Perspective: Utility Offerings Shine at Oracle OpenWorld

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1 Perspective Perspective: Utility Offerings Shine at Oracle OpenWorld Roberta Bigliani Jill Feblowitz Marcus Torchia Robert Eastman Robert Parker IN THIS PERSPECTIVE This IDC Energy Insights Perspective summarizes Oracle's utilities offerings at Oracle OpenWorld 2014, which took place in San Francisco, California, from September 28 to October 2. There is nothing like attending Oracle OpenWorld to remind you how important Oracle is as a technology supplier. Tens of thousands of people attending thousands of sessions addressing the hundreds of products and services in the Oracle portfolio is an amazing act of orchestration, and the conference was extremely well done. Last year, the buzz at the conference was around Larry Ellison not showing up for one of the keynotes in favor of attending the America's Cup race that was going on. This year, Ellison showed up at all the appointed times and did a great job of discussing the company's cloud strategy. Joking that he now had to do his own demos (he recently took the title of CTO, relinquishing the CEO's role), he showed how applications can be moved from on-premise to the cloud in a very simple way. While the "just push a button and everything goes to the cloud" can be considered an exaggeration, there are, in IDC Energy Insights' opinion, two important elements of the Oracle approach: There is portability between deployment options (on-premise, private cloud, and public cloud) that create options for the IT organization to better support enterprise requirements for flexibility. The in-memory database approach, part of the core cloud platform, supports both row-based (for efficient transaction processing) and columnar (for efficient analytics processing) architecture simultaneously. This approach allows the IT organization to reduce the amount of database support it needs while increasing the level of analytics and reporting it can provide. This approach is important for utilities that are able to take a cloud approach, primarily small to midtier municipals or cooperatives not tied to the rate recovery structure of the investor-owned utilities. That said, all types of utilities are currently adopting cloud for specific functions, such as analytics or environmental health and safety. We expect that, in the next few years, cloud will be a standard part of the utility IT portfolio. Oracle has a general commitment to transitioning utility applications to the cloud, so it will be ready. The acquisitions of DataRaker and TOA Technologies have sped the development of Oracle's cloud applications. We liked what we saw in DataRaker, Oracle's utility "analytics in the cloud" option that utilities have adopted for customer and operational analytics. The underlying architecture has been November 2014, IDC Energy Insights #EI252333

2 modernized, which is a good thing. TOA Technologies is an example of a company's interest to quickly have a native cloud solution for the mobile workforce management (MWM) domain. The existing Oracle Utilities MWM product will continue to be offered to the utility and businesses that need sophisticated routing and scheduling capabilities. Beside those acquisitions, road maps for customerfacing and most operational applications include cloud options. Still, many utilities are working with traditional in-house applications. For those utilities, the message that came out loud and clear from the Oracle Utilities Capgemini partnership was that utilities can shorten implementation and upgrades by using an integrated solution based on an integration platform built specifically for utilities and implemented by Oracle partners. And that it is up to utilities to give up on their love of customization to achieve the benefits of packaged software. The Scoop The CIO View Portfolio, Analytics, and Integration There is no question that Oracle brings an impressive portfolio of software and hardware technologies as part of its software and engineering foundations, as well as a strategic understanding of the challenges facing the utility and energy sectors. Oracle's challenges, then, are more in developing, consolidating, and focusing and integrating solution offerings that meet Oracle's vision and the industry's challenges. Oracle does a creditable job demonstrating and talking to the many challenges facing the industry; Oracle backs this up with robust industry road maps that attest to the company's ambition to be the operational end-to-end utilities solution. This is an ambitious goal, especially for a vendor that has constructed its utilities offerings with a number of acquired solutions. Oracle does a particularly good job addressing the pace of change that is imposing itself on the utility industry with increasing urgency. As the trend lines point toward the need for more real-time or nearreal-time access to data and decision making, Oracle is recognizing this and responding to this with specific solutions like Oracle's Utilities Express Solutions delivering prepackaged workflows, best practices, geographic configurations, and prepackaged training that supports a reduction in projectrelated work effort. When Oracle delivers these together on-premise or as a cloud deployment with the Oracle Red Stack and Advanced System Management as a working technical system, the savings in work effort could be even greater. Analytics Oracle has likewise invested considerable attention and focus to its analytics solutions, principally offered in its previously mentioned DataRaker solution. As analytics becomes ever more embedded in more processes throughout the utility, Oracle's analytics strategy is built on four component offerings: analytics tools to do ad hoc analysis, Oracle Utilities Data Model (OUDM), cloud-based analytics from DataRaker, and Oracle's prepackaged operational dashboards (Oracle Utilities Analytics). The OUDM, Oracle Utilities Analytics, and DataRaker are built and targeted for the utility industry. DataRaker plays a prominent role in conversations about analytics among Oracle utilities customers, and in customer presentations at Oracle OpenWorld. Oracle's analytics road maps also talk about the company's 2014 IDC Energy Insights #EI

