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Sep 2015 - Business Strategy - Doc # EI258590

Business Strategy: Making the Case for SaaS in Utilities

Authors: Erik Berggren, Marcus Torchia, Robert Eastman, Jill Feblowitz

This IDC Energy Insights report builds on Perspective: Cloud and the Capex Conundrum in the Utility Industry (IDC Energy Insights #EI251305, September 2014) and explores the issues raised in the previous report in much deeper detail. IDC Energy Insights has built a financial model to demonstrate a capex versus opex treatment of a SaaS deployment of a typical customer information system (CIS) for a utility with 1 million customers to illustrate the difference in deployment approaches. Guidance is provided to utilities, regulators, and vendors that are evaluating the treatment of IT investments.

"The technology advancements of today are being developed in cloud applications first, not necessarily in on-premise applications," according to Jill Feblowitz, VP, IDC Energy Insights. "At a time when utilities need to evaluate and adopt current and emerging technologies more aggressively, regulators, shareholders, stakeholders, and ratepayers need to take a closer look at the true economic impact of the traditional capex/opex model to determine whether the numbers, in fact, make sense for all parties."

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