RedBalloon rises towards Amazon's cloud

Big business infrastructure, small business costs.

Over the past decade RedBalloon has grown into a $50 million per year “experiential rewards” powerhouse. A year ago, however, the company realised it would not hit its goal of $100 million turnover per year by 2015 with its existing technology infrastructure.

“Our systems were getting antiquated,” said Paul Keen, general manager of development and technology at RedBalloon. “We had 17 servers, and we needed 150.”

The issue the company faced when embarking on its technology transformation was a simple one: buying, commissioning and maintaining 150 servers was beyond its financial capability. And so Keen made a strategic decision to move to the cloud.

“We want big business capabilities on a small business budget,” Keen noted. After appraising the cloud offerings on the market, RedBalloon decided to go with Amazon Web Services (AWS).

“We had three main criteria,” he continued. “Those were cost, technical competency and support.” AWS, as it turns out, hit all three targets. Significantly, RedBalloon’s costs have declined by 40 percent since it implemented AWS.

“Cost-wise, Amazon is the best,” he said. “They have committed to reducing cost every year, and in the twelve months we have been with them, they have had four price reductions.”

At the moment RedBalloon is hosted in one of AWS’ Northern California data centres, but by early next year the company plans to have its operations moved to a local AWS data centre.

“Even with the “Australia tax” having local hosting is going to reduce our costs by a further 15 percent,” commented Keen.

Moving to the cloud has also allowed RedBalloon to get closer to having a single view of the customer.

This is trickier than it sounds, said Keen, because customers approach the company from a number of paths.

“There are people browsing the site, people offering ratings reviews, and then there is the customer support system,” he said.

“We’re about 80 percent of the way there in terms of having a single view of the customer.”

All of this means the company is dealing with a decent-sized volume of unstructured data. What it doesn’t mean is RedBalloon is going to embrace any of the fashionable big data analytics tools such as Hadoop any time soon.

“Hadoop is when you’re dealing with terabytes of data, and we’re not,” said Keen. “We are collecting a couple of gigabytes per day.

“The whole thing about big data,” he continued, “is not the amount of data you collect, but how much revenue you can extract from that data.”

Paul Keen is a nominee in the iTnews Benchmark Awards.