3 overall set of analytics tools (Oracle R Enterprise and Data Mining; Oracle Exadata and Exalytics; Oracle Endeca; Oracle Essbase; Oracle Event Processing; Data Warehouse; and KPIs and reporting). Oracle is anticipating the arrival of predictive analytics, and the company has identified the areas of transformer failure and theft correlation, and line lost test for underground service monitoring as next steps for the study of predictive analytics. Expect to see an expanding set of use cases for DataRaker and for predictive analytics, in particular. A Lot More with Integration Where a vendor has the breadth of solutions and capabilities that Oracle has, integration is always of interest to companies. This is particularly true of Oracle as it has built and acquired various utility business applications to serve a substantial portion of the business processes at utilities. Oracle has assembled all of its utility business and operational applications into solutions for customer, metering, work and asset management (WAM), and network/grid. Across all of these solutions, Oracle is optimizing business processes for interoperability and data management. Oracle now has prebuilt SOA integrations available for the following solution areas and related business and operational processes across its transactional applications: Customer network/grid: Outage care Customer: Order to bill; financials; bill print; self-service Customer metering: Meter to cash Metering: Meter data and commands Metering work and asset: Device operations; field work Metering network/grid: Outage operations Work and asset: Project management As a further enhancement, Oracle is also releasing its next-generation applications on its common Oracle Utilities Application Framework (OUAF). OUAF provides a common technology and modernized designs that each of its transactional applications inherit. Oracle has put considerable effort into building with OUAF, and it shows. OUAF is now enabled for the latest versions of: Customer: Customer care and billing Work and asset: Mobile workforce management Metering: Meter data management Metering: Smart grid gateway Work and asset: Operational device management Integration is a key and important message for Oracle, given the market perception that competitors can talk more about being built from the ground up. As the focus for many businesses has shifted to faster business processes, reducing process latency, and quicker access to data for faster decision making, expect to see Oracle ramping up its messaging around integration IDC Energy Insights #EI

