CTT - Correios de Portugal migrates to Azure to immediately reduce costs by 15 percent and increase flexibility

CTT is always thinking about how it can deliver valuable new services to its customers. Despite being more than 500 years old, the company has an impressively fresh outlook. “We’re the oldest startup in the world,” jokes Rui Pedro Saraiva, Chief Information Officer at CTT- Correios de Portugal. “We consider ourselves the new upstart in the market, and our goal is to be the biggest courier service provider on the Iberian Peninsula.” In addition to its postal business, CTT has launched an innovative crypto stamp and has added digital products and business and financial services to its portfolio as it continues to expand services across Portugal and Spain.

To support its ambitions, CTT implemented a cloud-first strategy to consolidate and modernize workloads, add flexibility and innovation capabilities, and cut costs in the process. “Our IT portfolio was almost as old as our company,” notes Saraiva with a smile. “We have numerous aging systems and applications that need to be modernized to better control our capital expenditures.” As the company’s secondary datacenter approached end of support, CTT decided to migrate the development and testing workloads it ran there as an initial learning phase. The company worked with Avanade, which conducted the initial assessment and helped perform the complete migration along with CTT and the Azure Migration and Modernization Program.

A measured migration approach

CTT migrated all of its secondary datacenter’s Windows Server and Linux workloads running on top of Hyper-V to Azure, and the company retained its primary datacenter and kept proximity-based workloads in its secondary datacenter for latency reasons. CTT is retaining a hybrid infrastructure for now, and it’s using its cloud-first strategy to help position applications and infrastructure for modernization or retirement.

The company’s cloud deployment takes advantage of numerous Azure products and services. The company migrated both Windows Server and Linux workloads to Azure, which it runs on Azure Virtual Machines. CTT uses Azure SQL to support its database requirements, it draws on both Azure App Service and Azure Kubernetes Service (AKS) to deploy applications to the cloud, and it uses Azure Logic Apps to support interoperability. Additionally, the company upgraded its reporting solution by shifting to Power BI to add data visualization capabilities.

With a single pane of glass across part of CTT’s Azure and on-premises environment, the company is unifying its management and operations with key Azure services to build and operate highly automated, resilient, and scalable applications without compromising central security, governance, and control. To help manage, monitor, and safeguard its hybrid environments, CTT uses Azure Monitor, particularly its Log Analytics and Application Insights features, which provide far greater visibility than it had on-premises. To extend Azure Monitor’s observability to its on-premises environment, CTT adopted Azure Arc. To better manage its hybrid estate, the company uses Azure Arc as a natural evolution of System Center Configuration Manager for its servers. In terms of security, the company installed Microsoft Defender for Cloud for all the services it has migrated, and it takes advantage of key alerts with Microsoft Sentinel and uses Azure Firewall and Azure Key Vault. Finally, CTT uses Azure Backup to provide resilience and failover for its cloud workloads with durable storage options to meet its compliance objectives and recovery time requirements.

The company also takes advantage of Azure Hybrid Benefit for both its Windows Server and SQL workloads. Additionally, CTT hopes to benefit from Extended Security Updates in conjunction with Azure Arc to keep some of its older workloads supported and secured, and it has hotpatch on its roadmap.

Greater flexibility with lower costs and emissions

By migrating workloads to the cloud, the company can now scale to support new developments and better manage peak loads far more readily. “We have way more flexibility than we had on-premises,” says Paulo Costa, Infrastructure Monitoring and Collaboration Manager at CTT - Correios de Portugal. “As we migrate our workloads to Azure, we can analyze and adjust resources accordingly, reducing and increasing capacity as needed.” The ability to effortlessly add and remove resources is helping the company manage costs and emissions. With a boost from Azure, the company is using automation to turn off servers nightly, which is reducing both its carbon footprint and its costs. “We’ve calculated an initial savings of 15 percent by migrating to Azure,” Costa adds. “It’s fantastic!”

Shifting to consumption-based infrastructure and a platform services model will also result in long-term cost savings. The company calculated that running infrastructure in the cloud as an operational expense is more cost-effective than the capital expense of buying new hardware. “With asset depreciation, the business case for our Azure migration investment is made in only six years, and that doesn’t even factor in benefits we gain like faster time to market, greater resilience, and reduced management effort,” says Saraiva. By using on-demand Azure services, CTT can better focus on delivering value for its customers instead of having to dedicate resources to continuously managing and optimizing infrastructure. “We don’t have a lot of people to do this type of work,” adds Saraiva. “We need to focus them on what’s essential for our business and not on managing infrastructure, so taking advantage of Azure infrastructure management services is a major benefit for us.”

A future-oriented infrastructure

With the success of its initial migration, the company’s IT team has demonstrated that it can run workloads in the cloud with better monitoring, security, stability, and resilience than it could before, and it’s given itself the agility to better support business needs. And being able to spin up new environments quickly and easily and access broad Azure functionality means that the business is better positioned to take advantage of real innovation. “We have access to incredibly powerful technologies with Azure,” says Costa. “For example, if we want to develop AI solutions, all we need to do is provide an environment, and our developers can get to work. We can provision new resources in only a few hours, which used to take us more than a week, and we can get new solutions to market far faster.”

The cloud has unleashed new prospects and given the company a competitive edge. “Azure is a big enabler for us to provide our customers with the products and services they need, when and where they need them,” says Saraiva. “Having the flexibility to scale resources as necessary to satisfy our customers gives us the confidence to thrive in this competitive market.”

But for now, CTT’s initial proof of concept has demonstrated to the business that the cloud is the right path toward future success. “By migrating to Azure, we’re reducing our technical debt and gaining a trusted managed services provider,” concludes Saraiva. “A bonus of the cloud is that the more you optimize your workloads, the more you stand to gain. With Azure, we’ve positioned ourselves to reap the rewards of the cloud rather than paying more interest on technical debt. It’s a huge advantage.” 

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