Oracle Cloud Infrastructure: What It Is and Why It Matters for Utilities

Cloud-based infrastructure offers valuable benefits for utilities, but many organizations still require the security and control that comes with an on-premise deployment. Other utilities are ready for a full-scale cloud migration but aren’t sure how they can securely and reliably replicate critical IT functions in a cloud environment. And others still would prefer to mix and match cloud-native applications with their existing on-premise applications.

In all of these situations and many more, Oracle Cloud Infrastructure (OCI) provides a powerful, flexible path forward.

In this white paper, we explore:

1. How utilities can benefit from the move to the cloud.

2. How to navigate some common concerns about cloud-based infrastructure for utilities, including security and compliance.

3. How OCI can deliver key benefits of cloud-based infrastructure while retaining the ability to use on-premise apps without disruption and continue storing sensitive data onsite.

What is Oracle Cloud Infrastructure?

Oracle Cloud Infrastructure is a platform designed by Oracle as an all-in-one solution that allows businesses to migrate, build, and run their IT needs from the cloud. Crucially, OCI is designed to support both existing business workflows and new, cloud-native applications.

How Can Utilities Benefit from the Move to the Cloud?

“By working with cloud service providers, utilities can potentially avoid the large expense of operating their own data centers and other computing infrastructure, enabling them to focus more resources on their primary mission—operating the grid safely, reliably, and affordably. Innovation in cloud computing capabilities can drive innovation in how utilities manage their grids.”

– EPRI Journal, “The Grid is Moving to The Cloud"

The cloud allows utilities to continue supporting key IT capabilities while getting out of the business of managing data center(s). Properly implemented, cloud-based infrastructure can match or exceed the reliability of on-premise infrastructure. And all while offering far greater operational (and financial) flexibility compared to purchasing/managing/maintaining servers and other computing infrastructure.

But the cloud is about more than just streamlining IT operations. The scalability of cloud computing opens new possibilities entirely, with the utility able to call on huge quantities of processing power when it’s needed. This enables new methodologies like enterprise-scale machine learning, which require computing power that would be cost-prohibitive for utilities to support in-house.

The need for computing power will only grow as, for example, utilities work to manage more dynamic, renewable-heavy grids. Oracle provides an interesting case study here on how the United Kingdom’s National Grid ESO leveraged OCI to achieve 40% performance improvements in its machine learning models for predicting energy supply. For a deeper look at how alternative energy is creating more dynamic challenges for utilities, please see our article here. Even for utilities that aren’t ready to dive into machine learning today, beginning to store data in the cloud is a great way to begin building a foundation for future analytics—historical data provides crucial fuel for ML algorithms.

The most impactful cloud platforms, like OCI, will drive value both today (when they can be used to host core applications like billing, financial systems, and the CIS) and tomorrow (when they stand ready to be expanded to machine learning and beyond). And while the utility industry was initially slow to adopt cloud-based solutions, organizations are increasingly coming to recognize their value and long-term necessity.

Crucial Benefits of Cloud Infrastructure for Utilities

Accenture’s report “What’s Driving Utilities to the Cloud?” notes that “…energy providers invest up to 56 percent of their total IT budget in infrastructure and hosting. Moving to the cloud can help cut down these costs significantly. Utilities’ annual average IT infrastructure spend is $624 million. In Accenture’s experience, moving to the cloud could potentially help save costs between $70 million and $168 million.”

Cost savings are a huge underlying benefit of cloud infrastructure, but it’s important to recognize that these direct savings on infrastructure maintenance are only one piece of the puzzle when it comes to the cloud’s overall value proposition. Other important benefits include:

1. Strategic Agility: Cloud infrastructure offers the ability to trial new capabilities without large sunk cost investments, dramatically reduced cycle times for changes/new feature deployment, and easy access to the computing power needed for the latest and most demanding Big Data analytics capabilities. More broadly, the ability to spin up new digital capabilities without large upfront costs allows the utility to experiment more freely with new functions and tools.

2. Scalability: The cloud effectively provides “infrastructure on-demand” that can be readily scaled, allowing organizations to closely align spending with their actual needs. Cloud-based computing offers an elastic quality that onsite infrastructure can never match; utilities can expand their platform during a high-need period such as a storm or during quarterly financials, shrinking back down when work returns to normal.

During “gray sky” situations, for example, cloud infrastructure can seamlessly flex to a far greater number of users, while scaling back the user count to reduce costs when skies return to blue. Cloud infrastructure means that utilities no longer need to pay for an excess system that goes unutilized most of the year.

3. Reduced Management Overhead: Cloud-based infrastructure allows utilities to get out of the business of running onsite data centers, freeing up more time for IT to focus on value-added work and innovation, all while bringing down maintenance and other overhead costs. Looking forward, the cloud makes infrastructure management needs much more predictable to staff and budget.

