Home credit provider International Personal Finance (IPF) has embarked on a 12-month project to move its IT infrastructure into a private cloud which will cut costs by millions of pounds and make its planned expansion easier.
The credit provider is moving from using an infrastructure hosted by service provider Fujitsu to a cloud-based infrastructure from the same supplier.
IPF signed a £10m three-year contract with Fujitsu to provide its infrastructure in the cloud and charge on a pay-per-use model earlier this year, and the company is now four months into its first ever cloud project. It is confident that it will save millions of pounds on services and hardware over the three years.
Andrew Herd, head of IT commercial and service at IPF, said the company previously had its infrastructure hosted in a Fujitsu datacentre but wanted to cut ongoing service costs and make it easier and less expensive to increase capacity. Moving to a private cloud enabled this.
Under the previous hosted model IPF would pay for new hardware every few years or when more capacity was required. It would also pay a fixed service charge regardless of how much computing power it used. Moving to the cloud means it can pay for the resources it uses and no longer has to put money aside for new hardware. "We have realised a significant reduction in service charges and reduced the capital expenditure," said Herd, citing 20% to 25% immediate savings on the service charge. "If we want more storage, we pay per gigabyte. If we want more service, we buy per virtual machine."
The ability to scale up at low cost had to be an essential component of any agreement because IPF is embarking on an expansion strategy. The company currently has 2.3 million customers and employs more than 5,000 people, but is expanding internationally and growing its product offering.
Moving to the cloud
So the business case was clear, but what about the transformation to the cloud?
The first step in the cloud project was to select a supplier. According to Herd, this was not easy due to the immaturity of cloud offerings from suppliers.
The company put out a request for information (RFI) last year to 20 suppliers to establish where it could get the capability. Surprisingly few fitted the bill, said Herd. "Of the 20 suppliers we invited to provide information, fewer than 10 had enough evidence of a cloud service to move forward."
He said the company moved forward with a group of suppliers and requested more detailed information, including pricing, for very specific cloud services, such as a storage-in-the-cloud service.
But demonstrating the lack of maturity in the cloud sector, there were vast differences between the pricing offered by the suppliers.
In the end, IPF selected Fujitsu, which it already had an established relationship with. IPF has a relationship with Fujitsu going back nine years - Fujitsu provided support to 150 staff in Leeds when IPF demerged from Provident in 2007.
IPF set itself 12 months to migrate its systems from the hosted model in Fujitsu datacentres to a fully-fledged private cloud. The project was split over five milestones, with each milestone connected to a payment to Fujitsu. This, Herd said, ensured that both the supplier and IPF would stringently monitor progress.
The five milestones
There are six internal members of the IPF IT team working on the project and up to 15 from suppliers.
IPF's journey is clear evidence of what cloud computing can offer businesses, but the decision-making process is still complicated as a result of a plethora of service options that are not tried and tested. IPF designed project processes to overcome any potential problems in its project planning.
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This was first published in September 2011