Being an established player in a market can definitely have its advantages. If you’re big enough, there are advantages of scale and barriers to entry that can make it possible to get comfortable in your market.
But what happens when the market flips on its ear?
This was the situation in which Shanghai-based Bailian group found itself in several years ago. China’s largest retailer, the chain of more than 6000 grocery and department stores was spread all over the country.
Many of the brick-and-mortar company’s online competitors, such as JD.com, Suning, and Taobao were introducing new sites and campaigns, and other traditional enterprises were moving to a multi-channel strategy. In 2014, Bailian decided to join them.
Chinese consumers bought close to $600 billion in online goods during 2015, a 33 percent increase from the prior year. The company knew that if it were going to survive, it had to solve several major problems:
- Lack of agility: Some applications were not cloud native and took months to update, and waiting for a new server could take weeks, slowing development of new applications to a crawl.
- Server underutilization: As much hardware as Bailian was using, there was still a huge amount of unused capacity that represented wasted money. It had to be streamlined and simplified.
The company set out to create the largest offline to online commerce platform in the industry — and to do that, they had to replace their existing IT infrastructure.
Choosing a platform
“Our transition from traditional brick and mortar to omni-channel business presented a great opportunity but an equally large challenge,” says Lu Qichuan, Director of IaaS and Cloud Integration Architecture, Bailian Group. “We needed a large scale IT platform that would enable our innovation and growth.” Thinking big, Lu and his team outlined four guiding principles for their new platform — fast development, dynamic scaling, uncompromised availability, and low cost of operations. These guidelines would support aggressive online growth targets through 2020.
And it wasn’t as though Bailian was a stranger to online commerce. The company was already running a Shanghai grocery delivery service, on its existing IT platforms. But it knew that its existing applications, which were not yet cloud-ready, weren’t just complex to support; they also required long development cycles. Add to this the desire to not just port legacy applications such as supply chain logistics and data management to the new, more flexible infrastructure, but also to reclaim applications running on public cloud, and the way forward was clear: private cloud was what Bailian needed.
But which? The company had already zeroed in on many of the advantages of OpenStack. In particular, Bailian Group was impressed by the platform’s continuous innovation, with rich new feature sets every six months. The IT team also valued OpenStack’s lower licensing and maintenance cost, flexible architecture, and its complete elimination of vendor lock in.
Finally, Bailian Group is a state-owned enterprise, so when China’s Ministry of Industry and Information (MIIT) officially declared its support for the OpenStack ecosystem, the decision was straightforward.
Bailian Group then selected the OpenStack managed services of UMCloud, the Shanghai-based joint venture between Mirantis and UCloud, China’s largest independent public cloud provider. UMCloud’s charter to accelerate OpenStack adoption and embrace China’s “Internet Plus” national policy closely matched Bailian Group’s platform strategy. “We found OpenStack to be the most open and flexible cloud technology, and Mirantis and UMCloud to be the best partners to help us launch our new omni-channel commerce platform,” says Lu.
Start small, think big, scale fast
Bailian Group’s IT leaders worked with Mirantis and UMCloud to quickly build a 20-node MVP (minimum viable product) using the latest OpenStack distribution and Fuel software to deploy and manage all cloud components. The architecture included Ceph distributed storage, Neutron and OVS software defined networking, KVM virtualization, F5 load balancers, and the StackLight logging, monitoring and alerting (LMA) toolchain.
With this early success, the team quickly added capacity and will soon reach 300 nodes and 5000 VMs in this first phase of a three phase, five-year plan. Already a handful of applications are in production on the new platform, including one that manages offline-to-online store advertisement images using distributed Ceph storage. The team has also added new cloud application development tools and processes that foster a CI/CD and DevOps culture and increase innovation and time-to-market. This development environment includes a PaaS platform powered by the Murano application catalog and Sahara for data analysis.
For phase two, the IT team anticipates expanding the OpenStack platform to 500 nodes across two data centers and more than 10,000 applications by the end of 2018. Phase two will also add a Services Oriented Architecture (SOA), microservices, and dynamic energy savings.
Embracing the strategy of starting small, thinking big, and scaling fast, phase three will extend to 3000 nodes and over 10 million virtual machines and applications by the end of 2020. Phase three will also add an industry cloud and SaaS services that drive prosperity of the retail business and show other retailers the processes and benefits of cloud platform innovation and offline to online digital transformation.
Interested in more information about how Bailian Group is making the most of OpenStack to solve its agility problems? Get the full case study.