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Australia’s AGL to move most systems to Azure cloud

Energy supplier is moving more than 200 applications and most systems to Azure in a three-year deal with Microsoft

Australian energy supplier AGL has inked a three-year deal with Microsoft to use the Azure cloud service as the primary platform for its computing needs by 2022, in a major win for the number two cloud supplier.

More than 200 applications and most systems will be migrated to Azure, according to Simon Moorfield, executive general manager for future business and technology at AGL, which will also work with Microsoft to build a centre of excellence.

The centre will focus on harnessing data and leading-edge technologies including artificial intelligence (AI) to boost efficiency and create new customer experiences. Specifically, AGL will use Microsoft’s data and AI services for its virtual power plant, an initiative that enables residential customers to make their solar battery systems available to AGL at times when the energy system needs it.

Moorfield said the agreement with Microsoft was consistent with AGL’s aspiration to use a trusted public cloud for all its applications – except those that cannot be hosted there for security or technical reasons, such as some systems used in power stations.

“This would make AGL the largest energy company and one of the first ASX50 companies with almost all technology applications in the public cloud, including all of those used at its corporate sites, such as offices,” he said.

“Already, we have nearly 50% of our applications in the Azure cloud, which includes systems that support our human resources functions, such as payroll, leave, performance reviews and professional development.

“We expect to complete moving our technology from corporate datacentres in Sydney and Melbourne to Azure within two years under our cloud transformation programme.”

Under its cloud transformation programme, AGL hopes to increase the speed at which innovative services are delivered to customers, harness the internet of things and advanced analytics, and enable better ways of working through automation, among other goals. 

Moorfield said moving to the cloud had already enabled more than 4,000 AGL staff to work from home amid the Covid-19 pandemic by leveraging Microsoft Teams and securely accessing corporate systems remotely.

“More broadly, it underpinned our A$300m Customer Experience Transformation and our A$165m People, Processes and Performance Transformation (PT3) projects,” he said.

“These programmes have allowed us to drive efficiencies, develop more products and improve customer offers, as well as upgrade our enterprise systems and processes and improve our technology performance.”

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Steven Worrall, managing director of Microsoft Australia, praised AGL for being a global trailblazer in digital transformation in the utilities sector.

“This partnership will see us continue working together and leveraging the growing array of advanced Azure platform capabilities that will underpin new generation services and customer experiences, setting the pace in the global energy sector and helping to rein in environmental impacts of energy production and use,” he said.

“Many of the world’s leading companies run their businesses on Azure and Microsoft is delighted to be working closely with AGL as it continues to transform and innovate, delivering exceptional customer experiences, driving efficiency and supporting an engaged and safe modern workplace.”

Naran McClung, an experienced Microsoft specialist who leads Macquarie Cloud Services’ Azure practice, said the high uptake of Microsoft’s Office 365 has been an influential factor for driving Azure adoption among enterprise customers.

And for many of them, multi-cloud is “less about Azure coupled with Amazon Web Services and Google Cloud, and more about Azure, hybrid and a range of SaaS [software-as-a-service] providers and with a common identity play”, said McClung.

Australia’s cloud infrastructure market continues to boom, with spending expected to reach around A$1.2bn by 2022, according to research by technology analyst firm Telsyte. About eight in 10 organisations have a strategic approach to cloud computing, while just one in four have mature practices to move workloads from on-premise to cloud.

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