we know
they know
Bluewater Power prepares for smart metering
with SAP and IBM solutions
 The Challenge
Bluewater Power faced three
significant business challenges:
new regulations in the energy
sector, stricter financial reporting
standards, and a mandate to
implement smart meters for
electrical power. Legislative
changes would impact the finance
department with totally new
reporting standards, and would
affect the meter, meter reading and
customer service departments.
Roles would be created and
eliminated in other departments,
and in combination these changes
would produce wholesale
change in the way the business
operates. Additionally, limited peak
generation capabilities that dictated
existing power capacity would
have to be used more intelligently.
Existing business systems at
Bluewater were unable to cope with
the scale and pace of change.
 The Solution
The company implemented a
suite of SAP ERP applications,
including SAP Customer
Overview
Relationship Management, SAP
BusinessObjects, SAP NetWeaver
and SAP Utility Customer
e-Services (UCES), on IBM
System x3650 M2 servers with
Intel® Xeon Processor 5500 series
processors, using VMware ESX
Enterprise virtualization. Bluewater
Power also deployed IBM XIV
Storage Systems for data storage
and management, with IBM Tivoli
Storage Manager to handle backup,
archive and retrieval services.
 The Benefits
Bluewater Power gains a highly
resilient, flexible information
infrastructure that aptly addresses
current and changing power
distribution challenges. Smart
meters send detailed hourly interval
data for analysis by Bluewater,
which packages customers’
hour-by-hour power consumption
into bucketed time of use bills. In
turn, new automatic variation of
time-of-use pricing is intended to
create a culture of conservation
and help re-shape customer
behavior and usage patterns to
buy power more cheaply, and allow
existing generation capacity to be
used more effectively and more
efficiently, thereby reducing the CO2
footprint. Along the way, Bluewater
Power reduced storage provisioning
and management time by 60 to 70
percent, cut physical rack space
demand by 50 percent, and avoided
hiring one additional IT full-time
employee.
 Key Solution Components
Industry: Energy
Applications: SAP® ERP 6.0,
SAP Customer Relationship
Management, SAP NetWeaver,
SAP BusinessObjects
Hardware: IBM ® System x3650 M2
servers, IBM XIV® Storage System
with Intel® Xeon® Processors
Software: VMware® ESX™, IBM
Tivoli Storage Manager
“The improved
automation and
reliability helped
Bluewater avoid hiring
one additional IT
full-time employee.
By reducing storage
provisioning and
management time by
60 to 70 percent, it
enabled us to grow our
technology services.”
Keith Broad, Director, Information
Technology, Bluewater Power
Bluewater Power, based in Sarnia,
Ontario, Canada, is a medium-sized
utility company, which provides
water and electricity to commercial,
industrial, and residential consumers
in Southwestern Ontario. Created
from a merger of several public
electricity distribution companies
in 2000, Bluewater employs around
100 people, serving some 35,000
customers in total.
Bluewater faces three immediate
business challenges: the mandated
introduction of smart metering in
Ontario, regulatory changes, and
new financial reporting requirements
such as Canadian General Accepted
Accounting Policies and International
Financial Reporting Standards.
Keith Broad, Director, Information
Technology, explains: “In reality, we
looked at our systems and realized we
could not meet any of those needs. We
needed a solution that could adapt to
rapidly changing business conditions
such as smart metering and provide
more flexible reporting capabilities,
both for regulatory and financial
reasons.
“Our assessment was that a
combination of SAP ERP applications
for general business management
and SAP Customer Relationship
Management would be the first
step, and looking over the horizon
we wanted to introduce a business
intelligence strategy.
“This prompted a review of our
datacenter – did we have the right
infrastructure and was it capable of
meeting our needs? Ultimately this led
to a decision for an integrated suite of
SAP software, IBM System x servers
and an IBM XIV Storage System. In
combination, the SAP applications
and IBM infrastructure gives us the
capacity, flexibility and scalability
needed to meet the three enormous
challenges facing the business.”
Adapting to change
Smart metering represents the single
largest change to power distribution
in Ontario. Smart meters allow
consumption charges to be varied
according to the time of use (TOU), in
hourly increments. Mandated by the
Ontario Government, smart meters
are due to be installed in all consumer
premises by the end of 2010, and time
of use billing must go live by summer
2011.
The project involves the creation of
the Automated Metering Infrastructure
(AMI), a framework that will connect
millions of Ontario consumers to
utility companies in a standardized
fashion. The AMI will store collected
hourly interval data in a single central
Meter Data Management repository.
Accessing this repository data will
allow Bluewater Power to deliver
monthly itemized time of use (TOU)
invoices to consumers.
For Bluewater, the data generated
by smart metering represents both
a challenge and an opportunity
– huge increases in volumes and
transactions, combined with greater
insight into customer behavior.
Ultimately, with differential pricing
varying according to demand,
Bluewater expects consumers to alter
their energy consumption patterns, as
higher rates charged at peak times will
tend to shift demand to other lower-
priced times of the day, when more
capacity is available.
