Success with Hybrid Cloud: How Retailers Benefit

The Microsoft Hybrid Cloud - By Industry
Throughout this series I’ve taken a close look at the definition of a Hybrid Cloud, our perspective on why a Hybrid environment is so valuable, and a piece-by-piece look at the solutions and tools that constitute a Hybrid Cloud. All of this was followed by an equally detailed look at how to plan, build, deploy, operate, and save money with a Hybrid Cloud. With this foundation in mind, now I want to show how the Hybrid Cloud can go to work.
The first industry-specific post is about retail.
In the retail industry, a Hybrid Cloud has a huge impact in three key areas I’ll examine in this post:
  • Massive Scale
  • High Availability
  • Cloud-integrated Storage

Scale

For a retailer of any type, the ability to scale – and having an infrastructure that is resistant to failure during high traffic – will always be one of the key differentiators in the success (or failure) of a retail organization.
Scale isn’t just limited to number of locations – retail scale equates to leverage when buying from suppliers and that means sharing this cost savings with customers. Scale also means having the technology capacity to handle spikes in demand from your customers when they need your services most. Scale also isn’t limited to brick-and-mortar – the ability for a datacenter to scale to meet the demand of their online business is every bit as important. How a retailer responds to sudden spikes in visitors and transactions can make the difference between a successful or catastrophic quarter.
One place where this kind of scale is successfully built into the DNA of the datacenter is the British luxury fashion designer Paul Smith.
When we began working with the IT team at Paul Smith several years ago, they had scaled-related challenges that will sound pretty familiar to many IT teams in the retail industry:
  • They needed to reduce servers and data center costs.
  • They needed to enable a more centralized way to provide global services via a simplified data center administration and the automation of many manual tasks.
  • The IT team also needed to expedite the provision of test and development environments.
  • At a corporate level, there was a need to find and use less expensive and time-consuming ways to accommodate fluctuating demand for compute and storage (other than just buying more servers).
  • To reduce unnecessary “midstream” expenditures, the company wanted to better understand how their IT resources were being used and how to better plan for their capacity.
As daunting as any one of these needs may seem, the Microsoft Hybrid Cloud has the capacity to address each of these needs. Since we began working together, Paul Smith has successfully used Microsoft’s cloud technologies to re-architect its global data centers, optimize its IT infrastructure, and use the latest virtualization, cloud computing, and data center management solutions.
To quote an upcoming case study on Paul Smith’s IT infrastructure, consider their perspective on developing and operating a Hybrid environment:
Paul Smith will use Windows Server 2012 R2 and System Center 2012 R2 to introduce hybrid cloud computing to the business. Taking advantage of a hybrid cloud solution from Microsoft means that Paul Smith can choose whether to build new environments or deploy applications on-premises or in Windows Azure, based on business needs.
Paul Smith can use Windows Server 2012 R2 and System Center 2012 R2 [combined with StorSimple] together as a hybrid cloud solution to achieve seamless operations across private and public clouds and to manage its hybrid cloud environments. IT staffers can also easily move existing applications between private and public clouds without having to change networking, security policies, or operational processes.
The benefits of this Hybrid environment have been big for Paul Smith – a few key stats include:
  • The company now has all the virtual cores, virtual memory, and storage that it needs, even for its most intensive workloads.
  • These workloads currently perform 10 percent faster compared to running on a physical server.
  • As of today, Paul Smith has virtualized 80 percent of their servers and it has room for more than 1,000 virtual machines.
  • Using Hyper-V to increase virtual machine density and derive more value from hardware, they have increased density by almost 200 percent (from 28 virtual machines per host server to 83 virtual machines per host server).
  • With this virtualization and increased server density, Paul Smith reduced hardware acquisition and maintenance costs by £800,000 ($1.2 million USD) in the first year they deployed Windows Server 2012.
  • With System Center, the IT team has identified 25 different processes for automation – which will dramatically expedite in-house development times via self-service.
Once this case study is public in a couple weeks, I’ll share a link to the entire piece.
One other note about scale: When it comes to online sales, the Hybrid Cloud allows retailers to separate the web-facing components of a 3-tier online property and host these in Windows Azure when they can then elect to maintain the back-end transactional processing (credit card processing) on-prem. This is a powerful combination of scale, power, and security. Also, recent PCI DSS compliance validation for Windows Azure helps make these configurations possible for those in the retail space, as well as for merchants to leverage Windows Azure to achieve their own PCI certification. To learn more, check out Windows Azure PCI Attestation of Compliance and Windows Azure Customer PCI Guide.

