adaptation of cloud based saas applications ......saas provider. the cloud based infrastructure...

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ADAPTATION OF CLOUD

BASED SAAS

APPLICATIONS

POWER UTILITIES

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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

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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.


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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


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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.

http://www.ibm.com/cloud-computing/us/en/


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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.


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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.


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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


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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.


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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.

https://www.parkersoftware.com/blog/communication-technical-support-and-the-pictionary-problem/


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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.


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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


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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

.


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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.

adaptation of cloud based saas applications ......saas provider. the cloud based infrastructure...

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