Why does retail and goods delivery business move to IaaS: case review
The e-commerce sector is growing worldwide. This is reflected in related areas. For example, on the delivery of goods. The introduction of IT technologies has already changed the work of courier services and other delivery services. In this article we will talk about the role that IaaS plays here.
/ photo Vetatur Fumare CC
Holidays and seasonal sales - not only the opportunity to earn for retailers and couriers, but also to test the strength of its infrastructure.
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Large courier services, such as UPS, seem to have learned to cope with the seasonal influx of orders and to profit from it. The number of orders delivered on recent New Year holidays increased by 7%, and with it the company's revenue. However, last year, UPS, which serves the largest retailers in the United States, had delivery problems . Sales a year earlier were a record, and logistics networks did not withstand such an influx. As a result, orders were delivered with delays.
A similar situation occurred in Singapore after the Bachelor Day last November. Roadbull courier service was unable to deliver the parcel on time due to a record number of orders - the company needed to process 70% more parcels compared to off-peak periods.
/ photo by Mike McCune CC
The sharp jump in consumer demand reveals not only the unwillingness to physically serve orders, but also technological problems. In 2016, several large retailers - QVC, Walmart and Newegg among them were unprepared for the traditional cyber Monday. Their infrastructure could not withstand the influx of customer requests. This happens from year to year. In 2017, following the results of sales due to technical problems, retailers, and therefore delivery services, lost 13% of potential orders. Sites Macy's and Lowe in the midst of sales were not available.
In 2015, Flipkart - a major Indian retailer - was preparing for its traditional seasonal sale. The year before, its infrastructure had malfunctioned , and thousands of customers remained unhappy. To avoid mistakes, Flipkart installed new equipment, but the site was still unavailable on the day of the promotion. The number of visitors turned out to be more than the company expected.
Preparing your own equipment for both retailers and delivery services is not easy, as well as predicting the exact amount of traffic during peak periods. Do not forget that the "influx" are not only seasonal, but also sudden .
What needs to be done at the time of peak load is an increase in capacity . The expansion of physical infrastructure is difficult to accomplish in minutes. It takes money and time. In addition, after the end of the sales season, there is a question of overcapacity - you need to decide how to pay for the content of unused servers before the next promotions.
The cloud helps to dynamically scale capacity in accordance with the load on the server. For example, in the pre-New Year period, the load on the infrastructure of the Dostavista courier service is multiplying . IaaS at the same time ensures the stable operation of the service due to the rapid increase of resources. In this sense, the company uses an approach similar to its courier model - at the time of increased demand, it increases the number of working couriers. In Dostavista, almost all databases were transferred to the cloud, as well as services for processing and storing information.
Another example of cloud usage is the 7-Eleven retail operator delivery service. In 2015, during a major sale, the service encountered difficulties in delivering packages due to the outdated system of accounting for goods and logistical problems. Shops 7-Eleven "flunked" orders, delivery was late, and customers resented. At that time, the company did not have the necessary IT infrastructure to process orders.
Solved the problem with a combination of cloud and mobile applications. Previously, 7-Eleven used Excel spreadsheets to track products. Now, each branch uses a mobile app to mark the arrival and dispatch of goods. This data is sent to the cloud system in real time, which allows the service to track the number of packages in each store and optimize work at the system level.
IaaS allows you to automatically scale services to process orders at peak loads. Using this model helps the company send 1,000 orders to 370 7-Eleven offices daily, which is 300% more than without using a cloud. Due to the scalability, the delivery service has already managed the main sales of 2016 and 2017.
One of the reasons for the delays and loss of goods is the problem of the “ last mile ”, that is, the final stage of delivery. The closer the courier service to the recipient is physically, the easier it is to avoid losses and delays. Expanding the IT infrastructure of the delivery service to new regions is not so easy - you need to buy more equipment, place it and provide support. IaaS solves this problem through simplified migration .
Here you can return to flight 7-Eleven. At its disposal were warehouses - the physical points of the network of stores. Cloud allowed to add IT infrastructure to each of them without additional costs, as well as to introduce necessary services in each one - for example, centralized inventory accounting.
Another way to get closer to the recipient - postamata. In Russia, the pioneer of this market is the company PickPoint. Over several years, the number of automated terminals has grown from zero to 2,800.
At the initial stage, PickPoint worked with its own hardware, but its capabilities were not enough for the needs of the business: the servers needed to be constantly updated and adjusted to load jumps. Then in PickPoint decided to transfer part of the IT infrastructure to the cloud. Today, all terminals are connected to application servers, where the main processes take place - from request processing to issuing permission.
At a certain stage, the company was faced with difficulty: the PickPoint office is located in Moscow, and the base and application servers for postamats are located in St. Petersburg. The organization needed a wider channel from the head office to the cloud data center. The most economical solution was the migration of the infrastructure of postamats to the Moscow IT-GRAD data center.
