Woolworths wants more cloud, less data centres

Woolworths predicts it will close its Sydney data centre within five years as its appetite for the cloud reduces its inventory of hardware assets.

The retail giant plans to move more of its systems onto cloud and hosted arrangements in the coming years following a successful switchover to Google Apps earlier this year, which saw 26,000 staff across the country migrate off Microsoft's productivity suite. 

Interim chief information officer Damon Rees — acting in the role since his former boss Dan Beecham’s recent departure — told the Finance and Investment forum in Sydney yesterday that Woolworths knew technology was going to become fundamentally more important to its business more than five years ago but had failed to accurately forecast the shape it would take.

Several years ago, Woolworths built a custom data centre in Erskine Park, Sydney, under the assumption that because the business would become more dependent on technology in the future — as would its customers — data centres would therefore become more strategic.

“[The Erskine Park data centre] is now sitting there about 60 percent of one-third full. So I think the first two points were spot on, and the third was not,” Rees said.

He said the business case around cloud had become increasingly compelling but the company still had a lot of money “tied up in an asset that is underutilised”. 

“We’ve got teams and security guards that need to protect that [data centre] asset, so cloud is already standing up for us on a case-by-case basis more often that not. And actually there’s a much bigger picture there we can unlock and work out how to remove or get our dependencies down to a certain level,” he said.

“We’ve seen the tide turn. In five years will we have that data centre? My gut says no.”

The move to Google Apps meant Woolworths was able to discard around 50 servers that had been scattered around many computer rooms and data centres across the country, used for its previous Exchange setup.

Once it made the decision to move to Google for mail, calendar and the majority of the Apps suite, other “dominos” fell. 

“The infrastructure to back up those servers goes, the destination we used to back up to goes, the mail gateway we used to have sitting between that and everything else goes, and you see just the flow of equipment slowly moving out of the data centre,” Rees said.

Woolworths also recently moved its HR software to the hosted SuccessFactors service.

It is also planning to move legacy applications onto a new Citrix platform so it will no longer depend on underlying operating systems, Rees said.

The Google-built, Unix-based Chrome operating system will become the new corporate compute standard.

Security risks

When questioned on the security implications of moving to an almost entirely hosted model, Rees said the move to Google had wiped out Woolworths’ biggest security exposure.

“With Google we absolutely reduced our risk profile for our organisation on so many levels. On a human level, their technology makes it very easy to do things in a secure way, therefore our people do things in more secure ways,” he said.

“When we tried to do this ourselves the service wasn’t as good, and people said, ‘Well, I’ll just put that data on my USB' and accidentally left it on the train. The data leaks out of the organisation because people work around the difficulties that are there. 

“Part of our take on it is our data is already in the cloud — because someone can’t access their email conveniently from wherever they want, they just email it to their Hotmail account and get it out of there,” he said.

“Because we haven’t got a universally accessible service like Google does, everyone sets up Dropbox accounts. So the data leaks out of the organisation anyway.

"Our view is that’s probably our biggest exposure and we dramatically closed that by moving to a service like Google.”