Mixed grill: Smithfield Foods runs its $15 billion pork business using a hybrid cloud

Can you build an empire on ham?

Just ask Smithfield Foods, the largest pork producer and processor in the world, which weighs in at a $15 billion global enterprise serving thousands of retail and foodservice customers and millions of consumers. The company hails from Smithfield, Virginia, home of renowned hams and cured meats since the 1700s. Today, millions of consumers purchase Smithfield’s family of brands every year, making Smithfield the number one US producer of packaged pork products.

Go fast

While Smithfield has been using the same ham recipes since the company’s founding in 1936, its business has changed dramatically in just about every other way—thanks to technology and data. The latest digital tools keep Smithfield’s facilities and offices running smoothly, deliveries on time, and daily decisions clicking along quickly and accurately.

“Our decision makers, whether executives or front-line workers, can’t afford not to be connected to our digital systems and to one another,” says Julia Anderson, Global Chief Information Officer at Smithfield Foods. “Our pace of decision making is so fast that we need around-the-clock, reliable, secure access so we can provide and absorb information for fast action.”

Easier said than done. With technology changing so fast, new applications and devices can be out of date nearly as soon as they’re deployed. “It takes a long time for a large organization like Smithfield to roll out modern technology, and by the time we’ve rolled out a solution, it’s already time to start deploying the next version,” Anderson says.

Around 2008, Smithfield decided to circumvent the technology catchup game and gain a competitive advantage by outsourcing its datacenters to a global managed services provider. This freed up IT resources for higher-value work than maintaining infrastructure. However, the outsourcing model did not work in the long run due to Smithfield’s need for faster responses to business demands.

Leapfrog to the cloud

While Smithfield was committed to the idea of having someone else run its datacenters, it wanted even more agility and flexibility than a managed services setup provided. During this time, Matthew Douglas was experimenting with the public cloud, which would provide lower costs and more infrastructure flexibility and an easier way to make business data accessible to workers wherever they were.

By 2016, Douglas, who is Director of Cloud and Solutions Architecture at Smithfield, and his team had spent three years putting public cloud services (Microsoft Azure, Amazon Web Services, and others) through their paces, building hundreds of virtual machines, testing network capacity, and carrying out rigorous performance tests. They recommended to Jeff Thomas, CTO, that Smithfield “leapfrog technologies to the cloud,” as Douglas puts it, specifically to Microsoft Azure.

“By moving some of our infrastructures to a public cloud, we could wash our hands of IT infrastructure and focus on our core business,” says Douglas.

Adds Anderson, “Microsoft has a great commitment to the problems of the enterprise. The security built into Azure is huge for us and ensures the safety of our data wherever it is.”

Smithfield had already standardized on Microsoft Office 365 to give its 50,000 global employees cloud-based productivity and communications tools. The company saw that Office 365 made it much easier to keep software up to date, easily deployed, and malware-protected.

Gain hybrid cloud flexibility

Smithfield craved the same benefits for its datacenter applications, but knew that it could not move the company’s hundreds of applications and thousands of servers into the cloud overnight. It would be a journey, with some applications straddling both Smithfield and Azure datacenters during the transition and others never moving to the cloud at all.

For example, livestock feeding systems, plant automation systems, warehouse management systems, and other applications need to run on servers in Smithfield factories and warehouses, because their data can’t travel to and from the cloud quickly enough for workers to do their jobs. Think about a worker scanning livestock with a barcode reader; the data is sent to a plant server, which pings an immediate response back to the worker. Most Smithfield plants are located in rural areas with less than stellar internet bandwidth, and workers can’t wait several seconds per scan for data to travel to the cloud and back.

To connect major global Smithfield office locations to Azure, Smithfield uses Azure ExpressRoute. “The key to our hybrid use model success is Azure ExpressRoute and Equinix; this setup is awesome,” says Douglas. “Azure networks have been growing consistently, and the performance is amazing.” Equinix is one of many Azure ExpressRoute partners, providing a high-performance, private, and a highly secure connection between customer IT environments and Azure.