For the transfer, we used backup copies and a tool for organizing a hybrid cloud and automated transfer of virtual machines between different data centers and clouds - vCloudConnector . On average, it took about an hour to migrate one virtual machine to 100 GB - migrated not only the infrastructure, but also office services, so it was possible to correctly maintain only the alternate server migration.
/ photo PickPoint CC
There is another case with the international network of restaurants Vapiano. Initially, she relied on her own servers at headquarters, but as she expanded, she turned to a hybrid cloud model. The fact is that the cost of storing data has grown, and the limited resources have hampered the introduction of new solutions. The company has plans to create mobile applications for ordering and payment systems with special cards in the institution, and the power of IaaS infrastructure has become a good basis for the implementation of these ideas.
The most resource-intensive workloads of Vapiano, including corporate data storage, sites located on four virtual machines, were transferred to the cloud platform.
Through migration, the company's computing environment has become more flexible, reliable, and scalable. In addition, thanks to the provider's policy, the company manages to comply with the law on personal data in new markets. Jeroen Timmer, director of international information technology and process management at Vapiano, says that migration helped "reduce the amount of routine administration and focus on opening restaurants and providing guests with an excellent experience", as well as "avoiding the need to manage infrastructure."
Another example of a rapidly expanding business is the delivery service of dishes from the restaurants of the Delivery Club restaurants. It has been growing since 2009, and at some point management has decided to diversify the IT infrastructure. As the company's IT director Yevgeny Salnikov told, this decision prompted the service to turn to the IaaS model. Already in 2015, the entire Delivery Club system was located on the IT Grad cloud platform.
This allowed expanding into new regions, opening new establishments, without worrying about whether the application could withstand traffic growth. In 2016, Mail.ru Group acquired the Delivery Club, and the task was to transfer the entire infrastructure of the service to the corporate cloud platform. This did not become a problem - tools for migration between the clouds were used here.
Let's sum up. Goods delivery services actively use IaaS and other cloud models. This allows them to allocate resources, save on physical infrastructure, respond to seasonal influx of orders, expand geographically and increase internal services to improve customer experience.
PS Several materials on the topic from the First Corporate IaaS Blog:
/ photo Vetatur Fumare CC
Ready for increased demand
Holidays and seasonal sales - not only the opportunity to earn for retailers and couriers, but also to test the strength of its infrastructure.
')
Large courier services, such as UPS, seem to have learned to cope with the seasonal influx of orders and to profit from it. The number of orders delivered on recent New Year holidays increased by 7%, and with it the company's revenue. However, last year, UPS, which serves the largest retailers in the United States, had delivery problems . Sales a year earlier were a record, and logistics networks did not withstand such an influx. As a result, orders were delivered with delays.
A similar situation occurred in Singapore after the Bachelor Day last November. Roadbull courier service was unable to deliver the parcel on time due to a record number of orders - the company needed to process 70% more parcels compared to off-peak periods.
/ photo by Mike McCune CC
The sharp jump in consumer demand reveals not only the unwillingness to physically serve orders, but also technological problems. In 2016, several large retailers - QVC, Walmart and Newegg among them were unprepared for the traditional cyber Monday. Their infrastructure could not withstand the influx of customer requests. This happens from year to year. In 2017, following the results of sales due to technical problems, retailers, and therefore delivery services, lost 13% of potential orders. Sites Macy's and Lowe in the midst of sales were not available.
In 2015, Flipkart - a major Indian retailer - was preparing for its traditional seasonal sale. The year before, its infrastructure had malfunctioned , and thousands of customers remained unhappy. To avoid mistakes, Flipkart installed new equipment, but the site was still unavailable on the day of the promotion. The number of visitors turned out to be more than the company expected.
Preparing your own equipment for both retailers and delivery services is not easy, as well as predicting the exact amount of traffic during peak periods. Do not forget that the "influx" are not only seasonal, but also sudden .
What needs to be done at the time of peak load is an increase in capacity . The expansion of physical infrastructure is difficult to accomplish in minutes. It takes money and time. In addition, after the end of the sales season, there is a question of overcapacity - you need to decide how to pay for the content of unused servers before the next promotions.
The cloud helps to dynamically scale capacity in accordance with the load on the server. For example, in the pre-New Year period, the load on the infrastructure of the Dostavista courier service is multiplying . IaaS at the same time ensures the stable operation of the service due to the rapid increase of resources. In this sense, the company uses an approach similar to its courier model - at the time of increased demand, it increases the number of working couriers. In Dostavista, almost all databases were transferred to the cloud, as well as services for processing and storing information.
