Business and IT Advantages of Running SAP in the Cloud
Domino Sugar, part of American Sugar Holdings, is the largest manufacturer and distributor of sweetener products in North America, inclusive of the Domino®, C&H®, Redpath® and Florida Crystals® brands. The company has grown to become a multi-billion dollar enterprise, producing four million tons of sugar per year with 180,000 acres of growing land, mills, distribution centers and an energy facility.
There’s no question that Domino Sugar views IT as a critical part of business, offering competencies to improve overall operations. As such, it is vital that they leverage best-of-breed infrastructure to ensure that their IT operations run efficiently, costs are controlled, and data is secure. Considering the proven benefits the cloud offers enterprises, Domino investigated the prospect of moving all of their IT infrastructure to the cloud to enhance IT operations, reduce risk and offload IT management, thereby redirecting IT resources to focus on other strategic projects and business process improvements.
Global Business Operations Challenges and the IT Environment
Domino markets and distributes products into three primary distribution channels: Industrial, Consumer (selling the three leading sugar brands in the United States), and Foodservice. All channels include a component that is export related and they continue to expand their international presence through acquisition. In 2010, their parent company American Sugar Refining Inc. completed its acquisition of Tate & Lyle PLC’s European sugar refining business.
Offering commodity products on a global scale presents various IT challenges associated with integrating operations. With several businesses operating in multiple countries around the world and new systems being added regularly, Domino’s IT infrastructure is incredibly complex and has gone through many migrations. Their IT environment began as a traditional on-premises data center. To optimize their operations over the years, however, they’ve eliminated as much hardware as possible and turned to vendors to house their software and data offsite. They moved first to a co-located environment, then to a hosted environment, and finally to an application services contract.
They have also historically tested and implemented new enterprise technologies and delivery methods to improve IT operations. For instance, they were early adopters of application outsourcing for their SAP deployment, which has grown in size and complexity. All critical production systems are driven by SAP, including enterprise resource planning, customer relationship management, invoice and orders systems, business intelligence, human capital management and payroll, among others.
Defining Goals and Identifying Trusted Partners
Though Domino Sugar continues to grow and expand operations, the IT team has managed to maintain their IT budget at less than one percent of overall revenue. For ongoing, efficient management of their IT infrastructure, they looked to the cloud to deliver flexibility and cost savings while improving speed, reliability and security of SAP production systems. They remained firm that whatever deployment option they chose could not sacrifice - even in the slightest - the performance of the SAP systems, which managed over 20 TB of data for thousands of users in North America.
When considering multi-tenant cloud vendors, Domino evaluated platforms based on the ability to guaranteed compute resources, data protection and industry leading SLAs. They wanted assurance that security and performance requirements were part of the contract. After evaluating several cloud platforms, Domino found the Virtustream xStream platform was the only true private cloud solution running within a multi-tenanted environment that could provide the right combination of performance and security worthy of their enterprise-class requirements.
Virtustream’s utility billing model stood out as a strategic advantage as it offered Domino the ability to pay only for the precise computing power that they consumed. Under their previous ASP model, they were constrained by the technology as adding capacity or storage required a lengthy commitment and often led to underutilized infrastructure.
The Move to the Cloud – Tangible Benefits
Following a 90-day migration process, Domino deployed their entire IT infrastructure on xStream, Virtustream’s consumption-based cloud platform capable of handling complex production applications. The project included a multi-thousand seat SAP enterprise application system. As a result, SAP systems now operate up to twice as fast on xStream and are highly available and secure. The xStream platform leverages an Intel Xeon processor 5680, which delivers a twofold performance increase over non-virtualized, older generation Intel processor - based servers.
Domino projects up to a 40 percent reduction in total cost of ownership over three years, while also increasing availability and shrinking disaster recovery times. The cost savings enable business growth and the flexibility they gain from running applications on the cloud enables their team to focus on delivering business value rather than managing hardware.
The most significant cost savings are associated with eliminating the need to purchase hardware for a specific amount of time. Virtustream’s utility-based deployment and pricing gave Domino the flexibility to rapidly add resources as needed. This allows for a more efficient utilization of resources and a true consumption based pricing model. Managed services will also be purchased based on aggregate workload per month rather than by infrastructure provisioned, delivering further efficiency to the bottom line.
The Tipping Point - SAP and Other Enterprise Applications in the Cloud
With the deployment onto xStream complete, Domino effectively runs the largest SAP production environment running in a multi-tenanted private cloud. This deployment shows a shift in thinking - CIOs and other IT professionals are beginning to trust cloud platforms and understand the benefits that can be achieved from cloud deployments.