Carlsberg Group follows a recipe for success with Microsoft Azure, SAP, and a cloud-first strategy

Bottles, trucks, kegs, taps, frosty mugs… these are just a few of the things that might come to mind when you think about the beer industry. But what about databases, virtual machines, and the Internet of Things (IoT)? In today’s world, where the cloud can help turn a small startup into a global brand, it’s imperative for established companies to keep up with technology trends or risk losing market share to tech-savvy industry disruptors.

For Carlsberg Group, combining beer and innovation is nothing new—the company set up the Carlsberg Laboratory in 1875 to explore the science of beer making, and its discoveries include the pH scale for measuring acidity. These days, the company is taking that same forward-thinking approach to IT.

“We have a multi-pillar corporate strategy called SAIL’22, and a key element of that is winning with digital,” explains Mark Dajani, Chief Information Officer at Carlsberg Group. “That means doing more than just digital marketing and social media—it means finding digital innovations that fundamentally change how we run the company. Embracing the cloud was a step we had to take in order to spend less time worrying about IT and more time making the world’s best beers.”

Becoming cloud-first on the way to cloud-only

Carlsberg has been in business since 1847. After many years as a small, regional brewery, it has grown through acquisitions to become the world’s fourth-largest beer manufacturer, with nearly 150 brands in more than 100 countries. In 2018, net revenue topped DKK62 billion (USD9.4 billion). This rapid expansion was not without growing pains. Each acquired company brought its own IT ecosystem and ways of working, so Carlsberg deployed Microsoft Office 365 across the enterprise to make it easier for employees to collaborate. The company then focused on its datacenters.

“Migrating our infrastructure to the cloud was a daunting task, but we needed to do it so that IT can be a driver of change within the company, instead of something that ties us to old ways of doing things,” says Dajani. “The cloud gives us flexibility, agility, and scalability, and it eases the process of moving into new markets because we don’t have to worry about hardware, latencies, and other on-premises headaches. We’ve got a cloud-first strategy now, and I see that becoming cloud-only in the future.”

Jawaz Illavia, Vice President Commercial and Digital in Global Business Services at Carlsberg Group, concurs. “It really is about embracing a new mindset within the organization,” he says. “We have to find new ways of working and new ways of thinking about our business so we can take advantage of the digital opportunities that arise in today’s fast-changing technology landscape. We want to be a leader in digital transformation and not just in our own industry. And, quite frankly, we can’t do that without the cloud.”

With its cloud imperative in mind, Carlsberg set out to find the right cloud platform for its business and the right technology partners to smooth the transition. Carlsberg chose Microsoft Azure over other possible options. “Each cloud company has its own particular strengths, but what led us to migrate to Azure was that it’s a solid, balanced, end-to-end platform with strong support, a high level of security, and a rich suite of services and products,” says Dajani. “Microsoft also brings the knowledge to help us find the best strategies for dealing with our legacy applications.”

Planning the migration, down to the last detail

Carlsberg approached the migration with the goal of moving as many of its applications as possible to the cloud and shuttering a significant portion of its datacenter footprint. The company spent time assessing which applications could be moved and which would need to remain on-premises, at least for now.

“We knew there would be some issues of compatibility due to operating systems or application versions, and we made plans for those applications where necessary, but they were the exceptions,” says Laurent Gaertner, Director of Hosting at Carlsberg. “SAP is at the heart of our business IT, and we built our migration strategy around those core applications.”

Carlsberg knew that a migration of this complexity would require a team of experts. In addition to getting help from Microsoft, Carlsberg also enlisted the assistance of Microsoft Partner Network members Accenture and Avanade. An important part of Accenture’s role was to help plan and execute the migration of Carlsberg’s SAP assets, including the company’s customer relationship management (CRM) and enterprise resource planning (ERP) applications. Carlsberg also relies on the SAP Advanced Planning and Optimization (SAP APO) tools.

“SAP is one of our most important workloads, and it’s one we can’t take chances with,” says Dajani. “If SAP goes down, Carlsberg can’t ship product. Our SAP landscape is very complicated, with a lot of interdependencies, so migrating piecemeal wasn’t really an option—it was an all-or-nothing situation.”

In addition to the technical challenges, Carlsberg had a tight, specific schedule. Beer sales are highest during June, July, and August and over the holidays in the last few months of the year—during those periods, breweries run 24/7, and downtime really isn’t an option. So the migration had to take place between January and May or risk possibly being delayed an entire year. This made advance preparation crucial to the success of the project.

