Contact Energy shoots for 100 per cent public cloud in 2019
- 05 June, 2018 06:45
Contact Energy is continuing its ambitious shift from a fully hosted ICT environment into public cloud for all business applications.
Contact successfully migrated its SAP applications out of its own environment into an Amazon Web Services (AWS) and Revera hybrid cloud in August 2016.
In December, the business dropped the Revera component to take its core SAP applications and Microsoft Exchange footprint fully onto public cloud.
But that is not the end of the journey, as the the head of Contact's ICT solutions centre, Hanno Schupp, told an AWS forum last week.
Schupp's team is now aiming for an August migration of its Tibco, Oracle and WebSphere software to public cloud before achieving a total shift of all business applications to public cloud by March 2019.
Schupp did not respond to emailed questions about the migration, but a presentation from the AWS forum posted online sheds light on the strategy and roadmap, as well as the challenges and benefits of the changes.
Specifically, the shift was prompted after majority shareholder Origin Energy sold its $1.8 billion, 54 per cent stake in Contact in August 2015, shortly before the company's major supplier ICT contracts ended.
The forced decoupling from Origin presented the opportunity to "make changes fast", Schupp told last week's forum.
Cloud offered lower cost of ownership and better response times, he said, while also supporting high levels of agility and quick turnaround innovation.
One example of that was the introduction of an online self service system based on SAP's Multi Channel Foundation, which Schupp has previously said delivered an improved customer experience, a more responsive user Interface and increased speed to market - despite SAP's proprietary version of HTML5.
The hybrid solution with AWS and Revera rolled out in 2016 was only a temporary stage, however. Schupp said the AWS platform not only "just works", it also outperforms New Zealand-hosted private cloud.
There are still limitations, however. Schupp said some SAP features lack support on AWS and advised users to research support for specific operating systems, database management systems and SAP releases.
Some support may also not meet expectations, he added, and users may have to consider "augmentation" when required.
However, Contact Energy's hosting costs have already halved and will be down to a third in 2019. Those savings require work, though.
Schupp told the forum audience to prepare for a sustained three- to six-month optimisation phase - it's best to optimise after go-live, he added, because otherwise "your thinking will be limited to your pre-cloud experience".
Users should also invest in automation because repeatability and speed in server build and management is an asset.
The benefits of these technology shifts are flowing for the business. In April, Contact CEO Dennis Barnes told shareholders the company recorded customer switching, or churn, of 19.1 per cent over the previous 12 months, 1.8 percentage points below average.
"The ongoing migration of systems into the cloud continues to deliver benefits by lowering operating costs, improving performance, bolstering security and enhancing the flexibility of our information technology platform," he said.
"As a result of our ongoing work in the customer business, the cost to serve our customers is down 11 per cent on the prior comparative period. We are also seeing customers advocate for Contact in greater numbers with a Net Promoter Score of +15 for the period, up from +12 in the same period last year and +14 for the 2017 financial year."
Aligned to AWS
Contact is not the only energy utility to make the cloud shift with AWS, with retailer Mercury Energy also taking the plunge.
According to AWS country manager of New Zealand, Tim Dacombe-Bird, the vendor's message is clear and of particular appeal to utilities.
Firstly a shift to the cloud will help businesses retire technical debt - the burden of managing and developing legacy environments while secondly, public cloud will enable innovation and speed to market.
Within those two, there are five prominent use cases to make the cloud migration.
Users with expiring leases on data centres or expiring supplier contracts are being offered an option other than the status quo, with AWS also pushing its platform for users seeking to migrate off expensive DBMS platforms to AWS Aurora.
Thirdly, users wanting to migrate enterprise software now have a new option. Dacombe-Bird said one, the New Zealand Defence Force, stood up a replica of its environment in 90 minutes.
Fourth is providing a platform for Microsoft applications and fifth was organisations wanting to migrate VMware assets.
"Utilities generally have each of those technology stacks," Dacombe-Bird added.
Furthermore, they also operate in a mature market where growth comes from their competitor's churn.
Utilities are also interested in business intelligence insights and big data. Shifting disparate databases onto AWS can enable them to create "data lakes", breaking down data silos to open the door to new kinds of analytics and machine learning.
"The decision to move to the cloud doesn't need to be made any more," Dacombe-Bird said. "It's more about 'how do I?'"