Bluewater’s opportunity is to use
the AMI and Smart Grid networks to
develop better service offerings to its
customers, and to optimize business
processes, enabled by recording and
analyzing the new stream of data.
“We reviewed existing systems
and concluded that while we
could probably add the necessary
functionality through customization,
our long-term strategy will be to
standardize on SAP for Utilities
and SAP Customer Relationship
Management. The end result is a move
from a fairly small SAP application
footprint to a landscape including
SAP ERP applications for business
management, SAP Customer
Relationship Management based
on the SAP NetWeaver foundation
to handle all this new data, and
SAP BusinessObjects to help us
understand and analyze it.”
Bluewater takes the view that SAP
Customer Relationship Management
(CRM) is easier to use than legacy “The Intel Xeon
applications, and will offer greater
Processor 5500 series
interactive functionality. For example,
the critical ‘move-in move-out’
makes light work of
process when consumers change what could otherwise
their residence can be programmed be a significant SAP
to ensure continuity of service for application workload.
customers and to help reduce loss
We use fewer processors
of business during the change.
New customer sales and sign-up
to complete the same
processes can be linked directly to throughput, helping
payments and, in the near future, the to reduce our IT
smart metering infrastructure. infrastructure costs,
physical footprint and
“The aim was to introduce
infrastructure and applications that
energy consumption.”
allow us to be more efficient, with
Keith Broad, Director, Information
greater ease of access to information Technology, Bluewater Power
and better ability to extract information
on customers.”
Building the infrastructure
With the SAP strategy in place,
Bluewater turned to consider
infrastructure implementation.
“Bluewater has been an IBM
datacenter customer for a number
of years. IBM has enhanced our IT
department’s abilities with strong
support, based on very good
relationships with a strong roadmap
and strategy,” says Keith Broad.
Bluewater selected one IBM TECHNICAL LANDSCAPE
System x3350 and four IBM System Servers: Four IBM System x3650 M2
x3650 M2 servers with Intel® Xeon servers with quad-core Intel Xeon
processors, running VMware ESX to Processor X5550 series processors,
provide virtualized environments for one IBM System x3350 server with
the SAP applications. Each VMware dual-core Intel Xeon Processor E3120
virtual server can be allocated series processors, IBM XIV Storage
processor, memory and network System
resources to suit the precise workload, Software: IBM Tivoli Storage Manager,
ensuring consistent performance SAP ERP, SAP CRM, SAP NetWeaver,
and service delivery. The Intel Xeon VMware ESX™
Processor 5500 series, with new Intel Users: 75 total users
Microarchitecture Nehalem, provides
a foundation for Bluewater to achieve
greater performance while reducing
physical rack space demand by 50
percent when using SAP software –
thus cutting operating costs.
This IBM System x server technology
features intelligent management
that automatically optimizes
performance to fit business and
application requirements; automated
energy efficiency that scales energy
usage to the workload to achieve
optimal performance/watt and
reduce operating costs; and flexible
virtualization, that offers best-in-class
performance and manageability in
“IBM XIV gives Bluewater, with our
somewhat slim IT department, the
capacity for very large workload,”
says Keith Broad. “The self-
managing features of the XIV allow
us to deliver consistently strong SAP
performance, with the IT team free
to focus on supporting the business
development issues. Combined with
VMware virtualization, the storage
and processor infrastructure provides
a solid foundation for a very flexible
data and application workload.
“The XIV technology has what I would
describe as the ‘IBM engine’ behind
it. We looked at other similar storage
“The XIV Storage
System offers greater
total capacity at
significantly lower
overhead, which in our
view represents typical
excellence from IBM.
SAP BusinessObjects
and XIV give us a very
flexible foundation,
helping us to deal with
the future’s unknowns.”
Keith Broad, Director, Information
Technology, Bluewater Power

virtualized environments. systems, but these did not have the

“We chose the virtualization route
as we realized this makes sense
for SAP applications in terms of
workload flexibility. Additionally, we
are able to create virtual servers and
SAP instances as test areas much
more quickly than provisioning a
new physical server, giving us a very
efficient way to take the business
forward, particularly where we do not
yet know how the workload will evolve,”
remarks Keith Broad.
“The sheer performance combined
with the virtualization technologies
enabled by the Intel Xeon Processor
5500 series makes light work of what
could otherwise be a significant SAP
application workload. We use fewer
processors to complete the same
throughput, helping to reduce our IT
infrastructure costs, physical footprint
and energy consumption.”
To store the flood of data, Bluewater
selected the IBM XIV Storage System
as a virtualized, cost-efficient and low-
administration solution.
technical and in-depth backing of
IBM. The XIV offering definitely meets
our needs today as well as providing
opportunities for growth tomorrow.”
The IBM XIV Storage System is a
groundbreaking, high-end, open
disk system designed to support
business requirements for a highly
available information infrastructure.
XIV removes much of the manual
administrative workload through
its advanced, automated services
and easy management, giving IT
professionals the freedom to focus
more of their time on strategic
activities, such as extracting
value from data and supporting
requirements.
