FeaturesOutsourcingStrategy

Malaysian retail and wholesale giant, Mydin Mohamed Holdings Berhad, has found the agility and speed it needs in cloud computing to propel its rapidly growing business.

The company operates 100 stores nationwide -- including 10 hypermarkets, 18 emporiums, three bazaars, 54 mini markets, nine convenient stores and six franchise outlets -- and it is eyeing US$840 million (RM2.6 billion) in sales for its current financial year ending March 31 next year. By end of 2013, it will have opened 8 more hypermarkets with investments totaling some RM850 million.

Last August, the company took just two and a half weeks to deploy a cloud-based point of sale (POS) solution across 25 stores, and that included time spent waiting for stores to open. Similar projects would have taken between 3 and 6 months in the past.

"Our mini market model is entirely based on cloud-based point of sale," said Malik Murad Ali, IT director of Mydin Mohamed Holdings Berhad, in a GoToMeeting web conference. "The POS is mission critical for us because if the system goes down, it will affect our business and customers directly."

The POS feature is part of a retail solution from home-grown company Xilnex that offers customer and service management, inventory control, services tracking and integrated marketing tools. These are streamed over to clients and function as locally installed applications so they continue to work if the Internet or network is disconnected. Application data is synchronized automatically once the system reconnects to the network.

"The most important factor is that it is affordable and easy to deploy and use," said Malik. "As long as you are connected to the Internet, we can complete the set-up within an hour. We then spend the next 2 hours training the staff on the solution."

Such successes have persuaded Malik that "cloud technology is the way forward for our company. Today, whenever we look at any solution, application or product, the first question asked is whether it has a cloud strategy or platform."

Since the POS project, the company has sought various ways to consume applications from the cloud, including URL filtering, anti-spam and email security solutions. "We are now evaluating cloud-based office productivity solutions, either Office 365 or even Google Apps," Malik said. "In addition, many of our meetings today, including meetings with our vendors, are conducted via [conference tools like] GoToMeeting. We are training our internal organization and encouraging the adoption of web conferencing as the way of meeting."

Mydin began virtualizing its IT systems in 2009. At that time, the complex software licensing structure of virtualized applications was a challenge. "Microsoft were very difficult and they themselves were not clear about the licensing requirements," said Malik. "Today, vendors have much better licensing strategies. We are [one of the] largest users of Microsoft Dynamics AX in Asia Pacific."

In the years ahead, Malik expects more applications to be moved to the cloud to facilitate anytime, anywhere access from any device. "Of course, there are challenges like security, which we are addressing," He said. "Our approach is to authenticate who the user is, regardless of where he or she accesses our systems from. Two-factor authentication comes into play here."

On the infrastructure front, Malik's team have had to procure and set up physical hardware fast enough to meet changes in business demands. The answer to this challenge lies beyond the company's on-premise virtualized environment. "We are working on a virtual data center," Malik said. "If we need more computing resources, we can leverage on providers like Rackspace, Amazon or Windows Azure to extend our data center capacity, using Citrix CloudBridge [to connect our data center to external cloud and hosting environments]."

"We hope to get something up by end of August," Malik added. "We will burst to the cloud for not so mission-critical application development and testing. We don't want to spend on servers, cooling and power for this. The second thing is that we don't want [all traffic] to come directly to our network. We want to get only clean traffic in. I can't even remember the last time we see spam on our internal email system."

Clearly, Mydin's confidence in consuming cloud services stems from a mature understanding of how the cloud can work for its business. For a company that has tasted the tangible benefits of cloud computing, IT's alignment with business objectives has become tangible as well.