CIC completes 40% more IT projects a year using AWS
IT expenditure at Concepcion Industrial Corporation (CIC) was increasing faster than revenue growth. The costs of the servers, storage, and networking at the company’s on-premises data center were continually on the rise. “Not only that,” says Sean Byrne, the company’s CIO, “we also saw that our overheads for IT management were increasing too.”
Byrne considered moving the entire data center operation to a public cloud. He was aware of companies that had already migrated to public clouds, reducing their IT administration costs. He had even read of organizations with IT systems on public clouds providing more applications to more employees without any corresponding increase in IT spend
By using the AWS Cloud, IT is no longer seen as cumbersome but as a driver for future business expansion."
A Need for Innovation
For Byrne, however, a migration to a public cloud would be more than a cost-reduction exercise. He saw it as a way to transform the business. “With a cloud-based IT system, we could build a flexible infrastructure that would enable us to be more agile.” The business could deploy new applications in a matter of weeks versus three to six months, and at lower cost because it would no longer have to procure and install hardware. Without hardware costs, it would also become financially viable for CIC to build a large-scale computing environment for an Internet of Things (IoT) solution. Comments Byrne, “We wanted to develop smart products, such as smart air conditioners, and we needed an IoT infrastructure behind those products to process the data. The cost of an on-premises IoT infrastructure would have been prohibitive because of the need to buy racks and racks of servers.”
In Search of the Right Cloud Provider
CIC began an intensive six-month review of cloud-service providers including Microsoft Azure, Google, IBM, and Amazon Web Services (AWS). The CIC IT team set up accounts with all four providers and created test environments on each cloud to compare services and manageability. “The number of services that AWS offered easily outnumbered anything from the competition,” remembers Byrne. “We also found that the AWS Cloud was easier to use and the online documentation to help us get familiar with the AWS Cloud’s operations was the best.”
Why Amazon Web Services
A Successful Migration
The CIC IT team began migrating its IT system to the AWS Cloud during 2016 and had migrated all development environments to AWS by the end of that year. Core AWS Services that CIC uses include Amazon Elastic Compute Cloud (Amazon EC2), which runs all the company’s applications, with data relating to those applications contained in the Amazon Relational Database Service (Amazon RDS) for SQL Server. Data storage is provided by the Amazon Simple Storage Service (Amazon S3).
Moving to SAP HANA
In early 2018, CIC implemented SAP HANA on the AWS Cloud—realizing one of Byrne’s key goals for faster, less expensive deployments. SAP HANA is crucial to CIC’s financial, production, and supply chain operations across its consumer and commercial business. He explains, “We were moving from a legacy on-premises application for enterprise, resource, and planning. It no longer met the business need, and we wanted to move to SAP HANA. We wanted to run SAP HANA on the AWS Cloud because it would be more cost-effective than an on-premises version and quicker to deploy without the hardware. We were talking six to eight months maximum to deploy SAP HANA on the AWS Cloud, compared to almost a year and a half if we had done it on-premises.”
The CIC IT team did most of the SAP HANA deployment work internally. Byrne comments, “We used some third-party tools to extract, transform, and load the data from our legacy system to SAP HANA on the cloud. The only support we needed was from SAP.”
Building an IoT Future
With the SAP HANA project completed, CIC is now focused on enhancing its air conditioners and refrigerators with smart technology. As a first step, CIC planned to develop smart plugs, which could be fitted to new air conditioners and other appliances in the market.
Says Byrne, “We have around 2.5 million air conditioners in operation right now, and we’re selling hundreds of thousands every year. The initial question was which IoT service would be elastic enough and affordable enough to handle the data going back and forth from these plugs. We found that AWS IoT Platform could deliver what we needed through a combination of Amazon EC2, Amazon RDS, and AWS Lambda. AWS Lambda was crucial, giving us the capability to run our code specifically in response to events.”
Lower Costs, Greater Productivity
Today, Byrne assesses the impact of AWS across CIC’s entire operation in the following way: “We have reduced our overall IT costs between 30 and 50 percent since we moved to the AWS Cloud. We are now in a situation—like other companies using public-cloud services—where we are seeing business growth without any corresponding increase in IT spend.”
Not only has CIC broken its cycle of having IT costs rising equally with business growth, it has also improved on the delivery of IT services across the organization. “We have seen an increase of 40 percent in the number of IT projects that we can complete in a year because of the flexibility of the AWS Cloud. We have also been able to increase IT availability to 99.999 percent since our move to the AWS Cloud, giving our customers and strategic third parties more reliable IT services.”
The flexibility of the AWS Cloud and the cost-effectiveness of moving to a cloud model have enabled CIC to think about IT in a new way. “By using the AWS Cloud, IT is no longer seen as cumbersome but as a driver for future business expansion,” says Byrne, who is responsible for an organization within CIC called Cortex Technologies. “We provide technology R&D for the CIC organization. It represents a fundamental change in our thinking at CIC—recognizing that the commercialization of new technologies is where growth lies.”
Concepcion Industries is a Philippine maker of electrical appliances including air conditioning equipment and refrigerators.
AWS Services Used
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Amazon RDS for SQL Server
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