Another example of cloud usage is the 7-Eleven retail operator delivery service. In 2015, during a major sale, the service encountered difficulties in delivering packages due to the outdated system of accounting for goods and logistical problems. Shops 7-Eleven "flunked" orders, delivery was late, and customers resented. At that time, the company did not have the necessary IT infrastructure to process orders.
Solved the problem with a combination of cloud and mobile applications. Previously, 7-Eleven used Excel spreadsheets to track products. Now, each branch uses a mobile app to mark the arrival and dispatch of goods. This data is sent to the cloud system in real time, which allows the service to track the number of packages in each store and optimize work at the system level.
IaaS allows you to automatically scale services to process orders at peak loads. Using this model helps the company send 1,000 orders to 370 7-Eleven offices daily, which is 300% more than without using a cloud. Due to the scalability, the delivery service has already managed the main sales of 2016 and 2017.
Virtual business expansion
One of the reasons for the delays and loss of goods is the problem of the “ last mile ”, that is, the final stage of delivery. The closer the courier service to the recipient is physically, the easier it is to avoid losses and delays. Expanding the IT infrastructure of the delivery service to new regions is not so easy - you need to buy more equipment, place it and provide support. IaaS solves this problem through simplified migration .
Here you can return to flight 7-Eleven. At its disposal were warehouses - the physical points of the network of stores. Cloud allowed to add IT infrastructure to each of them without additional costs, as well as to introduce necessary services in each one - for example, centralized inventory accounting.
Another way to get closer to the recipient - postamata. In Russia, the pioneer of this market is the company PickPoint. Over several years, the number of automated terminals has grown from zero to 2,800.
At the initial stage, PickPoint worked with its own hardware, but its capabilities were not enough for the needs of the business: the servers needed to be constantly updated and adjusted to load jumps. Then in PickPoint decided to transfer part of the IT infrastructure to the cloud. Today, all terminals are connected to application servers, where the main processes take place - from request processing to issuing permission.
At a certain stage, the company was faced with difficulty: the PickPoint office is located in Moscow, and the base and application servers for postamats are located in St. Petersburg. The organization needed a wider channel from the head office to the cloud data center. The most economical solution was the migration of the infrastructure of postamats to the Moscow IT-GRAD data center.
For the transfer, we used backup copies and a tool for organizing a hybrid cloud and automated transfer of virtual machines between different data centers and clouds - vCloudConnector . On average, it took about an hour to migrate one virtual machine to 100 GB - migrated not only the infrastructure, but also office services, so it was possible to correctly maintain only the alternate server migration.
/ photo PickPoint CC
There is another case with the international network of restaurants Vapiano. Initially, she relied on her own servers at headquarters, but as she expanded, she turned to a hybrid cloud model. The fact is that the cost of storing data has grown, and the limited resources have hampered the introduction of new solutions. The company has plans to create mobile applications for ordering and payment systems with special cards in the institution, and the power of IaaS infrastructure has become a good basis for the implementation of these ideas.
The most resource-intensive workloads of Vapiano, including corporate data storage, sites located on four virtual machines, were transferred to the cloud platform.
Through migration, the company's computing environment has become more flexible, reliable, and scalable. In addition, thanks to the provider's policy, the company manages to comply with the law on personal data in new markets. Jeroen Timmer, director of international information technology and process management at Vapiano, says that migration helped "reduce the amount of routine administration and focus on opening restaurants and providing guests with an excellent experience", as well as "avoiding the need to manage infrastructure."
Another example of a rapidly expanding business is the delivery service of dishes from the restaurants of the Delivery Club restaurants. It has been growing since 2009, and at some point management has decided to diversify the IT infrastructure. As the company's IT director Yevgeny Salnikov told, this decision prompted the service to turn to the IaaS model. Already in 2015, the entire Delivery Club system was located on the IT Grad cloud platform.
This allowed expanding into new regions, opening new establishments, without worrying about whether the application could withstand traffic growth. In 2016, Mail.ru Group acquired the Delivery Club, and the task was to transfer the entire infrastructure of the service to the corporate cloud platform. This did not become a problem - tools for migration between the clouds were used here.
Let's sum up. Goods delivery services actively use IaaS and other cloud models. This allows them to allocate resources, save on physical infrastructure, respond to seasonal influx of orders, expand geographically and increase internal services to improve customer experience.
PS Several materials on the topic from the First Corporate IaaS Blog:
- How IaaS-clouds help in service development projects
- 9 useful tips for a smooth transition to the cloud
- First steps after renting cloud infrastructure
- IaaS in financial organizations: legal issues
- Best Practices for Migrating and Deploying IaaS Cloud Infrastructure
- Why a good IaaS provider should not have its own data center
- BIM goes to the cloud: key solutions for information modeling
Source: https://habr.com/ru/post/352398/
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