NuStar Energy

Company Benefits from Licensing Agreement as It Rebrands and Expands Operations

NuStar Energy began operations in 2007 in San Antonio, Texas, after separating from parent company Valero Energy. Management was under pressure to rebrand operations while ensuring that customers experience continuous service. NuStar had to choose technology that would provide immediate operational efficiency and support long-term corporate goals. NuStar Energy also needed a licensing strategy that would deliver initial cost savings and long-term benefits. To achieve these goals, NuStar Energy acquired an integrated Microsoft® solution through a Microsoft Enterprise Agreement that covers the latest Microsoft desktop software and server products, as well as ongoing maintenance benefits. NuStar Energy’s IT infrastructure was operational in less than six months and now has the communication, collaboration, and IT management capabilities it needs to support a growing global organization.

 

Situation

On April 16, 2007, NuStar Energy moved into its new 84,000 square foot corporate campus in San Antonio, Texas. This was the final step in its rebranding and restructuring efforts following a split from parent company Valero Energy in February 2007. NuStar Energy is in the business of petroleum wholesale distribution and manages short- and long-term oil storage and transportation for its customers. It owns 9,063 miles of pipeline, 85 terminal facilities, four crude-oil storage tank facilities, and two asphalt refineries with a combined throughput capacity of 104,000 barrels per day.  NuStar has the second largest independent liquids terminal operation in the United States. It is a leader in operational excellence, safety performance, environmental stewardship, and community service. NuStar’s 2,200 employees are individuals who care equally about their company, co-workers and communities.

A key milestone in NuStar Energy’s short history occurred with the acquisition of CITGO Asphalt Refining Company’s asphalt (CARCO) operations and assets for U.S.$450 million in March 2008. NuStar Energy now has the capacity to produce and market over 36 million barrels of asphalt and light products, making the company one of the largest asphalt refiners and marketers in the United States. NuStar has offices and operations in the Netherlands Antilles, Canada, Mexico, the Netherlands, and the United Kingdom.

Acquiring a suite of Microsoft technologies through a comprehensive licensing agreement made this the smoothest corporate transition of my career…. We were operational in less than six months. Robert Amos Manager, Infrastructure Systems, NuStar Energy

There are significant challenges to breaking away from a parent company and creating a new corporate identity. Entrenched business systems and an established corporate culture have to be re-created so they will work in a new operational environment. New priorities for IT systems and employees have to be defined so they match with corporate goals.

For Robert Amos, Manager, Infrastructure Systems, at NuStar Energy, these challenges were familiar. He’s a veteran of four corporate separations, so he knew the first, most important decision for NuStar Energy management was choosing a technology stack that would support the company’s goals and its culture. The next step for management was finding the most cost-effective approach to acquiring those technologies. NuStar Energy began with servers and desktop technologies inherited from Valero Energy and the company retained global offices that existed in its previous incarnation. However, it remained for NuStar’s management to define new corporate strategies and determine what new technologies they needed to acquire to achieve those goals.

“We were under a great deal of pressure to re-establish operations as quickly as possible,” says Amos. “Our vice president encouraged us to plan for a mobile workforce who might be accessing our network resources from head office or from any of our global regional offices. He also advised us to plan for growth; in fact, we expected to double our size in 18 months. This prediction came true almost immediately, with the acquisition of CARCO.

Challenges of Global Collaboration

In addition to the 300 people who work at headquarters at San Antonio, 1,950 employees work in globally dispersed, regional, and operational offices—a scenario that poses a variety of communication challenges. NuStar Energy management wanted the company to function smoothly as a worldwide corporate entity, and needed a standard suite of communication and collaboration technologies that would keep everyone connected through shared calendars, documents, and information. For many of the company’s information workers, a large portion of their everyday work involved project or team work, so NuStar Energy management considered different project management technologies.

And within the realm of IT management, Amos and his colleagues highlighted the need for a suite of centralized management tools that would assist in enterprise-wide deployment, management, and support of the IT software and services necessary to boost the productivity of NuStar Energy’s employees.