Bluewater has deployed IBM Tivoli
Storage Manager to automate
many of its business-as-usual data
management tasks, such as backup,
archive and retrieval services.
With the advent of the individual
consumers’ time of use (TOU) data
and the analysis potential it offers,
Tivoli offers the ability to reduce the
manual workload by introducing a very
high degree of reliable automation to
storage management, both cutting
costs and improving overall resilience.
“The improved automation and
reliability helped Bluewater avoid
hiring one additional IT full-time
employee. By reducing storage
provisioning and management time by
60 to 70 percent, it enabled us to grow
our technology services associated
with these business changes through
utilizing already available and trained
staff,” says Keith Broad.
Moving to SAP applications
Building on the IBM infrastructure,
Bluewater chose to migrate to the new
SAP ERP applications first, starting
with the general ledger component,
followed by functional changes and
tuning. In the process, Bluewater
elected to take advantage of the
implementation to standardize on the
Unicode character set.
“We did not have to introduce
Unicode, and the consequence was
clearly increased database table
sizes,” says Keith Broad. “However, we
believe that Unicode will soon be the
standard for enterprise applications
– and if this turns out to be the case,
avoiding Unicode now would only be
delaying the inevitable transition. It
could also potentially carry some risk
to data in future migrations.”
With the migration to the new SAP
applications on the IBM x3650 M2
and XIV Storage System platforms
completed, Bluewater started
addressing both the current regulatory
and financial challenges, and
preparing itself for the smart metering
project.
“Because we are in a highly evolving, “Linked with SAP CRM,
regulated sector, we are often being
we will be able to
asked to produce information that
has never before been requested.
manage connections,
The traditional method of creating usage and billing more
ABAP reports is somewhat rigid, efficiently, handling
with limited ability for users to a larger number of
modify the report parameters.
customers within the
Regulatory changes that require new
information also require extensive
same administrative
ABAP modifications that have no overhead.”
future value. And because Bluewater
Keith Broad, Director, Information
outsourced its report generation Technology, Bluewater Power
to a third-party vendor, these
modifications incur a direct dollar
cost.
“The SAP BusinessObjects solution
removes this wasted cost, by
allowing us to generate reports
and analysis without the need for
extensive custom programming. Of
course, this can easily lead to vastly
increased demand for storage –
and the introduction of Unicode is
expected to increase data volumes
by 50 percent; the XIV solution helps
us contain these costs while allowing
us to benefit from the flexibility that
SAP BusinessObjects offers.
“The XIV Storage System offers
greater total capacity at significantly
lower overhead, which in our view
represents typical excellence from
IBM,” comments Keith Broad. “SAP
BusinessObjects and XIV give us a
very flexible foundation, helping us to
deal with the future’s unknowns.”
Looking to the future
In the long term, smart metering
should help to reduce peak-time
demand for electricity – which should
mean that even as total energy
consumption rises, there will be little
need to add new generation capacity
in Ontario. Avoiding expansion will
help to meet one of the Province’s key
environmental targets.
“For Bluewater Power, we see a real
shift in our ability to understand what
is happening with our distribution
network, through what we call the
‘smart grid.’ With real-time smart
meter data we will be able to use SAP
applications to make sense of what is
happening to power demand, and this
could fundamentally change the way
we do business,” says Keith Broad.
“With conventional meters, we
have to send out field technicians
to handle every disconnection and
reconnection, whereas with smart
meters, we will be able to handle this
remotely, greener and faster. Linked
with SAP CRM, we will be able to
manage connections, usage and
billing more efficiently, handling a
larger number of customers within the
same administrative overhead.
“Drilling right down to the consumer
level, we should even be able to find
out when people are stealing power
by meter tampering, as their usage
pattern will likely be different. We will
be able to process vast amounts of
information rapidly using the VMware
ESX and x3650 M2 server foundation,
store and analyze data with the XIV,
SAP NetWeaver and SAP CRM
combination, and improve and create
new customer services.”
Data captured from the smart meters
can be analyzed at high speed on
the Intel processor-based x3650 M2
servers to help Bluewater develop new
packages to meet customers’ hour-by-
hour power consumption. These new
pricing policies will direct consumers
“The SAP, VMware and
Intel processor-based
solutions from IBM
is helping Bluewater
to become a more
streamlined business,
and contributes to the
Ontario smart metering
and environmental
objectives in ways that
were simply not possible
before.”
Keith Broad, Director, Information
Technology, Bluewater Power
to re-shape their usage away from
the peaks, resulting in smoother,
somewhat more continuous demand,
to allow existing generation capacity
to be used more effectively and more
efficiently, contributing directly to
helping control global CO2 emissions.
Keith Broad concludes: “In short, the
SAP, VMware and Intel processor-
based solutions from IBM is helping
Bluewater to become a more
streamlined business, and contributes
to the Ontario smart metering and
environmental objectives in ways that
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were simply not possible before.”
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