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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "SCIENTECH IssueAlert" <IssueAlert@scientech.com< X-To: X-cc: X-bcc: X-Folder: \Mark_Haedicke_Jun2001\Notes Folders\Notes inbox X-Origin: Haedicke-M X-FileName: mhaedic.nsf Today's IssueAlert Sponsors: [IMAGE] EXPERIENCE THE PEACE SOFTWARE DIFFERENCE. DISCOVER THE POWER OF SUCCESS. Peace Software customers are experiencing real, measurable results using Peace's advanced customer and commodity suite, EnergyTM. Discover what the world's leading energy providers already know. Leading energy providers prefer Peace Software. Find out why...at CIS, Booth #501. www.usa.peace.com/CIS2001 [IMAGE] Vice President Cheney recently stated that to meet projected energy demands the US requires between 1,300 and 1,900 new power plants. That averages out to more than one new plant per week, every week, for 20 years running. Learn about the pivotal role of natural-gas based generation in solving the US energy crisis, attend Natural Gas and Power Generation Strategies 2001, June 13-15,Tucson, AZ. [IMAGE] The most comprehensive, up-to-date map of the North American Power System by RDI/FT Energy is now available from SCIENTECH. The Wall Map measures 42" x 72"; the Executive Map Set consists of 18 11" x 17" maps. Visit our website at www.scientech.com for a detailed description of these valuable maps and complete ordering instructions. [IMAGE] [IMAGE] May 9, 2001 Peace Software and IBM Sign Customer Management Deal with Xcel Energy By Will McNamara Director, Electric Industry Analysis [IMAGE] IssueAlerts LIVE FROM THE CIS CONFERENCE NEXT WEEK Next week I will be attending the 25th Annual CIS conference in Albuquerque, N.M. On Wednesday, Thursday and Friday, I will be writing SCIENTECH's daily IssueAlert directly from the floor of the conference, providing you with the latest news and analysis about emerging technologies in the energy industry. Key issues to be addressed at the conference include CIS / CRM activities, billing strategies and billing software, meter reading, the application service provider (ASP) model, and a technology forecast for the industry. Each day at the conference I will select the most important issue of the day and provide you with the independent analysis that you've come to expect from IssueAlert. So even if you can't attend the conference, you can still participate in the dialogue and information exchange. --Will McNamara Peace Software announced that it will join with IBM Global Services to deliver large-scale and advanced technology solutions to utility and retail energy companies operating in regulated and deregulated markets. Using "state-of-the-art and proven approaches," IBM Global Services and Peace Software will plan, develop, test, and deliver customer-specific implementations of Peace's Energy suite. Services will span the life cycle of an installation from rapid deployment through production site enhancement and maintenance. Peace and IBM have secured a contract to provide full customer management services for Xcel Energy, which expands upon a strategic alliance that has already existed between the utility and IBM. Analysis: Both Peace Software and IBM have been aggressively pursuing the same customer management space for some time. The fact that the two companies have now come together to combine their unique skill sets establishes a strong competitive force in this fast-growing arena, which can include outsourced billing, meter reading, data collection, customer care, CRM, and CIS systems. IBM Global Services, as an information technology services provider, brings an operational and management capability for back-office requirements. In turn, Peace Software provides a unique suite of billing and customer data software that many utilities are purchasing as they move from legacy systems to more flexible solutions. As noted, Peace Software and IBM Global Services immediately followed the announcement of their partnership with a new multi-million, five-year contract with Minneapolis, Minn.-based Xcel Energy. Under the contract, the two companies will implement Peace's Energy suite to support Xcel's 3.5 million regulated and deregulated electricity and gas customers located in 11 Western and Midwestern states. In addition, the Peace suite will be used to support Xcel Energy's participation in Texas' deregulation pilot program, which begins in June. The project will replace Xcel Energy's mainframe and client / server legacy system. The implementation plan for Xcel Energy includes all customer management, commodity billing and Internet components that are offered in the Peace Energy software. The contract with Xcel expands upon an already-established alliance between IBM and the utility that dates back to 1995 (IBM originally contracted with Public Service Co. of Colorado, an early predecessor to Xcel Energy). Under the $400 million, 11-year alliance, IBM has provided data-center operations and disaster recovery for Xcel Energy, including networking, help desk, PC and LAN support, distributed services support, and application development and maintenance services. Through the agreement, Xcel Energy awarded IBM "preferred provider status," making IBM the vendor of choice for any IT products and services that the utility may need. In this next phase of the partnership with Xcel, IBM appears to be moving the focus on a mainframe and client-server system to a packaged product for Peace Software. This is a major step for Xcel, as many utilities still retain internal control over their own applications and are reticent to outsource these functions to an outside company. In addition, this is a huge deal for Peace and IBM as they may be planning to eventually extend the platform beyond the partnership with Xcel. In fact, Xcel Energy is just the latest in a growing list of competitive utilities and energy companies that have outsourced or replaced their billing / customer care needs. In competitive markets, a prerequisite for the continued growth of an energy company or utility is a comprehensive billing software system that can handle the complexities of an unbundled environment, which is where the value of Peace Software comes in. Most competitive retail providers realize that they must be able to provide customers with online energy usage and billing data on a 24/7 basis. Further, as competitive energy providers operate in different states, it is important that they eliminate the different automated and manual processes that are common in legacy systems. This can result in a real cost savings