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IT Retail Store Analysis
The IT industry is extremely focused on the needs of the data center, with far less emphasis
on remote sites. Implementing products that were developed for the data center for remote
sites is often the only option available—there are just not that many solutions developed
specifically for these environments. Indeed, for many IT vendors, remote site considerations
are often an opportunistic afterthought. They pay lip service to remote sites in order to sell
products designed for the data center in remote site opportunities, essentially trying to place
a square peg into a round hole. There are, of course, exceptions, but they are too few and
far between.
IT requirements at remote sites vary from industry to industry, but there is a great deal of
common ground as well. Typically, IT support is centralized; solutions at remote sites need
to be easy to use and centrally managed. This becomes especially important as the number
of remote sites under management increases. Managing two or three sites can be difficult;
managing 1,000 sites is exponentially more complex.
The number of sites impacts everything.
If it took one week to get an IT
Typically, IT professionals aren’t overly
concerned about ease of installation and
system up and running, it could take
deployment in the data center. They can
5,000 business days to complete the
afford a day or two, or even a week, to
same project at all [1,000] sites.
deploy and make operational data-centerPerforming a single deployment
based IT solutions. But if 1,000 sites need to
every day, it would still require 2.7
be brought online, deployment can literally
years to complete the project.
take years. If it took one week to get an IT
system up and running, it could take 5,000
business days to complete the same project
at all sites. Performing a single deployment
every day, it would still require 2.7 years to complete the project. That is an absurd amount
of time, and the cost would be astronomical as well: whether performed by in-house
personnel or a professional services organization, a large-scale remote site deployment
executed over such a long period of time could cost millions of dollars.
Capital cost is another major consideration. A $10,000 solution may seem relatively cheap
in terms of the data center, but deploy that solution in 1,000 sites and the total cost
skyrockets to $10,000,000! Even with an aggressive discount, the result is still millions of
dollars for what was a “low cost” solution. And it is, of course, relative: for a smaller
company with 50 remotes sites, the additional cost can easily exceed its budget.
The relative size of the company and the number of remote sites under management
impacts operations as well. A company we spoke with has a data center and over 30
remote sites managed by just two IT personnel. A far larger company has ten people
managing 150 sites. Both organizations average about 15 sites per IT person, and both cite
reliability and ease of ongoing management as high priorities. However, in the smaller
company the IT personnel have to manage everything including the data center, help desk,
user issues, backup, etc.
Another consideration is WAN bandwidth. In many cases, there is connectivity between the
remote sites and the central data center. In fact, some companies even have dual WAN
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technologies and providers since, for them, it is imperative that remote sites and the central
site communicate 24x7x365 without fail. However, bandwidth is often minimal at remote
sites because of the extreme cost of connectivity. Efficient use of this bandwidth is
requisite. For this reason, backup strategies vary and are often a compromise. Some
companies still back up locally to tape. Others back up locally to disk, but have no offsite
copies of data. Others do back up remotely, but would not be able to restore over the WAN
because it would take too long—in these environments, the strategy is to perform a restore
at the central site and then physically send the systems to the remote in the case of an
extreme disaster.
IT for Retail Stores
Retail stores are an interesting vertical because they actually generate revenue; they
establish the culture and experience for their customers; there can be dozens, hundreds,
and even thousands of stores; and there is typically no IT personnel on site. Additionally,
retail stores vary, with a range of physical footprints, services, and products. All of these
characteristics are meaningful since they inform nearly every decision retailers make with
regard to their IT strategies and solutions.
One of the most important aspects to remember about retail stores is that they are often a
company’s main source of revenue. As such, their point of sale (POS) systems must always
be up and running. Uptime is by far the most important requirement to ensure that
transactions continue and customers are happy.
Local or Central Application Strategies
There are varying methods for achieving uptime in POS systems, with two approaches
being typical: the first is running the POS application on local servers in each store, and the
second is running the POS application at the central data center and using a client
application at the stores.
Companies running the POS application locally typically also run other applications locally,
including back office applications,
inventory controls, and customer loyalty
A number of retailers will remain
programs. Many also like the flexibility of
steadfast with VMware, but many others
using virtualization for easy upgrades
are considering either a multi-hypervisor
and fast application deployment. Running
strategy, and some a complete
applications locally can also reduce WAN
replacement strategy. Microsoft Hyper-V
costs
is the most often-cited alternative, with
some interest in KVM.
Companies running the POS application
centrally often do so because they
developed their own POS application
many years ago and it was designed to run
centrally. Others may be using third-party
POS systems, also with a central architecture. Neither scenario precludes them from having
local systems that run other applications such as back office applications. In fact, every
company interviewed had local servers at their stores.
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Virtualization Strategies
The majority of retailers have implemented virtualization at their stores, it must be noted
that a number of them still have not but are either planning or considering doing so.
As could be expected, VMware is by far
These retail companies are
the virtualization platform of choice.
