In today's highly competitive but relatively mild demand
customer information system market there is a divergence
taking place. Some CIS vendors are considering the product-focused
world of commercial-off-the-shelf, or COTS, development,
while other CIS vendors are gravitating back to a software
services business model—generating revenue as much
from professional services, consulting and maintenance contracts
as from new license sales. This is particularly true at
the top end of the market where—at least for the moment—fewer
large investor-owned utilities are opting to undertake wholesale
CIS replacement projects.
Evidence of the suitability of true COTS products for today's
utility market is growing. The recent announcement of Peace
Software's implementation at Xcel Energy for 1.5 million
electricity and 1.2 million gas customers in six U.S. states
by project manager and system integrator IBM Global Services,
is substantive validation and proof for the often repeated
assertion that utilities require both extremely robust,
flexible and extensible products, and best-of-breed installation
and integration.
COTS products are being entertained because they provide
utilities with a variety of advantages over in-house developed
products. For example, though in-house development is a
product-based software design approach, it does not typically
create a critical momentum for increased development capacity
that translates into IT system business agility and responsiveness.
Additionally, utilities that have relied on in-house development
of CIS systems have often been able to solve immediate and
short-term business or business process needs, but have
not been effective in supporting the business in optimizing
business processes or preparing the business to meet future
challenges.
The buyer should beware, however, as not all CIS products
or COTS products are created equal. A true COTS product
and true product company is differentiated between independent
software vendors and custom software developers by the key
judgment that:
a vendor delivers a packaged product
product companies have scale in the numbers of people and
resources dedicated to making core product
the product is delivered in frequent releases
true software product companies must exist to bring new
product to market—rather than providing solutions
including integration consulting or other software services.
The astute utility will also recognize that a key differentiator
of a true product company is whether it has a track record
of having clients running on the same version of a product
and working specifically not just to develop new product
versions, but to migrate clients to new version platforms
over time.
UtiliPoint International research and analysis of the CIS
market shows that there has been an evolutionary path of
CIS product development, from in-house system, to custom-developed
system, to true packaged product. While it is difficult
to predict exactly where the future of the CIS market lies,
UtiliPoint believes that robust productization of CIS functionality
is part of that future. In fact, it is possible that well
down the road, there may be no such thing as a CIS but rather
a set of technology and business process functionalities
that enable the user to assemble both the information and
the format for any given particular task. UtiliPoint, hence,
sees that strong productization and extensibility are going
to be the lasting hallmarks of CIS software development.
Peace Software has always been a unique company, and in
today's environment Peace's unique and arguably contrarian
marketplace stance is challenging the established thinking
in terms of software development. The company is solely
focused on extending and enhancing its packaged CIS product—and
causing others including top utilities like Xcel to take
notice.
