Okay, let’s face it. I know at least one Enterprise organization that has migrated their traditional infrastructure to one based on Cloud Computing. That would be The North Pole. Their CEO is none other than Santa Claus (Saint Nicolas, Kris Kringle & Father Christmas are some of the other aliases he goes by). He runs an incredibly efficient organization with Mrs. Claus as CFO and the Head Elf as CIO. They have a very predictable business cycle, which includes global, year-round information gathering and management that catalogs the “naughty” and “nice” people world-wide coupled with a robust transportation and distribution system active only one day annually. How is this all accomplished so efficiently year after year?
I recently spent some time with Santa and had the opportunity to ask him a few questions about his organization. Below is a transcript of our discussion:
Me: Hello Mr. Claus.
Santa: Ho ho, please call me Kris.
Me: Ok Kris. Thanks for spending some time with me today and granting me some insight into your traditionally “closed” organization.
Santa: But of course. Transparency seems to be quite important nowadays. Obviously I can’t disclose all of my secrets; that would take away my magic!
Me: Ok, I understand. So let’s dig into this. For me, and many other technologists out there, your IT infrastructure must be amazing! Can you give me some insight into how you accomplish what you do?
Santa: Sure. So let’s take a look first at how things were done previously. Long before computers and servers were mainstream within our organization, we relied heavily on word-of-mouth and traditional delivery methods. It was a very decentralized environment. For example, children around the world wrote letters that were delivered via “snail-mail” to our corporate headquarters. Letters were read, manually sorted, categorized and audited against the NoN (Naughty or Nice) list. During the holiday season, we were forced to hire many temp workers and managers to oversee the process. Prior to that, we had a distributed workforce around the world essentially spying on children to ensure their compliance and meeting our strict NoN requirements. As the data was manually tabulated, it was physically transported back to Corporate. The holiday season represented a manual merging of the two data sets: letters from children and the NoN audits.
Me: Well, that certainly sounds complex, time intensive and very inefficient! What made you decide to re-engineer your business processes?
Santa: Yes, it WAS very intensive. My beard and hair aren’t just white from old age alone! Ho ho ho. Well, as the world population grew and became a bit more complicated, we realized that we could not scale efficiently using manual methods. It simply wasn’t working. Believe it or not, we did have several mid-year strikes and walk-outs by the elves. It was not a pretty scene. Luckily we employed an incentive-based strategy and coupled that with a complete implementation of an IT infrastructure. I quickly became the unofficial CTO of the organization. Here’s a little secret that I will probably get in trouble for saying: You know all of those children who asked for computers for Christmas and never got them? Well, they were produced by us but we opted to exercise eminent domain and requisitioned them for our own infrastructure. Those children that were affected all received the second item on their list, however.
Me: So, you essentially set up a large server farm using those bare-metal servers. What did that do for you?
Santa: That’s right. It was a difficult decision to make, especially with how we undertook the acquisition process. Ultimately though, it was a wise choice. The next challenge that we had was in the conversion from a manual process to one that was much more automated. We considered outsourcing for this, but the concerns around security and privacy made us keep all of our hosting in-house. We changed many of our manual processes to incorporate much more automated and integrated ones. We opted to keep our remote workforce for the NoN list as our field offices needed to have first-hand insight into how children were acting. The transmission method was changed as we started using a CRM solution to manage this, so, no more hard-copies of field reports. All updates were handled through our CRM software.
Me: Interesting. If I may ask, who did you choose for your CRM?
Santa: Sorry, I’m under a non-disclosure agreement with that. We need to ensure that all of our operations remain as concealed as possible. But I can tell you that it was web-based which enabled our field-offices and remote branches to be much more mobile. In fact, our accuracy and efficiency showed dramatic increases and our operating expenses, specific to our shipping and receiving, dropped. We were still, however, receiving physical letters that needed to be reviewed. For this, we opted for some OCR and cataloging software to increase efficiency. Thus, when it came to the actual data crunching at the end of the year, we were better able to link the NoN database with the Gift Requests database, which resulted in a huge time and cost savings and other unforeseen efficiencies on our part.
Me: Wow, that sounds like a great success story!
Santa: Yes, but it goes on. With success comes failure as well. We found a number of issues after a few years running “digitally.” For one, we just couldn’t scale quickly enough. Also, our energy consumption was much higher than anticipated. We noticed that much of the polar ice cap around our datacenter was starting to melt and that the average temperature around the facility had risen a few degrees which was definitely concerning. We never stopped adding servers and it wasn’t fair to keep acquiring all of those servers from tech-inspired children. Our CapEx was really starting to grow almost exponentially. We only utilized our equipment to capacity toward the end of the year and then, after that, our utilization dropped dramatically. This wasn’t ideal. AND, Mrs. Claus was saying that our margins were shrinking dramatically. We obviously didn’t want to reduce the quality of the toys we produced so a year ago, we undertook yet another strategic technology change.
Me: Oh? And what was that?
Santa: We started migrating our business over to Cloud Computing and what a difference that made! First, we were lucky enough to be allowed in on a private beta of a Cloud Computing Infrastructure provider. What an amazing technology! Not only were we able to deploy a complete, load-balanced scalable infrastructure, but we were also able to control our costs dramatically. I even worked with Rudolf to develop an interface to the Cloud provider’s API. This interface monitored the influx of NoN reports, the number of days until Christmas and Gift Request volume and it programmatically provisioned new servers ahead of the anticipated demand. It even automatically scales back after the holiday season.
Me: Sounds simply like the ideal solution. Can you tell me more about it and who they are?
Santa: Again, I’m under an NDA, as well as part of another private partner program which gives me some enhanced functionality. But let me tell you this, they offer Windows Server 2003/2008, Linux, free Load Balancing, Cloud Storage, a web GUI, and free support and inbound bandwidth. The free inbound bandwidth is particularly nice since we have our entire field offices transmitting data regularly inbound to corporate.
Me: Hmm. That provider sounds REALLY familiar!
Santa: Ho ho ho. Let me tell you. Just being able to dynamically scale and only be billed for what I use is fantastic, and their Cloud Storage is perfect for all of those scanned letters. When it comes to the December analysis, we just spin up a series of Database servers and do the data crunching. It used to take us weeks to do the same amount of work which we can now do in a mater of days. Not only that, our carbon footprint has been dramatically reduced. In this particular instance, outsourcing made the most sense to us. Many Clouds are built using some sort of virtualization or hypervisor technology which means that one larger server takes the place of multiple older ones. Power consumption is reduced (we used to have hundreds of unused servers sitting around doing nothing during the off season). Our actual RAM/CPU/Drive utilization on those older bare-metal servers was around 10-15%. Now we have amazing efficiencies using the Cloud. I must say, Mrs. Claus is very happy…she even gives me extra cookies…her cookie budget has increased due to the reduction of our CapEx.
Me: Well it seems like you have come a long way. Congratulations! What do you plan on doing with your new free time and money savings?
Santa: I plan on buying a nice little bungalow on a very sunny island and take Mrs. Claus there for some rest and relaxation. Oh, but it must have internet access…the nice thing about my Cloud Computing solution is that I can control my infrastructure from anywhere via a web browser.
Me: Wow, that’s great. Lucky her! Any last remarks you want to make?
Santa: Just one, all of you non-Cloud-enabled companies and Enterprises out there, I’m setting a “naughty” flag next to your entry. You have no excuse! Take it from me, the CEO of the most efficient and on-time Enterprise on the planet. The Cloud is the way to go!
So there you have it, straight from the mouth of the jolly, white-bearded CEO of The North Pole Corp. Need I say more? Happy Holidays from us at GoGrid!
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