The energy sector is one of the most complex zones of the global economy.
It is subject to volatile commodity prices, regulatory flux, shifting politics regarding climate change, and seesawing consumer demand exacerbated by the adoption of rooftop solar and private battery storage systems.
Energy sector success depends on companies’ ability to respond rapidly, to interpret vast collections of data drawn from multiple sources and to act on it in near real time.
With that front of mind, AGL Energy is undertaking a massive cloud transformation.
Over the next two years, more than 200 applications currently running in AGL’s data centres will be transitioned to the cloud.
But this is no ‘lift-and-shift’ project where the status quo is maintained by just transferring applications from on premise computer systems to the cloud.
Instead, each and every application being transitioned to Microsoft Azure will first be upgraded to ensure AGL’s computing foundations are as secure and resilient as possible.
To do that AGL has defined what it calls its “red line”.
This refers to a series of standards AGL has created pertaining to architecture, security and operations.
Each application will be upgraded to meet the red line level.
It’s a lot of work – but once complete will catapult the company to the top echelon of cloud-based businesses, primed for innovation and engineered for efficiency.
Virtual Power Plant
One of the most dramatic changes to face energy companies in recent years is the rise of home-grown electricity.
The combination of solar power, better batteries to store that power and mounting environmental concerns has led to many households reducing their reliance on traditional energy retailers.
Few households go totally off grid however, and most maintain a relationship with companies like AGL – either for top-up supplies of energy or to sell excess capacity back into the grid.
At AGL it’s led to the development of the cloud based Virtual Power Plant (VPP) – one of the first examples of the sort of profound innovation that cloud architecture can help to accelerate.
According to AGL Executive General Manager Future Business & Technology, Simon Moorfield, with this proof of concept;
The AGL system is designed to pull data from a large distributed fleet of battery systems and aggregate the information into a single view of the fleet availability that can be bid into multiple markets.
In future, AGL expects to connect the VPP to a wide variety of household assets beyond battery and solar, like electric vehicles.
It’s that sort of innovation and massively scaled customer experience that AGL wants to be able to turbo charge once it’s transitioned the next 200 applications to Azure.
Ultimately, everything from CRM to billing systems, workplace productivity applications, contact centre solutions, data warehouses, data lakes and analytics will be hosted in Azure.
The same goes for AGL’s applications used to trade electricity into the national energy market which are data intensive and compute heavy – they too will be “red-lined” and transitioned to Azure.
Cloud has already underpinned AGL’s $300 million Customer Experience Transformation and its $165 million People, Processes and Performance Transformation.
Moorfield says that the first tranche of transition to the cloud means AGL is delivering improvements to customer experience 20 times more frequently than it did three years ago, and has been able to reduce testing cycles tenfold.
While AGL has taken a proactive stance on cloud and the overwhelming majority of its applications will undergo the red line transformation and transition to Azure, some AGL systems will never move to the cloud.
Instead AGL will maintain a security air gap between its Azure-based applications and operations systems running on dedicated computer networks in its power plants.
These applications also benefit from being located close to the physical plant to minimise latency.
It’s a perfect example of edge computing in action.
But Moorfield says that once all the other applications are transitioned to Azure not only will AGL have a greatly improved security posture – it will be primed for rapid innovation and ongoing digital transformation.
Getting the digital foundations right is critical, says Moorfield – and cloud makes that much easier.
“Microsoft invests billions of dollars securing Azure – we could never invest the amount that Microsoft does in protecting our data. Being in energy we have to do that for our Australian customers – but any large institution with customer information should be protecting that to the best of their ability,” he adds.
Boosting security has been one of the pinnacle priorities guiding the move to the cloud, says Moorfield – but other benefits follow in its wake.
“If we use cloud to solve that security problem, we get all the other benefits – the speed, responsiveness, elasticity and innovation through the PaaS services with Microsoft and Azure.”
That, he adds, is “the cream on top.”
Once all its 200+ applications are brought up to red line status and transitioned to Azure Moorfield believes; “AGL as a technology group will probably be one of the most advanced in the operation of public cloud and maximising the value of that for the organisation.
He says, as well as catalysing a new generation of customer services and experiences.
And if any further proof of cloud’s potential was required, it emerged during the COVID-19 crisis, when AGL’s adoption of Microsoft 365 as its productivity platform meant it was able to instantly pivot to a work-at-home model for more than 4,000 employees.
Centre of Excellence
To accelerate its digital transformation, AGL has signed a long-term partnership with Microsoft to use Azure as its primary cloud and to collaborate on ongoing innovation.
Owen Rapose is program director of the cloud transformation – known internally as Project Bullwinkle.
“We were one of the first companies to go into Azure when Azure landed in Australia. But this new agreement is really going to help deepen our partnership,” he says.
AGL believes that working with Microsoft will deliver early innovation insights and help build a competitive edge for AGL.
Shaun Code is General Manager Enterprise Technology at AGL and acknowledges that when the company first began its journey to the cloud, it was characterised simply as an exit from its own data centres.
That’s now matured; “It’s actually now cloud transformation. It’s about setting up a cloud capability for AGL moving forward. A cloud Centre of Excellence, an automation capability.“
Microsoft is helping AGL build its Centre of Excellence and amplifying its internal skills by providing specialised training.
Rapose is clear that; ”We want to be able to co-innovate. We want to be able to look at some of the challenges we have in AGL – business problems and across the industry – and work with Microsoft to provide solutions. I think that’s where we get true partnership.”
Code says there are enormous opportunities to innovate; “In the Virtual Power Plant space, in the battery technology space, and supporting people to be more efficient and to be to be rewarded for their participation in the national energy market. All those things require a lot of flexibility and elasticity in how we platform the IT that runs under these solutions.”
AGL is also investigating opportunities for digital twinning, where it creates a virtual representation of physical assets allowing even more sophisticated modelling and management.
It’s the next phase of AGL’s transformation, weaving together a secure, resilient and richly featured computing fabric based in the cloud that will allow it to respond rapidly and effectively to shifting market conditions, setting it up for sustained success.