Modernizing Factory Operations and Saving 45% on Costs Using AWS Outposts with British American Tobacco

BAT is a multinational consumer goods company that provides tobacco and nicotine products to millions of customers in more than 180 countries. The company is committed to “Building a Smokeless World and Creating a Better Tomorrow,” and it must comply with strict regulations for auditing in the countries in which it operates.

Previously, BAT relied on on-premises data centers. To accelerate its Tobacco Harm Reduction mission through science and research, BAT embarked on a cloud migration journey in 2014. The company aimed to adopt a cloud-first strategy that would drive increased agility, reduce costs, and speed up product innovation. With a goal of running 95–98 percent of workloads in the cloud, it had migrated about 80 percent of these to AWS by 2024.

However, factory systems—including manufacturing execution systems (MES) and some older machinery that connects to programmable logic controllers and robotic devices—are extremely sensitive to latency issues. In addition, BAT is subject to strict regulatory compliance, so its MES requires high reliability, detailed tracking, and, in some countries, data residency. To meet these requirements, BAT began a pilot program for this step of the cloud migration at one factory in Mexico and chose Outposts to provide core AWS services at its manufacturing sites for workloads that require data residency or low-latency connectivity to site equipment. To meet its aggressive timeline, the company did a lift-and-shift migration from its on-premises VMware environment so that it wouldn’t have to reinstall applications.

BAT powers its systems using Amazon Elastic Compute Cloud (Amazon EC2)—which provides secure and resizable compute capacity for virtually any workload. The company used Outposts to run some virtual machine workloads on premises and connect to a broader set of AWS services in AWS Regions, physical locations where AWS clusters data centers. At the factory in Mexico, BAT migrated 13–15 critical systems, including its global MES, a mission-critical system responsible for managing all the orders a factory will produce. It migrated several additional systems to Outposts, such as supervisory control and data acquisition systems that connect to onsite programmable logic controllers, inventory tracking systems for government regulators, and Microsoft SQL Server and Windows Server workloads. “We went live in 4 months with no impact to production and no issues on Outposts,” says Claudio Kaist, IT service director at BAT.

In the first factory that the company migrated to AWS, BAT is using Outposts to support 24-7 operations. According to internal user feedback, the MES is running as well or faster on Outposts than on previous systems, operating with low latency—between 1 and 3 ms.

With its hybrid cloud architecture on AWS, the company can build and scale infrastructure more quickly. Instead of contacting a procurement team to order hardware and waiting months for delivery and configuration, BAT can simply request capacity through its Outposts portal. Then, it takes only 1–2 days to set it up with the existing systems. “We feel very flexible using Outposts,” says Sandokan Sterque, global head of cloud and networks at BAT. “During the project, we received a request from senior management to increment one extra system. We could do that quickly, and that is flexibility.” As a result, BAT is achieving faster time to market—in weeks instead of months.

BAT cut costs by 45 percent by reducing operational overhead and licensing costs. Because it can use the same APIs, automations, and security controls across both AWS Regions and on-premises locations, the company has streamlined development and improved IT efficiency. “We are much less hands-on with the hardware than we were before,” says Sterque.

BAT also increased the security and resiliency of its systems on AWS. Before, it was saving backups on physical hard drives stored outside each plant. Now, the company saves backups in AWS Regions, improving business continuity during natural disasters. And factory workloads can continue operating through temporary network disconnections. If local power or internet infrastructure experiences occasional outages, it doesn’t affect production because systems are connected to Outposts. BAT can also respond to disasters within hours instead of weeks, with factory workloads failing over seamlessly to nearby AWS Regions.

BAT values the simplification that it has achieved through this project. “In the traditional data center, we had many contracts to support the hardware, licensing, and so on,” says Kaist. “Now, we have one agreement with AWS, and we simply incorporate additional AWS services as we need them.”

The company plans to migrate workloads to AWS in additional factories, and it’s in the process of migrating its largest factory to Outposts in 2025. “By combining AWS Regions and Outposts, we standardized our management interface across cloud and on premises and reduced our infrastructure costs,” says Kaist. Along with its hybrid cloud architecture that has been beneficial for its VMware workloads, BAT is exploring which additional systems it can run entirely in the cloud and looking forward to using more AWS services to improve operational efficiency and accelerate product innovation.

“There are so many opportunities for connecting, using, and sharing data and information between factory devices,” says Sterque. “We’re asking exciting questions: What can we do better, and how else can we use AWS services to give a better experience to our users? The cloud holds tremendous promise in helping BAT realize new benefits, and AWS will continue to be the cornerstone of our transformation.”