However, this is in transition. A number of
considering Microsoft due to its
retailers will remain steadfast with
reduced cost and the fact that HyperVMware,
but
many
others
are
V is now considered technically
considering either a multi-hypervisor
equivalent for their purposes.
strategy, and some a complete
replacement strategy. Microsoft Hyper-V
is the most often-cited alternative, with some
interest in KVM.
These retail companies are considering Microsoft due to its reduced cost and the fact that
Hyper-V is now considered technically equivalent for their purposes. In other words,
economics are the driver and Hyper-V finally provides a viable and functional alternative to
VMware.
One company stated that it would save over $1,000,000 annually in software maintenance
charges by switching to Hyper-V. As a result, a full replacement of VMware has been
mandated at the CEO level. Other companies have referenced similar economic
motivations: Hyper-V and System Center are already part of their enterprise agreements
with Microsoft and executive management is very interested in taking advantage of this.
KVM is being considered also as a means to reduce costs as well as for the flexibility and
freedom that open source promises. A large retailer interviewed for this report has already
deployed open source virtualization. One of the main reasons this retailer took the open
source path was to eliminate the arduous and bureaucratic process of dealing with software
licensing. As an example, months of legal negotiation with a major software vendor were
required for its database usage, driving the organization to use open source database
software where possible. The same is
true for virtualization: using open source
The companies that will continue to
allows retailers to grow or shrink their
use VMware are doing so for a
environments as needed without concern
number of important reasons. They
for licensing tribulations.
are experts with VMware and have
optimized their environments over the
years.
The companies that will continue to use
VMware are doing so for a number of
important reasons. They are experts with
VMware and have optimized their
environments over the years. They also
believe VMware to be best-in-class and feel it will continue to innovate and improve on its
solutions. One company interviewed said it needed to trust the environment 100%, making
VMware its solution for the foreseeable future. Additionally, these organizations have
invested a great deal in VMware and feel the investment has paid off.
For those using Linux SUSE, there is a very compelling economic advantage with using
VMware: the SUSE subscriptions are included. One large retailer with over 2,000 stores
runs the majority of its applications on Linux and made it quite clear that moving to another
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hypervisor platform—and acquiring the requisite subscriptions —would increase their costs
significantly.
Server Strategies
HP and Dell seem to be the server vendors of choice for the majority of retailers
interviewed. However, Cisco UCS was being implemented as the server solution in one
retailer with over 1,600 stores.
Interestingly, the refresh cycles for these servers tend to be far longer than in the data
center. The strategy tends to be to get more processing and memory power than needed so
the servers can keep up in performance for at least five years and—in more than one
case—up to 12 years! One retailer said that the only reason it was swapping out its physical
servers was due to the OS and applications requiring 64-bit support, but otherwise it would
keep them for as long as possible.
Storage Strategies
Without exception, the amount of data stored at retail stores is minimal. In many cases, it is
under 2TB of local data. Although capacity is not significant since uptime is of such
importance, some retailers have deployed storage area networks (SANs) with highly
available storage systems. However, the majority of retailers interviewed utilized server
storage. A number of them have either deployed a virtual storage appliance (VSA) or are
evaluating such solutions.
One retailer interviewed is the CTO of a 150-store supermarket chain. They had been
interested in deploying a VSA solution since 2006, but didn’t feel the technology was
mature enough. What attracted them
to VSA in the first place were the
Another retailer with over 2,000 stores had
same things that attracted them to
deployed SANs and decided to reevaluate
server virtualization: it was softwareits storage requirements during a server
based, it was hardware-independent,
refresh. This was due in part to the high
flexible, it had a reduced footprint,
capital costs and major stress that came
and it was easier to manage. They
with supporting physical SANs. As a result
are in the process of transitioning all
they are implementing a VSA to replace
physical SANs in favor of a VSA
their SANs with an estimated savings of
solution.
over $10 million, just in capital costs.
Another retailer with over 2,000
stores had deployed SANs and decided
to reevaluate its storage requirements
during a server refresh. This was due in part to the high capital costs and major stress that
came with supporting physical SANs. As a result they are implementing a VSA to replace
their SANs with an estimated savings of over $10 million, just in capital costs. Operational
savings have not been determined yet, but they are predicted to be substantial. In less than
four months, the retailer has over 1,000 sites deployed and operational, which is
staggeringly fast and efficient. It considers its current VSA solution to be strategic to the
business and its next generation storage system in the retail stores.
Another retailer is replacing its iSCSI SAN with a VSA solution for a number of reasons.
Implementing a VSA significantly reduces capital costs and leverages an existing
investment in server technology. It also eliminates a hardware component, which could
become another point of failure and minimizes the need for a physical network attached to
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an external storage system, which often requires
additional configuration, optimization, and
troubleshooting. The retailer is also going to
implement campus-wide disaster recovery,
arranging the redundant servers running its
applications and the VSA software across the
store in a stretched cluster to provide even more
resiliency—something that could not be
achieved with physical storage controllers.
Backup Strategies
Backup at retail stores is consistently an issue.
For the most part, all of the retailers interviewed
perform backups at their stores, but improving
the process has not been a priority. One retailer
said it is their “biggest nightmare.” Another
indicated that backups are still sent to tape and it
should probably look into how the backup
process can be improved.
