Case Study: Unilever Transitions to Private Cloud, Expects to Double in Size without Increasing IT Costs
Unilever has been hugely successful in selling personal care, homecare, and food products to billions of
customers throughout the world—so successful that it expects to double in size in 10 years. To ensure that its IT organization could support this growth, Unilever worked with Avanade to migrate from VMware to Hyper-V technology in Windows Server 2008 R2. It then used Hyper-V and Microsoft System Center 2012 to create a private cloud environment that contains 3,175 virtual machines. With its private cloud, Unilever will deliver IT services 40 percent faster and be more agile in the marketplace. It also expects to achieve its growth goals with no increase in IT costs. By eliminating hundreds of servers, Unilever realized significant savings and became a better environmental citizen. It is upgrading to Windows Server 2012 to gain even more IT efficiency.
On any given day, 2 billion people use Unilever products to look good, feel good, and get more out of life. Unilever is one of the world’s largest consumer goods companies, with more than 400 brands that include foods, soaps, shampoos, and household care products. Some of its well-known international brands include Lipton, Knorr, Dove, Lifebuoy, Hellmann’s, and Omo, alongside trusted local names such as Blue Band, Pureit, and Suave. Unilever was established in the 1890s, and today has 171,000 employees selling products in more than 190 countries.
Unilever has enjoyed significant growth in recent years, with more than half of its revenues coming from emerging markets. Management intends to capitalize on the company’s success in these markets and set an ambitious goal to double the company’s size in a decade.
Every business unit in the company has responded to the growth goal by fostering a culture of continuous improvement, driving for small changes every day to increase speed, improve quality, and reduce costs. The IT organization wanted to devise a way to support the company’s growth goal without doubling the company’s IT “footprint”—the cost of servers, data center power and cooling costs, and IT staff.
Actually, long before the company announced this growth goal, Mike Royle, Director of Enterprise Computing at Unilever, had made good progress toward trimming server counts and costs. In 2008, Unilever had more than 5,000 servers in its global data centers and in hundreds of remote locations. Royle and his team began virtualizing servers by using VMware ESX software and reduced its physical servers by 65 percent. However, VMware was too expensive to proceed with.
Meanwhile, Royle and Roland Meier, Strategy and Technology Director for Unilever, closely tracked the progress of Microsoft virtualization software, and in late 2009 engaged Avanade to create a proof of concept around migrating to the Hyper-V technology in the Windows Server 2008 R2 operating system. The business case for moving to Hyper-V focused on increasing data center consolidation, extending virtualization to remote office locations, and reducing management costs. “By migrating our VMware estate to Hyper-V, we estimated a six-figure operational cost savings from lower licensing and support costs, power and cooling savings from fewer physical servers, and IT management savings,” Meier says.
The proof of concept was a success, and between 2009 and 2011, Avanade used its Next Generation Datacenter model and Migration Factory methodology to migrate most Unilever VMware virtual machines to Hyper-V and converted hundreds of physical servers to Hyper-V virtual machines. In total, Avanade helped Unilever create 2,000 Hyper-V virtual machines.
“Avanade’s people are first rate; they tell it how it is,” says Royle. “They listened and responded to our requirements with a strong balance of ‘skin in the game’ and empathy.”
Even after reducing its physical server count by two-fifths, Unilever wanted to do more. IT costs were still higher than the company wanted and would only increase as the company grew. Additionally, while the IT staff had greatly reduced the time it took to deploy servers, there were still too many manual steps involved in reacting to business needs.
In developing markets, in particular, where the company’s growth was focused, the IT staff wanted to meet business demands for IT services more efficiently. “Doing business in emerging markets requires customized approaches, more solution diversity, and often shorter lead times,” Meier says. “Virtualization helped to increase IT efficiency and reduce costs, which are critical to sustainability. But we needed to accelerate overall service provisioning times, which required new system management tools and a revamping of our operational processes.”
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