High Availability

The Hybrid Cloud model described at the beginning of this post offers unique capabilities for retailers, particularly when it comes to seasonal bursting and cloud elasticity. It helps retailers load balance their information just as they would their staff during busy seasons.
For much of the year a retailer can operate their business in-house (on-premises) with the Microsoft Private Cloud Solution and then during this mission-critical time of year, they can leverage Windows Azure capacity to extend their footprint and scale up to meet business demand – all without incurring new capital investment costs or lengthy on-site implementation processes.
Retail organizations all over the world experience huge increases in demand between November and January, and the ability to remain available throughout these peak periods and then burst capacity when necessary is where the superiority of a Hybrid Cloud really shines. This is true for Paul Smith who sees a massive traffic spike from holiday shoppers looking for luxury items or responding to one of the 10 million promotional e-mails they send during these months. During these months their site must remain available – and the internal applications employees require to remain optimally effective need to always be accessible.
This high availability is critical to Paul Smith’s operation and has enabled them to grow across three continents and dozens of cities around the world. When we first began working with them, one of their requirements was to have a business continuity plan and a disaster recovery system that could keep them up and running at all times. Today their Hybrid Cloud supports a disaster recovery time that has dropped from 48 hours to 5 minutes – and the new Hyper-V solution costs 50% less.
For retail IT teams, there are a lot of other technical challenges beyond how the company’s website is operation. Inventory management, for example, is another massive undertaking that directly impacts the bottom line.
A great example of Hybrid Cloud-enabled inventory management system is found at Trek Bicycle Corp. The team at Trek has built an incredible inventory management system to handle demand – and it is a great example of the benefits of combining public cloud IaaS (Azure) to complement existing on-prem datacenter solutions. This solution has proven to be more effective, easier to manage, and cheaper. You can see this solution in action here. And, on the topic of inventory management, Target has also built an inventory management solution in a Hybrid environment.

Storage

The IT needs of retailers are a unique combination of front-end and back-end infrastructure that needs to host huge amounts of data for public consumption (online catalogs, inventory, promotional data), as well as sensitive data like credit card numbers, contact information, and shipping requests. All of this calls for vast storage resources – and without a cost effective cloud-integrated storage option, these storage needs can rapidly become unsustainable.
The solution to this problem was, in part, acquired last November. In 2012, Microsoft acquired the cloud-storage provider StorSimple which provides the technology for enterprise storage devices that help retailers manage unstructured data growth. This kind of unstructured data is an unsolved problem for most IT organizations – and retailers are no exception.
Here’s how retailers can benefit: The StorSimple device automates time consuming storage processes and transparently uploads data to Windows Azure Storage services, allowing the IT team to focus on other problems. By keeping frequently accessed data on premise, application performance remains high and data is kept within company security protocols. Applications using the StorSimple appliance reap the performance and security benefits of keeping applications and working set data on premise, while shifting the burden of less frequently accessed content storage to the cloud.
This setup has a major impact on performance for both regular application workloads and backup/recovery since only the working set has to be moved to the cloud. For retailers, this translates to optimizing the hardware requirements in stores.
Having a reliable and thorough storage solution is invaluable when it comes to analyzing this data for emerging market trends, or for retailers who need to organize this data to generate quarterly reporting data and/or end-of-year numbers. Extending computational and transactional needs into Windows Azure can be a much more efficient and cost-effective approach to gaining this capacity without significant up-front investments of time and capital.
This overview of the Hybrid Cloud’s advantages for retailers is a quick look at a much more detailed conversation, but I believe it’s clear that there are real, substantive advantages to operating a Hybrid environment and maximizing every penny of your IT budget. To learn more, get in touch with your Microsoft rep and discuss how the components of a Hybrid Cloud can work for you.