When considering which deployment model if best for their CIS, utilities are dealing with a variety of cloud services to choose from. In order to make a decision at the end of the day, they should pay special attention to their business needs and assess all of the cloud service options to find the perfect fit.
Utilities often face the problem of deciding whether their new Customer Information System (CIS) should be deployed on-premise or on the cloud. Although their decision will ultimately depend on their business needs, each option has a valuable set of aspects to consider further.
Evaluating so many models, terms, and conditions can become overwhelming and can prolong the software selection process. To facilitate the decision-making process, ask yourself these seven crucial questions to help you focus on what matters when choosing between a SaaS and an on-premise CIS.
1. Why should you move towards cloud solutions?
Without a doubt, cloud service models offer an abundance of benefits. IT infrastructure costs are lower because cloud facilitates have access to the latest technology and innovations at a lower TCO. Gartner states that energy providers invest up to 56% of their total IT budget in infrastructure and hosting(1). Facing this, CTOs need to pay meticulous attention to the terms of cloud computing services so that they can solve their current issues and have a seamless digital transformation at a reasonable price.
2. Are you looking for multi or single tenancy?
Tenancy refers to the conditions for using and sharing computing resources. There are two modalities in the market: single and multi-tenancy. To understand this concept in a simpler manner, imagine single tenancy as an apartment where you could move fixtures and appliances, and paint the walls anyway you’d wish. If you lived in a multi-tenant apartment, you would rent it with other people, meaning that any change in the apartment would affect every roommate. In multi-tenancy, it is better to keep everything in place, using only your own room as your private space.
Single-tenancy is the best option for utility companies that prefer dedicated infrastructure or applications, achieving improved security and individual upgrades. Multi-tenancy assures securities and data separation and represents an attractive option for utilities that are willing to share the same resources with others, reaching lower costs and larger computing capacity.
3. Can your business survive without custom functionalities?
When it comes to customizations, SaaS offerings may not be the right option for utility companies. This model includes a shared platform among all companies, only leaving utilities with the ability to configure the software using internal settings but not customize it. If a utility has unique business requirements, they should look for cloud-hosted solutions or single-tenant SaaS solutions so that it is possible to modify the software to meet their specific business needs.
4. How would the charging mechanism change?
Cloud computing services are subscription-based and are entirely or partly by usage-based metrics. Due to this, the services are treated as an operational expense and utilities should check their regulatory accounting model for these expenses. If the regulatory accounting model does not allow a return of the investment through the rate paid by end-users, a utility might be better off opting to purchase cloud services based on a licensing fee, with no usage-based charging. Likewise, CTOs can evaluate the economic benefits of a cloud deployment based on the TCO, forecasting the subscription fees for a defined period and then comparing it to a license-driven offer, finding which one is the most profitable for their business.
5. What do cloud service subscriptions include?
In addition to the right to use the service, all cloud computing services include support and maintenance costs in the monthly subscription. Utilities must establish a clear infrastructure and application support responsibilities before moving to the cloud￼. This is different from on premise offerings, for which vendors provide separate contracts to manage these costs. In some cases, providers will offer additional support at a premium fee.
6. What are your rights when it comes to cloud services?
According to Gartner, if the contracts are subscription-based, software vendors should define rights over the extraction of data. With cloud services, utility companies must keep in mind that they do not hold a copy of the software at the end of the contract. The contract should also contain a detailed service description and all associated responsibilities such as SLAs and security clauses(2).
7. Who is responsible for software updates?
Utilities should define how to handle innovation speed and change management. For instance, software as a service enables non-disruptive updates that occur at the discretion of the software vendor. If the utility company is concerned about how the vendor is managing the updates, they should look for a software vendor that assures continuous delivery of new functionalities. This will give utilities control over the software updates.
With these seven questions in mind, utilities can evaluate all of their options. Because each service model has its own unique characteristics, it is essential that utility companies highlight their most important needs before moving onto the cloud. With a clear definition of their business requirements, the decision will become simpler to make.