4. Security: Protecting sensitive data and maintaining regulatory compliance is demanding work that requires constant attention to new updates on the latest threats. A quality cloud infrastructure provider will benefit from economies of scale that allow them to institute far more robust protections than would be available to most utilities in-house. The move to the cloud can offer improved protection while reducing the need for dedicated security expertise on staff.

Nevertheless, the transition to the cloud can create novel security and compliance issues compared to on-premise infrastructure. Fortunately, a “hybrid” approach can offer a valuable combination of on-premise data security with cloud-based analytics capabilities (we explore this option in greater detail below). Furthermore, leading cloud vendors like Oracle have instituted more advanced protections than ever. And while every solution will have its risks, storing confidential data in the cloud is now incredibly safe, in keeping with on-premise solutions. This resource provides an in-depth look at OCI’s security architecture, a full-stack approach featuring automated patching and always-on encryption and monitoring at both the infrastructure and database level.

5. Resiliency and Disaster Recovery: A robust cloud infrastructure solution will offer built-in backup and disaster recovery capabilities, eliminating the need to maintain additional infrastructure or pay for a separate DR vendor. The best cloud infrastructure providers can avoid downtime during backups while ensuring minimal downtime for patching (Oracle, for example, promises at least 99.5%+ uptime for all of its different cloud infrastructure services, with most SLA’s even higher ).

Key Concerns for Utilities Managing the Shift to the Cloud: Stability and Security

The benefits above establish a strong value proposition for transitioning to cloud-based infrastructure. But in our experience, many utilities have very legitimate concerns about what migrating to the cloud would look like in practice. Utilities depend on their onsite infrastructure to securely run business-critical applications, and it is imperative that they stay up and running during the switchover.

A well-managed migration is essential to achieve minimal disruption while offering a short runway to the benefits of cloud-based infrastructure, and utilities are right to not dive in head-first without meticulous planning.

Security remains another prominent concern. A 2019 survey by Oracle suggests that a clear majority (71%) of utilities now make use of cloud software and 64% call the cloud “critical to my company’s future success.” But these same respondents also report widespread concerns about security, with 85% concerned about security (which is rated as the number one barrier to expanded cloud adoption). Notably, respondents reported that their concerns “were not around the security of cloud computing technology itself, but rather a growing barrage of sophisticated cybersecurity threats,” with vulnerabilities emerging everywhere from IoT devices to field area networks in an increasingly interconnected infrastructure ecosystem.

Finally, many local regulators don’t allow utilities to earn profits on cloud investments, which are treated as Operational Expenditures (OPEX), a potential hurdle for some utilities. More broadly, however, the move to OCI can drive accompanying cost reductions such as discontinued support costs for Oracle and third-party tools, reduced labor costs due to streamlined administration, and eliminated server/data center costs (while also eliminating the need to maintain costly excess capacity to accommodate peak usage times).

Storage

Storage: fast, scalable, and highly reliable storage with built-in security features like tenant isolation, least privilege access, and data encryption at rest.

By providing on-demand local, object, file, block, and archive storage, OCI can address a broad array of storage needs and applications. High-performance storage is available, for example, for computing storage, while lower-cost options can be used for functions like archiving.

Compute

Compute: flexible, high-performance computing capacity that can quickly scale up to accommodate virtually any workload.

OCI’s compute capabilities include everything from customizable virtual machines to bare metal compute servers to NVIDIA GPU-powered machine learning, effectively giving utilities access to computing power that would never be economical to deploy on-premise.

Containers

Containers: an integrated Kubernetes-based container engine can help bring down the cost for utilities to deploy new cloud-native applications.

This container engine is included as a free service, allowing for simplified DevOps with automatic update and patching functionality.

BI & Analytics

BI & Analytics: the Oracle Analytics platform is compatible with cloud, on-premises, and hybrid architectures (with a cloud-based automated data warehouse built in).

With built-in services covering a wide variety of analytics applications, OCI provides end-to-end tools for data ingestion, modeling, prediction, visualization, collaboration, and more (with advanced, integrated functionality like machine learning and natural language processing). We take a deeper look at how analytics can help transform utility operations in our guide here.

Machine Learning & AI

Machine Learning and AI: prebuilt, in- database machine learning models, a variety of Oracle AI Apps, and even chatbots are available “out-of-the-box” and trainable with unique utility data.

With baked in capabilities like AI-driven speech-to-text and image analysis, OCI provides a robust launching pad for utilities seeking to harness AI anywhere from financial projections to customer service.

