20130308-.pptx

Outsourcing model and Cloud ServicesPedro EnesInformation Systems Division of EDPHead of Infrastructure Servicespedro.enes@edp.pt

EDP/DSI 2

Main brands worlwide

Who is EDP

Portugal

Spain

Brazil

Renewables

EDP/DSI

EDP… A reference company in the Iberian market with a strong presence in Brazil and considerable investments in the USA…

3

U.S.A.

Generation capacity

3,422 MW

Energy generated

9,330 GWh

Europe

Generation capacity

3,977 MW

Energy generated

7,301 GWh

Generation capacity

1,790 MW

Electricity

7,873 GWh generated

24,544 GWh distributed

2,832 thousand customers

Generation capacity

3,886 MW

Electricity

10,747 GWh generated

9,517 GWh distributed

1,016 thousand customers

Gas

48.447 GWh generated

788 thousand customers

Generation capacity

10,380 MW

Electricity

22,974 GWh generated

46,508 GWh distributed

6,054 thousand customers

Gas

7,138 GWh generated

272 thousand customers

Brazil

Generation capacity

84 MW

Energy generated

170 GWh

Portugal

Spain

Brazil

Renewables

EDP/DSI 4

Sector

EDP

•Portugal | liberalization of partof generation portfolio (July2007)

•Spain | full liberalization

•14.3 GW installed capacity, mainly hydrolectric and coalpower stations and CCGT´s

•33.7 TWh produced in 2010

•Regulated Monopoly

•Assets managed by state-owned company

•Regulated by ERSE in Portugal and governmentin Spain

•EDP owns a 3,5% shareholding in thePortuguese operator

•Regulated monopoly

•Performance-basedremuneration

•Set of standards governingquality of supply

•Regulated by ERSE in Portugal and government in Spain

•56 TWh of electricity distributedto regulated or liberalizedcustomers

•Portugal | fully liberalized•Spain | fully liberalized

•29.7 TWh commercialized inliberalized market

generation transmission distribut

ion

supply

…present in almost whole electricity value chain…

EDP in the Iberian Peninsula

EDP/DSI

…and also in the value chain of the gas sector…

5

•Portugal – regulated monopoly

•Spain – fully liberalized

•Long-term contracts inPortugal and Spain to supplypower stations and EDP customers

•Regulated monopoly

•Assets managed bystate-owned company

•Regulated by ERSE in Portugal and governmentin Spain

•425 k m grid in Spain

•Portugal and Spain – regulatedmonopoly

•Performance-basedremuneration

•Set of standards governingquality of supply

•Regulated by ERSE in Portugal and government in Spain

•Portugal• 7.1 TWh• 271 thousand distribution

outlets• 4,125 Km of grid

•Spain• 48.4 TWh• 994 thousand distribution

outlets• 9,690 Km of grid

•Portugal – fully liberalized

•Spain – fully liberalized

•Portugal• 6.8 TWh

•Spain• 27.7 TWh• 788 thousand customers

Sector

EDP

collection transport distribution supply

EDP in the Iberian Peninsula

EDP/DSI 6

… and a world top player in renewable energies

•Fully liberalized

•Remuneration associated with thepool plus premiums, through “feed-in” tariffs or through a system ofgreen certificates

•Operates through NEO Energia in Portugal, Spain, France, Belgium, Poland, Romania, Italy and United Kingdom

•7.3 TWh generated

Europe

•Fully liberalized

•Remuneration negotiated in contracts withlocal distributors or direct sale to the market

•Incentives to generation through taxbenefits, Government grants for investmentin financial assets and accelerateddepreciation of equipment

•Operates through Horizon Wind Energy•9.3 TWh generated

North America

Sector

EDP

EDP/DSI 7

IT challenge: support new business opportunities based on agility and new services, but with cost reduction

Reduce globalIT Costs

Adapt systems due to the gradual liberalization of the

electricity market

Create

value to

business

New

services &

better

relationship

“Global CIO strategies focus on creating new infrastructures for growth and efficiency. Outsourcing continues to be a core delivery approach.”