Requirements for an IT Infrastructure

“When we became an independent company, we wanted to make the process as simple as possible, so we tried to keep change to a minimum to meet a very short timeline,” says Amos. “However, there were a few things we knew we didn’t want to take from the old environment. Our former parent company used SAP ERP [enterprise resource planning] to manage its projects and SAP Netweaver® to build its corporate portal, and we didn’t want to have to hire specialized support staff for our project management or our company Web site. The business wanted to share information across the organization with an easy to learn environment with the ability to expand to meet future business goals.”

To simplify the startup process, NuStar wanted to standardize on a single vendor, so it became crucial to pick a partner that shared its vision and offered flexible, cost-effective licensing options. “We wanted a vendor that put a lot of effort into building technologies that work together, that are easily supported, and that are intuitive for end users,” says Amos. “I didn’t want to take the time to find people who had UNIX experience, or Oracle experience, or Lotus Notes experience, and then to have to integrate those different pieces together to build a company architecture.” 

Solution

“With pressing deadlines to install our infrastructure and resume operations under a new name, we turned to Microsoft for help,” says Amos. “We met our contacts at the Microsoft Technology Center [MTC] in Austin, Texas, for several Strategy Briefings where they helped us line up the technologies we needed to acquire and to develop a product implementation plan. We showed them what we were starting with, and talked about where we wanted the business to go, and we outlined the data flow and processes throughout the organization. They understood our goals and showed us the technologies they had to quickly turn our plans into action.”

For example, when the NuStar Energy team said it didn’t want to use SAP for the Internet site or the corporate intranet, Microsoft representatives at the MTC demonstrated Microsoft® Office SharePoint® Server 2007. NuStar Energy quickly realized that this one product offered all the portal, content management, and collaboration capabilities that it needed. Amos and his team also saw demonstrations of Microsoft Exchange Server 2007, Microsoft Systems Management Server R2, Microsoft Office Communications Server 2007, and the Windows Mobile® 5.0 operating system.

Taking Advantage of One Enterprise Agreement

NuStar Energy decided to standardize on an integrated suite of Microsoft server and desktop technologies. The company signed a three-year Microsoft Enterprise Agreement, which provides NuStar Energy with cost-effective pricing based on the 1,500 desktops the licensing agreement covers. It also includes new version rights for the software covered under the agreement, such as Office Professional Plus 2007 and Windows® XP Professional. Additionally, the Enterprise Agreement includes the Microsoft Enterprise Client Access License (CAL) Suite, which brings together 11 Microsoft products to provide NuStar with the real-time collaboration, security, communication, desktop, and server management capabilities it needed.

Taking advantage of support from the Microsoft Technology Center, we were able to migrate more than 1,200 workstations remotely in a three-week window. Robert Amos Manager, Infrastructure Systems, NuStar Energy

NuStar Energy also decided to take advantage of Microsoft Software Assurance for Volume Licensing under its Enterprise Agreement. NuStar uses Software Assurance to maximize the value of its technology investment by taking advantage of the comprehensive maintenance program that includes problem resolution support, training vouchers, software home use programs, and a free upgrade path for Microsoft software covered under the agreement. The company plans to upgrade from Windows Server® 2003 to Windows Server 2008 in January 2009.

NuStar Energy took the opportunity to add additional products to the agreement, based on projected needs over the next three years. These products include Microsoft BizTalk® Server 2006 to support electronic data interchange between NuStar and its partners and customers, Microsoft Office Project Server 2007, and Windows Mobile 5.0.

Deploying a New Domain Model

As its first priority, NuStar Energy needed to deploy its own domain and security model.  Using Windows Server 2003 and Microsoft Identity Integration Server 2003, NuStar was able to build a new domain and migrate resources while keeping user accounts synchronized between the Valero Energy and NuStar domains. This allowed NuStar Energy Information Services (IS) department to focus on the separation of resources without having to handle the daily administration of employee accounts.