4 The Customer View Address New Business Models and Reduce Time to Market Oracle released several new features and functionalities related to the suite of products focused on customer operations and metering. Oracle Customer Care and Billing (CC&B) 2.4, for instance, now manages net metered billing, billing for electric vehicle charging stations, prepaid metering, rate check, and what-if analysis using AMI. The rating engine has also been enhanced with the ultimate goal of allowing utilities to significantly reduce time and effort to set up and maintain rates. Also, the management of customer program life cycle has been enriched with the possibility to track communication preferences, segment customer base, generate and manage leads, manage marketing campaigns, and analyze results. At the same time, Oracle Utilities Analytics 2.5 included new prebuilt insights to reduce the need to build customized analysis, and consequently reducing cost and accelerating root-cause analysis. New interesting features and functionalities were released also for Oracle Customer Self Service (2.1) and Oracle Meter Data Management (2.1). We already mentioned the cloud move Oracle Meter Data Management and Oracle Customer Care, Oracle Utilities Self Service, and Billing in Oracle Cloud are coming. Service companies are paving the way Oracle Meter Data Management and Oracle Customer Care and Billing are hosted by IBM; Wipro offers Oracle Customer Care and Billing managed services; and Accenture offers Oracle Customer Care and Billing in the cloud, just to mention a few. To lower the cost of delivery for on-premise, Oracle is making available implementation accelerators (Meter-to-Cash Express for Electric and CC&B Express for gas, water, and electric) and is working with its ecosystem of partners to have them do the same. The ultimate goal is to make it more affordable and less risky for utilities to consider old legacy meter-to-cash solution replacement. Last but not least, Oracle is pre-integrating all available solutions creating a customer technology platform. The Operations View Investment in Product Oracle's Network Management System (NMS) product is operational technology for utilities. Because NMS is a real-time solution (not transaction based), it is written on a different platform from the utility transactional applications like CC&B, WAM, and MWM. In December 2013, Oracle migrated NMS from ETL to the less-computing-intensive ODI/OGG technology, certified it for 12c, and created new dashboards for the product. Looking ahead, NMS will incorporate more advanced distributed energy resources/distributed generation (DER/DG) models that can be aggregated up to each transformer or load point for more accurate real-time and predictive analysis. Some Oracle customers we talked to are cautiously optimistic about the NMS' DER/DG capabilities. Interoperable SCADA vendor support, which has been in planning for a couple of years now, will come in the next months. Knowing the disparate utility SCADA portfolios at many utilities, this should be a priority. DataRaker has more use cases for utilities in the operations area. One major investor-owned North American utility told us about the company's future use of the product to analyze smart meter and other operational data for outage notification, asset monitoring (transformer and cable), Volt/Var, and conservation voltage reduction. Another investor-owned utility has used predictive analytics to reduce transformer failure by 20%. In addition, this company uses the analytics tool to improve its network connectivity model IDC Energy Insights #EI

5 Utilities are actively pursuing transformer-loading analysis for asset maintenance and for network management. An evolving capability is the transformer overload analysis that incorporates weather data and other vectors that give utilities an ability to manage the network with better precision. Oracle's analytics for this analysis is preconfigured to know network connectivity, perform aggregation, and find peak loading transformers. Once identified, and knowing the equipment characteristics and forecast weather, potential overloads can be identified and actions recommended. This does not always mean replacement of a transformer, but it may simply call for load shedding or circuit switching. Another benefit of the transformer-loading analytics capabilities is a utility can identify transformers that are oversized for a circuit's (peak) demand; these transformers could be considered as "transformer inventory." The Net Net Overall, the most important message coming out from all these releases, and the ones that will come in the near future, is Oracle's strong commitment toward making it possible for utilities to operate with new business models, more easily improve customer experience and operations, and significantly shorten the time for new implementations or upgrades, while at the same time reducing related costs. Very high hopes, it is true, but several investments prove things are going in that direction. LEARN MORE Related Research IDC MarketScape: Worldwide Enterprise Asset Management Software for Power Generation, 2014 Vendor Assessment (IDC Energy Insights #EIOS05W, July 2014) IDC MarketScape: Worldwide Enterprise Asset Management Software for Energy and Water Delivery Utilities, 2014 Vendor Assessment (IDC Energy Insights #EIOS06W, July 2014) IDC MarketScape: Worldwide Utilities Mobile Field Force Management Software, 2014 Vendor Assessment (IDC Energy Insights #EIOS04W, July 2014) Perspective: Oracle, SAP, and In-Memory Analytics in the Utility Industry (IDC Energy Insights #EI249367, June 2014) 2014 IDC Energy Insights #EI

6 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com Copyright Notice Copyright 2014 IDC Energy Insights. Reproduction without written permission is completely forbidden. External Publication of IDC Energy Insights Information and Data: Any IDC Energy Insights information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Energy Insights Vice President. A draft of the proposed document should accompany any such request. IDC Energy Insights reserves the right to deny approval of external usage for any reason.