infrastructure (G) When we talked with Energy Producers, Energy Brokers, Energy Consumers, and consulting firms that focus in this area they all identified CA as being a strong player in managing the network. The issue is that an existing network has traditional types of infrastructure device as well as Energy related devices. In addition, leveraging new technology platforms like the Cloud has just started to become a major contributor to their operational architecture. All of this provides a huge opportunity for CA by essentially expanding the scope of its tools to support operational networking requirements of the aforementioned actors. As can be seen by the mindmap provide below we identify three major areas within Core IT Infrastructure:

Security

Health Management

“Edge” Network Management


11.2. Core Energy Transmission Infrastructure (G) In terms of managing the distributed network we see CA having huge opportunities based on the various requirements for controlling locally autonomous operation sites from a centralized policy perspective . The mindmap below identifies the key areas that resulted from our research.


11.3. Managing Adoption of New Services One of the biggest areas we identified in our research was around the notion of looking at Energy Producers and Energy Brokers from the perspective of a set of services. Such actors are constantly in the need to add or revise services that meet the demands of the market as well as the demands of regulatory bodies. While often these demands are met through IT Service Management, they are often fractured in nature involving multiple stakeholders that are not coordinating their efforts. Often we talked about the use of ITIL as a structure framework for tying various operational aspects together. Our recommend supports these findings by suggesting improvements to the IT Service Management portfolio as well as integrations with other products in the Service Assurance space to provide a holistic solution. The mindmap below identifies how we split the challenges into three major areas:

Updating existing infrastructure – leveraging ITSM tools and ITIL to manage infrastructure

Repairing infrastructure -- leveraging ITSM tools to repair distributed infrastructure

Regulatory compliance – leveraging ITSM tools to support the development of content and reporting to ensure regulatory compliance. This might also include process orchestration.


12. Going to Market - Laying out a CA Product Opportunity Roadmap In the following sections we have provided a set of use casts that describe possible roadmaps for various existing CA products. Note that specifics of functionality would need to be reviewed separate from this document. It would be recommended to work with a partner for that activity as they are closer to the specifics of the Energy industry. It may be possible to work with CA clients to provide additional details as well. However, with losing two people on the team, and CA World, we did not have the appropriate time to do an exhaustive exploration of the topic. 12.1. Metering and Data Collection Use Case Value Creation Activity CA Product Status Remote Monitoring as a Service

Consumption Management ecoMeter Needs enhancement

Metering Energy Consumption

Consumption Management ecoMeter Needs enhacements to be distributed.

Energy Governance as a Service

Energy Governance and enviromental performance

ecoGovernance Needs Enhancements

Identity and Access Management

Security EEM, Site Minder, SOA Minder

Needs Enhancements

Federated Cloud Storage Management

Data Storage BrightStore Needs Enhancement

12.2. Data Aggregation and Analysis Use Case Value Creating Activity CA Product Status Federated Cloud Storage Management

Data Storage BrightStore Needs Enhancement


Data Analysis ecoGovernance Needs Enhancements



Needs Enhancements


12.3. Automated Device Configuration Use Case Value Creation Activity CA Product Status Service Provisioning Provisioning Spectrum Automation

Manager Exists

Process Automation Automation Service Workload Automation, IT PAM

Needs Enhancements

Remote Monitoring as a Service

Consumption Management ecoMeter Needs enhancement



Needs Enhancements

12.4. Energy Accounting and Financial Mgmt Use Case Value Creation Activity CA Product Status Metering Energy Consumption

Financial Management ecoMeter Needs enhacements to be distributed.


Energy Governance and enviromental performance

ecoGovernance Needs Enhancements

Service Management Financial Management Service Management (Catalog)

Needs enhancements

12.5. Change Control and Release Management Use Case Value Creation Activity CA Product Status Change Management Change Management CA Service Desk Exists Release Management Release Management CA Service Desk and CMS

(DMS) Exists

12.6. Infrastructure Health Management Use Case Value Creation Activity CA Product Status Energy Production Performance Management

Performance Mangement ecoMeter needs enhancements to be distributed

Change Management Change Management CA Service Desk Exists Release Management Release Management CA Service Desk and CMS

(DMS) Exists

Problem and Incident Management

Problem and Incident Management

CA Service Desk Exists


12.7. Demand Management and Service Provisioning Use Case Value Creation Activity CA Product Status Remote Monitoring as a Service

Consumption Mangement ecoMeter Needs enhancement

Change Management Change Management CA Service Desk Exists Release Management Release Management CA Service Desk Exists Service Availability as a Service

Availability Management Spectrum Service Assurance

Needs enhancement

Energy Production Planing Planing tbd Tbd

Customer Support Support Service Desk Exists

Service Provisioning Provisioning Spectrum Automation Manager

Exists

Incident Management Incident Management Spectrum Service Assurance, Service Desk, IT PAM

Exists


Energy Governance GRC as a Service Needs Enhancements


13. Conclusion The reality is that in putting this report together we realize there is as much he as we left out. There simply was not enough time and resources to do a complete job. We believe the next major steps for CA to evolve this research to the next level include:

Laying out the use cases. We provided a summary of them there. However they are not complete as is and there are more possible that we did not have a chance to fully articulate

Identifying the required functionality of products that would support the energy industry

Create a coalition of partners and customers to validate the results of our findings

Leverage IT PAM to create industry standard process orchestration modules

Leverage Catalyst as a platform to provide for bi-directional communication and policy control

Build content into Service Desk through knowledge tools

Create a full SaaS and/or PaaS offering leveraging our Cloud tools and supporting platforms

Expand the data collection, data mining, and data reporting tools to better coordinate resources

Provide a set of standard services that reflect the Energy industry across actors Even though we could not cover these areas we believe with the material provider herein that there is ample evidence that CA has an opportunity to support this industry if a specific practice is created or the existing ecoSoftware team is expanded past if’s current Data Center focus.

Documents

Energy Management - Business Case