A key learning from the migration was the need for full business buy-in. Because production had to stop during the migration, business decision makers needed to understand the importance of this technology project. “I would make the case that technology is no longer something you do separate from the business,” says Dajani. “Today, the lines between technology and the business are almost indistinguishable. Our business stakeholders understood that this migration represented more than just running better IT. It was about building a platform that will help us fulfill corporate, employee, customer, and consumer needs.”

Carlsberg addressed issues of security controls, governance, and network connectivity during high-level design planning prior to the migration. At this phase, the company made decisions about the number of subscriptions to use, how to set up access and security zones, and the best network connectivity choices, including the use of Azure ExpressRoute. Carlsberg also used the IT changes as an opportunity to upgrade the skill sets of its employees so they can excel in a new cloud-first world.

“We want our people to understand the possibilities that our technology can provide,” says Dajani. “To do that, we need to make sure that they are positioned to make the best use of that technology to achieve business goals and not just bring legacy processes to a new IT environment. Investing in our employees’ capabilities delivers dividends to the whole organization.”

Turning great planning into a flawless outcome

With the big migration scheduled, the Accenture-led project team took advantage of opportunities to do trial runs. It started by moving some small business workloads to Azure. That went smoothly, so the team turned to the first SAP workload. At the time, the Italian office was running its own SAP installation for ERP and the team tested its migration strategy there.

Ultimately, the full migration encompassed 700 servers and 350 applications—including the essential SAP applications—involving 1.6 petabytes of data, including 8 terabytes for the main SAP database. Carlsberg used SAP heterogeneous migration tools and Azure Site Recovery for migration, and it used standard SAP HANA database replication from existing nodes to SAP HANA Large Instances in Azure running SUSE Linux Enterprise Server. An Azure ExpressRoute migration link connected the Carlsberg datacenter to Azure. At the same time as the migration, the company also replatformed its on-premises database from IBM Db2 to Microsoft SQL Server. The flexibility of being in Azure will simplify Carlsberg’s plan to move that to SAP HANA in the future. Carlsberg is also taking advantage of Azure Premium SSD high-performance storage for its low latency and high scalability.

For business applications, Carlsberg was able to adopt a lift-optimize-shift approach in most cases, but the company will do whatever is necessary to get its resources into Azure. “Our vision is to have everything in the cloud, and we will refactor, replatform, or do whatever we need to make that happen,” says Sarah Haywood, Chief Technology Officer and Vice President of Technology at Carlsberg Group. “For now, we have a bit of a hybrid implementation because there are some applications whose future we haven’t decided on. Microsoft has helped us there, too, to cost-optimize resources both in Azure and on-premises.”

From planning through execution, the project team completed the datacenter and SAP migration in less than six months, with no significant downtime, and that stability has continued as the Azure estate has matured, without a single high-priority incident.

Optimizing Azure and contemplating future innovations

Now that Carlsberg has been running its infrastructure and SAP estate in Azure for a while, the company has gotten smarter about its cloud usage. “When we first migrated, we gave ourselves extra cloud capacity to make it easier to do the necessary imports and exports within our tight time frame,” explains Haywood. “Now we’re focused on rightsizing and tuning. For example, we shut down some resources at night when we don’t need them, which optimizes our cloud consumption.”

Moving IT from on-premises to the cloud is a money saver for most companies because of the reduction in on-premises hardware and maintenance costs, and Carlsberg is no exception. The fine-tuning the company is doing now delivers even more cost efficiencies.

The advantages of moving to the cloud extend to Carlsberg’s e-commerce platform as well. “We’re seeing a huge benefit in terms of scalability,” says Haywood. “We build out resources in the cloud as we need them, in a way that would have been impossible in a physical datacenter. We also trust in the security of Azure, which is important for any business site.”

What’s next for Carlsberg? “Now that we have SAP in the cloud and we have a platform for digital innovation in the cloud, we’re looking for the projects that will benefit most from that synergy,” says Haywood. “With Azure, we’ve lifted our entire IT landscape up to a higher level where we can drive experimentation with much less risk and much less cost. Right now, we’re looking at getting further into digital and IoT to deliver the best possible experience for our brands.”

Stakeholders within Carlsberg are excited about the company’s digital future, and those outside Carlsberg are taking notice as well. “Every day, I get resumes from people who want to come work at Carlsberg because they’ve seen the journey we’re on and they want to be part of it,” says Haywood. “Our cloud migration has been a huge opportunity for us to show that the IT organization is more than just a provider of PCs. We’re the enablers of the digital foundation on which the company will build its future successes.”

For more about the architectural decisions involved in the company’s migration to Azure, read the Carlsberg technical story.

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