Tesco signs £65m datacentre deal to drive online expansion

Tesco expects to cut several millions each year from its IT bill following a 15-year £65m datacentre deal with Sentrum

Supermarket chain Tesco is investing £65m in a state-of-the-art datacentre as it gears up to expand its web operations outside the UK.

The retailer has signed a 15-year contract with datacentre operator Sentrum, to host the equipment that will power its fast-growing dot com and banking business.

The datacentre is the first stage in a five-year project by Tesco to rationalise its existing estate of 21 datacentres worldwide. Within three years, the move is expected to save the retailer millions of pounds per year in energy costs and management fees.

“This is a major building block in our ability to deliver technology to our customers and colleagues, and to expand our dot com and banking business," Tomas Kadlec, Tesco IT director for infrastructure and operations, told Computer Weekly.

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Datacentre to deliver cloud-based IT services

The retailer plans to use the new datacentre, based in Watford, to provide cloud-based IT services to support the growth of its online and banking business in retail outlets in the US and central and Eastern Europe.

Sentrum will host the infrastructure for the Tesco.com website and the group’s management information systems and food replenishment systems, with more infrastructure to be added over time.

The high-efficiency datacentre, which uses advanced cold aisle cooling, will cost between 25% and 50% less to run than Tesco’s existing datacentres.

It will provide the retailer with the flexible capacity to meet the needs of the business over the next 10 years, said Kadlec.

Options for future expansion

Under the deal, Tesco has the ability to expand its IT estate from 1.2MW to 6MW of equipment power, and from 5,000 to 30,000 square feet, but will only pay for the resources it uses.

“Nobody was able to match the deal,” said Jeptha Allen, programme manager for Tesco. “The flexibility we have here, both in taking space and power, was what really appealed to us.”

The new datacentre will allow Tesco to improve the resilience of the infrastructure behind its online retail and banking business.

Tesco will back up critical data between Sentrum and its second primary datacentre in Letchworth, allowing it to keep key IT systems running and maintain them around the clock.

“Most critical systems already had redundancy built in, but not all systems, not to the level that we wanted,” said Kadlec.

“We are a retail bank. We are a dot com business. A scheduled maintenance window on a Sunday afternoon on the mainframe was fairly regular in the past. It cannot operate that way in the future,” he said.

Tesco Sentrum datacentre


  • 5,000 square feet, expandable to 30,000 square feet


  • 1.2MW, expandable to 6MW

Efficiency and cooling

  • Tier 3 rated
  • 1.2 PUE, compared with 1.6 PUE to 2 PUE for older Tesco datacentres
  • Cold aisle cooling

IT infrastructure

  • 350KW of Teradata racks, running the group reporting system
  • 1,000 server blades, 85% virtualised, running the dot com infrastructure
  • Bank infrastructure runs on Intel and IBM AS400 servers, running AIX and Open VMS
  • IBM 2196 mainframe, running Tesco’s food replenishment system, due to be installed
  • 6PB of disk storage

Datacentre strategy rethink

The contract represents a change in strategy for Tesco, which has, until now, preferred to build and manage its own datacentres.

“It was a major cultural change. It required sign-off from our board because historically we are known not only as a good retailer but as a good property developer,” said Kadlec.

Tesco plans to merge its estate of five UK datacentres to two main centres, and is evaluating how best to rationalise its 16 overseas datacentres.

There will be a need for regional datacentres in some countries to meet data protection and compliance legislation, said Kadlec.

The project follows a review by Deloitte, which conducted a site-by-site survey of Tesco's existing datacentres in 2010, and has advised the retailer on the datacentre procurement process.

John Winstanley, partner at Deloitte, told Computer Weekly that Tesco secured a highly competitive price for the new datacentre.

“We have been looking at some of the datacentre space in Asia, and we could not get anywhere near the price. In the UK it is a very good price,” he said.

Choosing a datacentre partner

Tesco awarded the contract to Sentrum in March 2012, after evaluating 22 suppliers and shortlisting eight. The datacentre went live in July.

Franek Sodzawiczny, founder and chief development officer of Sentrum, told Computer Weekly the Tesco deal is unusual in the UK because of its scale.

In-depth: Tesco's datacentre plan

Download an 8-page, in-depth version of this case study, explaining in detail how Tesco is investing £65m in a state-of-the-art datacentre as it gears up to expand its web operations outside the UK.

“It is a huge area Tesco is taking. Overall, it is taking 30,000 square feet, and its IT load will be around 5MW. That is a huge amount of computing power,” he said.

Under the contract, Sentrum will provide the datacentre building and services. Tesco provides its own equipment and has a contract with Hewlett-Packard to manage the hardware across its estate.


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