for an energy company as it can eliminate back-office functions such as taking calls for final reads and address changes, all of which can be handled directly by the customer through online software. An energy company basically has two options with regard to billing / customer care solutions. The first option is for the energy company to purchase the billing software directly from a software provider such as Peace and manage its own billing needs. The second option is to completely outsource the entire billing / customer care services to a company such as IBM Global Services. By joining forces, Peace Software and IBM are anticipating that energy companies will be inclined to not only select the Peace software, but also opt to use IBM Global Services' implementation and management services. Peace's Energy software, which reportedly is being rapidly deployed in 20 transitioning energy markets around the world, is designed to provide several self-serve features, including customer enrollment, summary billing, more flexible due dates and electronic payment options. The Energy suite was developed for retail energy companies and is capable of handling many functions required by retailers, from enrollment and registration to billing to settlement and load forecasting. The last two features are particularly noteworthy as, up to this point, they have been rarely found in billing software. Many systems in the United States today are building this competency or are "bolting on" the technology; Peace already offers it in an integrated tool. Peace's Energy Version 6 software, which was released in December 2000, is billed as the first e-business solution to integrate customer and commodity management. The upgraded features of Energy Version 6 include B2C e-commerce functions, an advanced third-generation browser user interface (BUI), enhanced billing capabilities and expanded industry-standard support for the Oracle 8i database system. The result of these technical improvements, according to Peace, is a "capability to exploit the latest Web browser technologies to support and streamline large scale, mission-critical customer service operations." Further, the Energy software is centered around the UNIX operating system and thus can be moved and upgraded from one hardware platform to another. The Energy software can accommodate billing services around natural gas, electricity, water, home security, and home mortgaging. The end result is that an energy service provider can group all of its services into one bill stating one cost, which is a market edge against competitors that only provide multiple billing. On its own, Peace Software has become a dominant player in the energy billing software market, offering its "one-stop-shop" billing tool to a variety of utilities and energy companies. Peace boasts customers such as AEP, MidAmerican Energy, Enron, BC Gas, Dominion Retail, Nordic Electric, Exelon Energy, and Pepco Services. Peace has also entered the Canadian gas market by implementing its Energy suite at BC Gas, headquartered in Vancouver. The company is based in Miami and maintains a large presence in its country of origin, New Zealand, the first country to deregulate its electric utility market. The company has used strategic partnerships as one method of growing its business. Prior to this partnership with IBM Global Services, Peace Software announced in early April an alliance with Exolink, a provider of retail energy business process integration services. Under this partnership, Peace and Exolink are marketing a platform for energy retailers in both regulated and unregulated markets in which customer data can be shared in and out of multiple markets. Peace also just signed a contract with Delinea, a vertical services provider, in which Delinea has licensed Peace's Energy software as a customer management application targeted at mid-sized utilities. However, the billing / customer care market is arguably one of the most competitive businesses to have emerged from electric deregulation. Consequently, the list of competitors that Peace Software and IBM Global Services face grows literally every month. I cannot list all of the competitors here, but a few are worth mentioning as they have grown at a similar pace to Peace and IBM. Such competitors include Alliance Data Systems (ADS), ConneXt, Enlogix, Excelergy, Itron's MV-PBS, LODESTAR, Orcom Solutions, SCT Banner, SPL Worldgroup, and US Power Solutions. Some of these companies offer just the software solution, which is licensed to utilities or energy companies, while others serve as the outsourced management company that implements the software package. The partnership between Peace Software and IBM Global Services runs parallel to similar partnerships between ADS / Excelergy and Enlogix / SCT software. Currently, SCIENTECH is witnessing a trend away from large license-only agreements and into Strategic Sourcing agreements. In the customer care field today, Enlogix is the largest application service provider with over 3 million end customers in production today. Orcom is the second largest, with over 1 million "live" customers. Realistically, it will be about two years before Peace and IBM are able to fully migrate all of Xcel's 3.5 million customers to the Peace software. However, if this transition materializes, it could represent the largest outsourced customer care contract to date. An archive list of previous IssueAlerts is available at www.scientech.com Reach thousands of utility analysts and decision makers every day. Your company can schedule a sponsorship of IssueAlert by contacting Nancy Spring via e-mail or calling (505)244-7613. Advertising opportunities are also available on our website. SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let us know if we can help you with in-depth analyses or any other SCIENTECH information products. If you would like to refer a colleague to receive our free, daily IssueAlerts, please reply to this email and include their full name and email address or register directly on our site. If you no longer wish to receive this daily email, send a message to IssueAlert, and include the word "delete" in the subject line. SCIENTECH's IssueAlerts(SM) are compiled based on the independent analysis of SCIENTECH consultants. The opinions expressed in SCIENTECH's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. SCIENTECH's sole purpose in publishing its IssueAlerts is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. Copyright 2001. SCIENTECH, Inc. All rights reserved.
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