News Corp: Moving SAP ERP to Amazon cloud will save ‘tens of millions of dollars’

News Corp expects to save ‘tens of millions of dollars’ in on-premise infrastructure costs by moving its SAP ERP system to Amazon Web Service’s cloud.

The global media company - which is responsible for publications such as The Times and The Sun - is currently carrying out a major project to move its on-premise systems onto AWS’ infrastructure-as-a-service (IaaS) cloud, after adopting a ‘cloud first’ policy in 2011.

Having virtualised 90 percent of its server estate and placed numerous newly-built applications in to the public cloud, the firm has also targeted its larger enterprise applications, with plans in place to move its main SAP implementation out of its data centre.

“In December last year we started to prepare for moving our enterprise applications into the cloud,” News UK IT director Chris Birch told an audience of customers at AWS Summit in London on Tuesday. “We are talking about ERP systems, logisitics, distribution and manufacturing systems - this includes all the hardcore apps that were developed in-house or from third parties decades ago, which do not have the autoscaling of some of the systems built for the cloud."

The move has involved building a virtual private cloud (VPC) connection between News Corp’s infrastructure and Amazon’s data centre, dubbed DC3.

“We have two 10GB private circuits into Amazon’s data centre from our data centre, with our own enterprise security wrapper around that. That VPC allows us to migrate huge amounts of data,” he said.

He added that since setting up the connection, the company has moved its Times Online archive into Amazon Web Services, with 9TB of data moved across to AWS in March.

“We will be using the application search capability in AWS across that archive. This will cost us a couple of thousand dollars a year, whereas we previously had two racks of servers in two data centres to support it, with all of the replication and overheads required.

“The VPC is ultimately going to allow us to close down our data centres in London.”

According to Birch, a 10-year projection of savings versus keeping its SAP implementation on-premise shows that moving to the cloud could reap massive savings. This could be even higher with further price reductions made through continued price drops, and could reach “tens of millions of dollars with one single app” over the space of 10 years.

“That is compelling,” he said.

For example, Birch said the business had already benefited from the latest round of price drops, which shaved $30,000 (£17,840) off News Corp’s monthly AWS bill, reducing from $150,000 (£89,220) to $120,000 (£71,377) per month.

Birch has also been selected as part of a team to led the consolidation of 46 data centres worldwide across News Corp - containing roughly 13,000 servers and 6PB of data - eventually reducing down to six.

The cost associated with those data centres is thought be around $100 million a year - including, for example, maintenance charges, energy and rent costs - which could be reduced by greater reliance on Iaas resources.

“We will spend a portion of that on AWS, and the rest on new product development, reinvestment into the company, or give it back to stockholders,” he said.

Overall, the aim is to move 75 percent of the company’s physical infrastructure into the cloud over a three-year period.

This means moving a large number of the 3,200 applications used across the company, having finished a four-month application assessment in November. According to Birch, all of the applications will be moved to the cloud eventually, though some mainframe-based apps will take more time.

“Amazon will be the main provider for this, because they are so much more mature in the enterprise support wrapper than some of the other guys out in the marketplace. [However] we are keeping a keen eye on some of the competitors out there," he said.

News Corp started using AWS back in 2009. The company began using Elastic Compute Cloud (EC2), but has since implemented a number of other services such as Simple Storage Service (S3) RDS database and Amazon’s Hadoop offering, Elastic MapReduce.

It has also selected Amazon’s DynamoDB to control access to content across its 'paywalled' publications such as the Times, as the publisher group uses cloud systems to modernise its multimedia business.

Copyright © 2014 IDG Communications, Inc.

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