EDP/DSI 8

Different sourcing models where adopted to better support the company strategy and market change…

Full

Outsourcing

(2005-2015)

Full Outsourcing

(2005-2015)

New Datacenter

Operations

(2010-2013)

Facilities

Infrastructure Operations

Facilities

Hardware

Application Operation

External

SaaS

PaaSExternal

(IaaS)

Hardware

• Focus on core

business

• Outsource non-core functions (IT

and Telecom)

• Reduceoperational costs

Support a Iberian Strategy

• Datacenter consolidation(optimization)

• Disaster Recovery (reduce

operational risks)

• Reduce operational costs

• Create conditions to negotiate the end of the Full Outsourcing contract (2015)

• Adopt more agile model

(remove contracts lock-in)

• Less risks on future renegotiation (avoid complex service transitions)

• Reduce operational costs

2005 2010 2013

Sector Portugal Portugal + Spain + USA Global

Ch

alle

ng

es

So

urc

ing

mo

de

l

EDP/DSI 9

… with strategic projects that created the conditions for the incoming transformation of the service.

Mainframe

Migration

• Optimize future

Disaster Recovery

• Fix service problems

• Reduce costs

• Remove vendor lock-in

20082005

Network isolation

• Optimize future Disaster

Recovery

• Define EDP Network

Topology and policies

• Document EDP systems

• Document application

interfaces

New Datacenter

Support Iberia strategy

• New Datacenter

Iberia Consolidation

& Disaster Recovery

• Based on EDP defined

Network Topology

• New sourcing model,

Agility & Cost reduction

(EDP owns assets &

Facilities)

New model

Common model for all

Datacenters

• Cost reduction

- EDP owns assets

- Focused on service

- Allow the integration with

external services

- No lock-in

• Allow better conditions

on future contract

renegotiations or RFPs

• Application

management &

operations improved

2009 2010-2011 2013

EDP/DSI 10

A common model for all the Datacenters

The new model defines 3 layers of modular services :

1. Application Operations: focused on the availability and

management of the applications , with the participation of the

Application Maintenance provider and Infrastructure Operations

provider – business view

2. Infrastructure Operations - focused on the availability, and

management of the infrastructures – technological view +

business view requested by Application operations

3. Facilities – focused on the infrastructure facilities – availability,

physical security and environment

Advantages:

1. Focused on service, not on the “capacity of servers”

2. Lock-in avoided – No migrations – all the operations reside on

EDP infrastructures and tools.

3. Elastic – the price model considers different “baselines”, for

each layer – “pay-as-served”

4. Allows integration with external services – Cloud, services or

other “as-a-service” solutions

But … as in Cloud services, the increase of the number of managed service providers and layers,

make service integration and multisourcingmanagement two of the major challenges for the IT organization; This will lead to new skills and processes in service

control and management.

Infrastructure Operations

Facilities

DC 1

Application Operations

External

SaaS

PaaS

Other Management

ServicesExternal

(IaaS)

Hardware

Facilities

DC 2

Application Maintenance, Projects, Other Services

EDP/DSI 11

Keypoints

• Plan in advance – avoid lock-in, get use of the opportunities - define a model that creates better conditions in future renegotiations.

• Start planning transformation projects to obtain savings and create better conditions for our business and future models.

• Consider the use of external services (like cloud services) as a part of your global service, allowing gradual or specific implementations.

• Define models that reduce future impacts with the transition to new services – Not everything is documented. Be prepared for the unknown.

… also for Cloud Services. Pay attention to the contrat exit conditions.

• Define the right pricing model for you - based on your future evolution – P*Q; ARC/RRC; Volume discount.

• Focus on service. Change the “quality of service” perception of the provider

• Clarify responsibilities before the implementation of the defined module. All providers participate – their participation on Application Operations is key!

• Proximity – select key personnel and representatives that will work near the customer

• Multisourcing lead to new skills and processes in service control and management. The client must participate and take decisions.