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Empresas Hites S.A.

Hites is one of the top five retailers in Chile, with dozens of stores and a significant online presence. Founded in 1940 and headquartered in Santiago, the company sells a wide range of apparel, home furnishings, personal technology, home appliances and toiletries to a nationwide customer base.

Business Challenge

As Hites grew, the cost of its on-premises IT infrastructure was becoming prohibitive. They lacked flexibility in provisioning new systems and in expanding existing environments. Even a simple change, such as adding more memory to a server, would potentially involve weeks of working through procurement, installation, and configuration processes.

Most importantly, inflexible infrastructure inhibited the product development team in quickly prototyping, building, testing, and improving customer-facing applications.

From the strategic perspective, this lack of flexibility was making it difficult for Hites to sharpen its competitive edge and support the ongoing personalization of the customer experience.

Walter Adorno, Technology, Operation and Platform manager at Hites, comments: “We wanted to optimize our monthly spend and update our underlying technology to make it easier to adapt to future needs.”

Transformation

The answer to the flexibility challenge was to migrate the relevant parts of the infrastructure to the public cloud. This would empower Hites to provision additional CPU, memory, storage, and network resources almost instantaneously, and deprovision them quickly when no longer required, while paying only for the resources used.

Hites’ move towards the cloud started before COVID-19 hit Chile—but the pandemic raised the stakes significantly. They needed to accelerate its cloud rollout so that it could rapidly scale up capacity and minimize the risk of outages during a period where more and more people began shopping online.

Results

55 VMware virtual machines migrated to Google Cloud

55% reduction in the number of on-premises servers

27% in estimated annual cost savings

Consistent 10/10 Net Promoter Score for the joint solution

Solution

Hites’ outdated infrastructure and software represented a significant obstacle in the migration plan. The ideal approach would have been to move the applications into a platform-as-a-service environment on the public cloud. However, given that the applications were several versions behind the oldest versions supported by cloud providers, this would have been a counter-productively expensive, complex, time-consuming project. First, Hites would have needed to buy and install new physical servers and upgrade its operating systems. Then, they would have needed to update all software versions to bring them in line with the target environments on the public cloud.

“We had selected Kyndryl to help us with our original migration plan,” Walter Adorno says. “However, further analysis revealed that it would be difficult to complete the project in a timely manner. We looked at alternative approaches, and here’s where the availability and delivery speed of both Kyndryl and Google were fundamental to our success. The teams worked well together, especially given that the new implementation strategy was planned within a short timescale.”

After evaluating the technical and business requirements, Kyndryl proposed to take the virtual machines (VMs) that were running in Hites’ existing private cloud and move them in their entirety to a dedicated VMware Software-Defined Data Center environment in a public cloud.

The Kyndryl team, in direct coordination with Google specialists, enabled the development of a cloud environment able to receive workloads at high speed and with a minimum of modifications, thus facilitating the migration process and reducing risk and downtime drastically.

Google Cloud was the only provider who could accommodate this solution. By moving the existing VMs to Google Cloud as-is, the solution eliminated the need for costly and time-consuming upgrades. By adopting this special lift and shift approach, Kyndryl gave Hites the immediate flexibility and cost benefits of the public cloud, as well as deferring the need to upgrade and modernize the applications themselves.

Low-risk phased migration

Kyndryl started by establishing a secure VPN connection between the retailer’s on-premises private cloud and Google Cloud, then conducted a detailed exercise of discovery and assessment of the existing servers. Based on this analysis, Kyndryl worked with Hites to determine the optimal migration plan to meet its business priorities.

The team used the StratoZone service from Google to perform the sizing analysis for the source and target environments, to identify application and server dependencies, to highlight affinities between workloads, and to capture all the resources that would need to be migrated.

Kyndryl then used VMware HCX to perform the migration of the existing VMs from the on-premises servers to bare metal servers on Google Cloud.

Kyndryl’s end-to-end program management enabled Hites to migrate fast and seamlessly within existing maintenance windows, avoiding interruptions in service.

Walter confirms that: “Our cloud migration approach allowed us to complete 90% of the platform migration in just two weeks. The selected approach enabled us to focus on the workloads that required special migration conditions, so that we were able to complete the activity in a fraction of the time originally expected.”

The production VMs now running on Google Cloud support applications including logistics, human resources, staff scheduling, inventory management, point-of-sales systems, and business intelligence tools.

Hites’ Google Cloud environment is dynamic: they can quickly and easily move VMs in and out of the public cloud. This flexibility has already proven useful since the initial migration, with Hites deciding to move several VMs back to its private cloud temporarily to consolidate software licenses.

Lower costs and enhanced flexibility

Kyndryl used cloud-native tools combined with its own proven methodology to ensure the rapid, low-risk migration of a complex production workload to Google Cloud. The initial goal was to migrate 47 out of 100 on-premises VMs; the team beat this goal by migrating 55 VMs.

By replacing physical on-premises servers with virtual servers on Google Cloud, Kyndryl was able to reduce infrastructure costs for Hites by an estimated 27%, freeing up budget for ongoing modernization and transformation projects. In the future, Hites plans to containerize its software landscape and manage it using Kubernetes. They also plan to consolidate its large Oracle landscape, which currently continues to run in the on-premises private cloud for cost and latency reasons.

Beyond the significant cost savings, the key benefit of the migration is the added flexibility Google Cloud resources bring. Recently, the organization temporarily required a machine with 1 TB of memory for testing purposes and was able to get it up and running in just one hour. In the on-premises environment, this would have taken much longer, and would have required permanent investment in new capacity.

The Kyndryl Multi Cloud Management Services (MCMS) team in Argentina supports the VMware environment for Hites. Regular internal surveys show Hites’ consistent 10/10 Net Promoter Score (NPS) for the Kyndryl solution, including Google Cloud Platform.

With its initial cloud migration successfully accomplished, Hites now has time and breathing space to focus on its longer-term transformation projects. As Walter Adorno concludes: “The ability of Kyndryl and Google to adapt to the challenges that emerged during the migration project enabled us to meet our objectives with minimal impact on operations. The new environment on GCP provides a solid foundation on which we can continue to make technological advances.”

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