Using Azure Active Directory, Smithfield authenticates users to applications that run in Azure, in Smithfield factories and warehouses, in software as a service (SaaS) provider datacenters, or in other public clouds. For example, Smithfield runs SAP, its most business-critical application, in another cloud provider but easily connects SAP to Azure-based applications and authenticates users to all these applications using Azure Active Directory.

In addition to its hybrid cloud flexibility, Azure had other advantages. “We felt that Azure had one big thing that Amazon Web Services did not: a global network backbone,” Douglas says. “We have factories all over the world, from Virginia to Romania, but we couldn’t use the Amazon Web Services network to transfer data between regions. With Azure, we can. We can transfer data to all our locations without leaving the Azure network, which delivers lower latency, lower costs, and higher security.”

Azure additionally provided great support for Red Hat Enterprise Linux, the primary operating system used at Smithfield. “We’re a Linux-first shop and longtime users of CentOS,” says Russell Hackworth, Cloud Solutions Architect at Smithfield Foods. “But we moved to Red Hat Linux chiefly because of the Microsoft-Red Hat partnership. The two companies work together to provide great support, and Red Hat Linux in Azure is very stable.”

Innovate faster

Smithfield raced to migrate hundreds of applications to Azure before its managed solutions provider contract expired. It started by migrating applications to Azure infrastructure as a service (IaaS) services, namely Azure Virtual Machines, Azure Storage, and Azure Virtual Network.

Then it used Azure Backup to back up both on-premises and Azure servers, and Azure Site Recovery to reduce application downtime and provide business continuity.  Other data is backed up locally to Microsoft Azure StorSimple devices, which store frequently used data onsite and send infrequently used data to Azure.

With its datacenter infrastructure in Azure, Smithfield teams across the business can innovate faster. A marketing team wants to deploy new software to analyze promotion effectiveness? They’ll likely have it tomorrow.

A research team needs new servers and tons of storage to launch a new data-intensive research project? No problem; IT can deliver the resources in 24 hours.

Relieved of constant upgrade and maintenance work, the Smithfield IT staff has newfound freedom and alacrity to deliver projects that support the company’s business. “Because of the rapid access to resources in Azure, we can have a new application up and available in one day versus the 30 to 60 days that it took three years ago,” Douglas says. “We have gained an incredible level of agility.”

Adds Anderson, “The exciting thing is, no matter what innovative idea our employees have, whether its drones in the warehouse or a new pick-pack machine, we can spin up a development environment very quickly and inexpensively as a sandbox to start testing ideas. We've never had that before; we needed six to eight weeks to spin up a development environment. It’s opened doors right and left for us to be more innovative.”

Another example of innovation acceleration: Smithfield is using the simple single sign-on provided by Azure Active Directory to feed the company’s appetite for SaaS applications. “Microsoft has links to many SaaS applications in the Azure Marketplace,” says Douglas. “If I need a SQL database, it’s there in the Marketplace, ready to go. We just flip a switch and employees can securely begin using these services.”

Smithfield “lit up” ServiceNow overnight, says Douglas, speaking of a popular IT service management software solution. “We were able to grant all IT employees access to ServiceNow in one day using Azure Active Directory authentication,” he says. “It’s incredible that we can roll out productivity-boosting tools like this in 24 hours.”

Faster deployment of new applications speeds innovation across the company, especially for front-line workers—in factories, warehouses, and trucks—who previously were shut off from many corporate applications because they don’t work at network-connected PCs. One mobile application used by Smithfield delivery-truck drivers was slow and unreliable, challenging worker patience and productivity. Smithfield moved the application to Azure, began to authenticate workers using Azure Active Directory, and instantly, the company boosted driver productivity and sense of accomplishment.

In recent years, Smithfield has ventured beyond the dinner plate and lunchbox to assume a respected spot in the medical and biosciences worlds. It provides tissue for people with burn injuries and ingredients for thyroid, diabetes, and blood thinning medicines. Scientists and researchers in these new business areas, too, can innovate and move faster using cloud resources.