The first two projects identified for implementation were to replace the SAP Net weaver portal solution and the SAP ERP project management solution. NuStar’s Microsoft contacts at the MTC had given demonstrations of Microsoft Office Project Server 2003 and the soon-to-be-released Office SharePoint Server 2007 to show how both products could be used individually to meet business requirements and how the two could be used together to provide additional functionality. Because the portal and Internet presence was required immediately, NuStar Energy IS decided to start with Office SharePoint Portal Server 2003 and then upgrade to Office SharePoint Server 2007 upon its release. The Enterprise Agreement made this decision easy because under Software Assurance no additional software costs would be incurred to move to the latest technology. Choosing to use Microsoft products allowed NuStar Energy to take advantage of in-house IS staff and local contractor resources to expedite the implementation and keep costs down.

Building a New Portal

While building the new portal solution, the business determined it needed a document repository and workflow engine to streamline new business processes. Again, Office SharePoint Server 2007 was the best solution because it offers enterprise content management, business intelligence, and search capabilities. Choosing Office SharePoint Server 2007 allowed one IS team to focus on the development of new business solutions while another team continued with the task of separation. 

The Microsoft SharePoint technology also minimized the cost and risk of not being able to merge the Office SharePoint Portal Server 2003 intranet into the document management system. As soon as Office SharePoint Server 2007 was released, the project team began the process of implementing a document management and approval system to be completed in five months.  This solution currently supports several areas of the business for document management and contains over 9,000 workflows.

During the 4th quarter of 2006, and into early 2007, business resources such as file and print servers were built or migrated from Valero Energy to the NuStar Energy domain. When applications and business critical data was identified, NuStar Energy IS staff migrated and secured the information on newly created application and Microsoft SQL Server® 2005 servers.  Each time a new separation requirement was discovered, Amos turned to Microsoft for a possible solution.

Shortly after the move into NuStar Energy’s new corporate offices, it was time for the final migration from Valero Energy’s domain. The final step: migrate all the workstations and users to the NuStar Energy domain.  This was accomplished by using Microsoft domain migration tools. “Using these tools and taking advantage of the support team from the Microsoft Technology Center, we were able to migrate more than 1,200 workstations remotely in a three-week window,” says Amos. “This process allowed the IS department to repackage the new desktop image and application packages to be rolled out later in 2007 while minimizing the impact to the business.” 

Benefits

NuStar Energy engineered a smooth transition to a new operational company thanks to its decision to standardize on Microsoft technologies acquired through an Enterprise Agreement. “It was imperative that we reduced inconvenience to our existing customers as we built up a new, rebranded enterprise operation,” says Amos. “Acquiring a suite of Microsoft technologies through a comprehensive licensing agreement made this the smoothest corporate transition of my career. We were able to expedite the rollout of our new IT infrastructure by working closely with our Microsoft contacts to obtain the products quickly. We were operational in less than six months.”

Improving Ability to Meet Business Challenges

A major acquisition is challenging for any corporation, but when it occurs within the first year of operations it has more potential to disrupt barely established business processes. However, NuStar Energy’s relationship with Microsoft, and particularly the advantages offered through the Enterprise Agreement, helped smooth over the acquisition process, minimizing interruptions to daily business.

“Our acquisition of CARCO confirmed two major benefits of selecting Microsoft as our single vendor,” says Amos. “The first is the value of choosing standardized Microsoft technologies. CARCO also had a Microsoft-centric IT infrastructure, so this significantly reduced the complexity of our acquisition. We worked with our Microsoft support team using benefit hours from Enterprise Agreement to map out how we could integrate their environment into ours to reduce downtime. The second benefit is ease of transferring licensed applications onto our existing agreement and the ability to add new licenses or upgrade as necessary while capturing the costs as part of the acquisition.”