Application Integration

Application Integration Services: pre-built APIs and supporting integration services offer a streamlined solution for integrating external applications and data sources.

OCI provides centralized application management, process automation, and full API lifecycle management tools. powerful capabilities which dramatically simplify integrating external applications and data sources with your cloud environment.

How OCI Makes Life Easier for Utilities: A Flexible Runway to Cloud (or Hybrid) Solutions

OCI’s flexibility means that utilities will no longer need to pull the plug on existing on-premise infrastructure and applications in order to begin taking advantage of the immense value the cloud can offer. OCI need not replace your current infrastructure! Instead, it provides a platform that supports both the deployment of applications currently run on-premises and the freedom to switch to cloud-native applications when the organization is ready.

OCI makes it easy to execute a streamlined “lift and shift” strategy: shift existing resources and applications without re-architecting them. Applications can be moved as-is to the cloud, for now, and shifted to a cloud-native format when it proves advantageous and non-disruptive for the business.

This flexibility effectively allows OCI to offer utilities “the cloud without the headache.” For utilities that are eager to begin implementing cloud-based functionality but not yet ready to “flip the switch” on all existing applications, OCI provides an ideal bridge to the future. And for smaller utilities, OCI provides an easy way to begin utilizing cloud-based applications without requiring a sprawling migration of all existing applications upfront. For functions that are ready to be migrated to the cloud, OCI offers a full suite of services including data replication, transfer, storage, and visualization.

OCI’s capacity for a strong, reliable connection between on-premise and cloud systems keeps all of these options on the table with minimum hassle. Robust integration between cloud infrastructure and on-premise systems allows for a streamlined hybrid approach: utilities can mix and match cloud and on-premise functions as the business requirements. Sensitive data can be kept secure and compliant on-premise, with application-level integration allowing it to be seamlessly used by, for example, cloud-based analytics and reporting tools. Instead of existing in two different digital worlds, on-premise and cloud data can be brought together as required by the utility’s evolving needs. This capability allows for a variety of possibilities such as:

Most organizational data is kept on-premise, with only analytics data stored in the cloud.
Data is moved to the cloud on an as-needed basis, then discarded, keeping core data stored on-premise.
Data remains on-premise and visualization takes place in the cloud, data and visualization are synced in real-time.

We highly recommend that all Oracle Utilities begin exploring OCI now. This platform provides an outstanding opportunity that can drive immediate value without requiring every existing technology to be reinvented immediately. Every utility will bring very different operational needs and priorities to their cloud migration, and thoroughly planning your migration to OCI remains essential. Our experience suggests that the best approach will vary on a case-by-case basis. For some utilities, we recommend starting by moving departmental data into the cloud. For others, the right approach is to move reporting and analytics functions to the cloud-first, keeping data on-premises for ease of compliance. Finally, some utilities are further along in their cloud journey and may be ready to go “all in” and transition all of their on-premise systems to OCI.

More broadly, transitioning to the cloud makes it easier to remain on the cutting edge of evolving technologies while benefitting from substantial security and performance advantages compared to on-premise alternatives. Crucially, OCI can deliver these performance advantages while affording much greater flexibility in IT staffing. The utility workforce is aging fast, and the market for IT talent is tougher than ever. OCI reduces the need for dedicated IT staff, with Oracle taking responsibility for time-consuming security and performance management work. This added flexibility helps free up the utility’s internal resources to focus on value-added, functional projects rather than technical infrastructure support.

Ready to start planning your Oracle Cloud Infrastructure transition strategy?

If you’re ready to start developing a more detailed plan for migrating key functions to Oracle Cloud Infrastructure, our team is ready to help. We have extensive experience helping utilities transform their approach to data. The HEXstream team works with Oracle on a regular basis and has multiple cloud-certified resources.

Our team can develop a strategic roadmap for your cloud migration and see it through to successful completion without disrupting your business. We start with a thorough review of the current on-premise technology stack and how it’s being used by the utility. Based on this initial analysis, we create a detailed plan for migrating current on-premise capabilities to the cloud. As part of this initial planning, we can also determine if a hybrid or cloud-only model is the best fit. For utilities that currently rely exclusively on on-premise systems, a phased, incremental migration effort helps minimize disruption. For organizations that are already accustomed to some cloud-based applications, the migration may be accomplished with greater speed.

Our approach is tailored to mitigate potential risks and concerns associated with a major migration. A gap fit analysis helps ensure that all current functionality is replaced in the cloud. Ongoing latency monitoring helps ensure a smooth working experience. And rigorous project management practices and usage monitoring help ramp down unneeded subscriptions, control costs, and fight scope creep.

Ready to Start Planning Your OCI Migration?

Oracle Cloud Infrastructure:

What It Is and Why It Matters for Utilities