Employees also move faster with faster access to business data for daily decisions. “We’re using Microsoft Power BI to give our staff visibility into our KPIs around on-time deliveries, product freshness, and other factors, which is a big deal for us,” Anderson says. “Power BI helps us understand our orders, fill and deliver them in a timely manner.”

Adds Hackworth, “Power BI is our new go-to reporting tool. We can quickly create dashboards for any data we need. We use gateways to get to SAP data and report on it.”

Slash datacenter costs by 60 percent

Not only has Smithfield dramatically accelerated innovation by running its business in Azure, but it’s saved a significant amount of money. “We’ve reduced our datacenter costs by 60 percent by moving to Azure," says Douglas. The savings come from: 

• Reducing the company’s server infrastructure by 60 percent, which is due in large part to the greater compute capacity in Azure that has allowed Smithfield to consolidate virtual machines. Smithfield streamlined its servers from over 1,200 to 650 and, at the same time, cleaned up its application portfolio and leaned down its application count from 320 to 98. 
  
  

• Optimizing its Azure resource use with intelligent data analytics. Using Azure security and operations management services, the team collects extensive data about its infrastructure—utilization statistics, security patch data, and more—and uses it to run a lean infrastructure with no fat.
  
  “We learned from Azure Log Analytics that one of our applications consumed large amounts of memory and CPU resources at certain times of the day,” Hackworth says. “We dumped that data in Power BI and built the business group a dashboard so they could see which processes were spiking performance. They were able to smooth out their workflow to shift certain activities to off-hours and reduce CPU and memory usage and costs.”
  
  Conversely, the IT team can see when it needs to upgrade CPUs and memory for applications. “With Azure Log Analytics, we can optimize our Azure resources and eliminate ‘cloud runaway,’ which is a huge benefit,” Douglas says. “We can rightsize our resources, saving money for the business.”
  
  The team also uses the Cloudyn cost management solution to track costs and get infrastructure optimization tips. Cloudyn will point out that a virtual machine (VM) isn’t being utilized and recommend switching to a smaller, lower-cost VM. “These small adjustments add up to big savings over the course of a year,” Hackworth says. 
  
  

• Gaining a precise accounting of its application portfolio by using Azure Application Insights. This led to the above-mentioned software housecleaning and improved performance for remaining applications. Smithfield is just starting to use Azure Automation features such as PowerShell runbooks to do things like automatically shut down virtual machines that aren’t being used.
  
  

Enhance security, reduce outages

The data analytics and insights from Azure also contribute to enhanced security, which is essential for a global business whose data is crisscrossing the world.

“I get an email from Azure every time someone touches an Azure network security group or issues a server shutdown or an application experiences repeated sign-in failures,” says Douglas. “We can check to make sure that our infrastructure doesn’t have an open port to the public internet or is experiencing a brute-force attack. We’ve been able to lock down our security much tighter with Azure Security Center data.”

Using Azure Resource Manager, Douglas’s team has been able to standardize and automate infrastructure elements that were left to individual technicians before, which reduces the chance of human error that could lead to downtime. “We used to have outages every day, but we’ve had zero downtime with Azure,” Anderson says. “There’s been a big improvement in our ability to keep  front-line employees working and not have outages. That means fewer interruptions to the business.”

Modernize and streamline further

Now that Smithfield has successfully migrated its business applications into an Azure IaaS environment, it is moving to modernize them with serverless computing and other innovations found in the Azure platform as a service (PaaS) offerings. 

The team is beginning to use Azure HDInsight to quickly spin up Hadoop clusters, and it has deployed an Azure data science environment for order-entry data analytics.

“With Microsoft building and managing the infrastructure, it has freed our staff to be more creative in thinking about how to use new technologies to benefit the business,” says Douglas. “Most exciting for IT is the fact that our company trusts us. People see that we’re producing, achieving wins, that we’re a team that gets solutions delivered. More of the business is coming to us to get more delivered.”