Supporting Global Collaboration

According to Amos, an increasing emphasis on regionalization for business operations has been a major change for NuStar Energy. Regional offices control facilities, such as pipelines, terminals, and storage facilities, in their regions; and these operations are governed according to local regulations. NuStar wanted to support regional management for the most efficient responses to local conditions. Microsoft technology helps the company provide its regional offices with the tools to manage operations locally while staying connected with the head office. Regional offices are setting up their own intranet sites using Office SharePoint Server 2007, and managers and employees are finding the software so intuitive that they are taking ownership of their own content management.

“When we started, we weren’t sure where our workforce would be or how people would be accessing network resources, so we wanted to make sure we provided an environment that allows efficient mobile access to contacts, calendars, and business information,” Amos says. “With the combination of Exchange Server 2007, the Microsoft Office Outlook® 2007 messaging and collaboration client, and Outlook Web Access, our globally dispersed mobile workers can access their inboxes and view documents from anywhere they have connection to the Internet.”

Using this technology, BlackBerry devices are being replaced with Windows-based mobile devices that are easy to deploy and support and present a familiar interface for the end user.

Enabling Central IT Support

Microsoft technologies licensed through the Enterprise Agreement are also helping NuStar Energy IT staffers to manage a globally dispersed corporate infrastructure. They are taking advantage of Microsoft System Center Operations Manager 2007 to monitor the company’s 225 servers from headquarters, and to develop baseline performance levels.

“Microsoft software management technologies are important for us to contain costs as we grow our worldwide infrastructure,” says Amos. “We will be able to minimize the amount of service staff it takes to manage our servers and desktops using consistent policies and procedures from one centralized toolset as the company continues to grow.”

Reducing Costs

NuStar Energy realized immediate costs savings by acquiring its technology through an Enterprise Agreement, as opposed to buying individual licenses for products as needed. For an organization in the midst of a major re-branding operation, the ability to stretch technology payments over three years frees up money for other launch priorities. The Enterprise Agreement provides another benefit for a new organization like NuStar Energy: the ability to deploy the latest technology as soon as it appears, or later, as time and money allow.

“Even though Microsoft Office 2007 had been released, we weren’t in a position to roll it out until recently,” says Amos. “Signing the Enterprise Agreement gave us the ability to start with Office 2003 and then to deploy the next version when we were ready. Similarly, we were able to upgrade all our users from Exchange Server 2003 directly into a new Exchange Server 2007 environment, without additional software license costs.”

NuStar Energy has used the training vouchers associated with Software Assurance to save up to U.S.$6,000 on training for three IT staffers to improve their understanding of the Active Directory® service and disaster recovery procedures. Employees are also taking advantage of the Home Use Program to acquire a copy of the 2007 Microsoft Office system for only the cost of shipping and handling. “This will help reduce training costs as we roll out Microsoft Office 2007 across the organization,” says Amos.

Amos and his colleagues have taken advantage of 24-hours-a-day, 7-days-a-week problem resolution to reduce the costs of downtime as they worked to integrate business systems into a new operational environment. “The undivided attention we receive from our Microsoft contacts when we request support sums up the reasons why we went with a single vendor that places a high value on customer relationships,” he says. “Our Microsoft contacts have been incredible resources during our first year. Now that we have a well-supported suite of Microsoft technologies in place, the future looks bright.”  

Microsoft Volume Licensing
Microsoft® Volume Licensing offers customized programs that are designed to meet the needs of your business. Tailored for companies of different sizes and purchasing preferences, these Volume Licensing programs provide simple, flexible, and affordable solutions that can help you manage your licenses with ease. Whether you have five or thousands of desktop PCs, Microsoft Volume Licensing has the right program for you.   

To acquire the latest Microsoft technology at a significant cost savings through Microsoft Volume Licensing, contact your Microsoft Partner or local reseller.

To learn more about Microsoft Volume Licensing, visit:
www.microsoft.com/licensing

 

For More Information

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For more information about NuStar Energy products and services, call (800) 866-9060 or visit the Web site at:
www.nustarenergy.com