What is a VSA?
A virtual storage appliance (VSA)
is a software-based storage
system that runs on a virtual
machine. The VSA is typically a
dual controller with failover for
high availability.
The VSA typically runs on the
same servers as the business
applications using the internal
storage of those servers.
The VSA value proposition
includes reduced hardware and
lower capital cost. However keep
in mind that not all VSAs are
equal and you need to do an
evaluation to determine the ease
of use, deployment, performance,
high availability, etc. - discussed
in this report.
It is important to note that each retailer has
painstakingly architected solutions to protect
customer and transactional data through various
methods. Centralized POS applications are
backed up at the central data center, and many
systems have various levels of redundancy.
However, backup is either for non-POS data or it
is just one of a number of processes utilized for data protection. In fact, it is because the
bases are covered for high availability, redundancy, mirroring logs, etc. that backup often
ends up on the back burner.
Challenges with backup include using tape systems at the store, difficulties in centrally
managing expensive solutions, and a lack of bandwidth when attempting to restore data or
virtual server images. Additionally, expensive disk-to-disk solutions are often not affordable
for deployment in multiple retail locations.
IT Priorities and Requirements
It is essential to understand that so many of the decisions retailers make are made with the
dozens, hundreds, or thousands of stores they have to manage in mind. In addition to the
sheer number of sites, it is again important to remember that these stores generate revenue
and are the primary point of contact with customers.
Uptime
All of the retailers interviewed placed uptime at the top of the priority list. If their systems are
down, they cannot conduct business and may lose customers as a result.
Ease of Ongoing Management
The combination of multiple geographically dispersed locations with no on-premises IT
personnel makes ease of ongoing management essential to retailers. This includes solving
problems quickly (related to uptime), optimizing systems if needed, upgrading, making
configuration changes, and other maintenance. Additionally, centralized management is a
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critical requirement—jumping from management console to management console is
impractical, inefficient, and cumbersome.
Simple Deployment
Deployment is typically a lower priority in the
data center (preferred, but not requisite), but
it is very important for remote sites and retail
stores. Imagine deploying across dozens,
hundreds, or thousands of sites from a
central location: the time and resource
investments required, to say nothing of the
potential for business disruption, can be
significant. Therefore, in retail stores, simple
deployment is a major requirement.
All of the retailers interviewed
placed uptime at the top of the
priority list. If their systems are
down, they cannot conduct
business and may lose customers
as a result.
Application Performance
Performance is an important requirement, but it is not on the top of the list. “No one likes to
wait” is the prevailing position of retailers and some retailers have peak times, during the
holidays for example, that represent a large portion of their annual revenue—performance
is required to keep the lines moving and the customers happy. However, the transactions
are usually small and therefore don’t overly impact the IT systems they are running on. This
priority is relatively easy for most retailers to fulfill.
Cost
“Cost is always an issue.” That was a sentiment heard time and time again during the
course of this research. It is important to remember that cost is calculated across a large
number of locations: A product that costs $10,000 represents a $1,000,000 line item over
100 sites and $10,000,000 over 1,000 sites. There is a wide range of revenue and
profitability profiles per store depending on the retailer, the size of the stores, and the
locations. Although cost is important, other factors are often more important, such as
uptime, ease of ongoing management, and simplicity of deployment. Service and support
are also major factors that may come before cost.
Regulatory Compliance
Regulatory compliance is very important to retailers audited annually by the payment card
industry (PCI). Most have already established a number of processes to ensure they are
able to meet their regulatory compliance obligations.
Ease of End-User Management
There are two important issues related to ease of end-user management. The first is that
retailers want the least amount of disruption in the stores, so new systems should not
impact employees’ day-to-day responsibilities. Second, if issues with onsite IT systems do
arise, local employees often must serve as central IT support’s “eyes” to assess the
problem—blinking lights and other visual cues can be very helpful there.
Storage Capacity
For the most part, storage capacity is relatively minor in retail stores. Transactions are
small, back office data doesn’t consume much space, and there is a minimal amount of file
data. Capacity tends to peak at 2TB for these locations. If anything, the virtual machines
might be the biggest “files” at these locations. One retailer said its VMs were approximately
1TB in size.
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IT Retail Store Analysis
IT vendors often position and market their data center products for remote sites—to the
detriment of the customer. Very few vendors actually develop products specifically for
remote environments, providing limited options for customers that need such solutions.
This is certainly true within retail stores, a subset of the overall remote site market.
Interestingly, vendors are often driven to add more features and functions that in many
cases are not required for retail stores. For example, none of the retailers interviewed for
this report required thin provisioning, deduplication, or asynchronous remote mirroring, and
nearly two-thirds do not have a need for storage-based snapshots. However, they did
require simple and rapid installations, centralized management, and ease of management,
plus “it just has to work, and work reliably!”
Uptime is a fundamental requirement whether your systems are in the data center or at
retail stores—but for the latter, there is an even greater emphasis on balancing cost and
complexity for achieving redundancy, reliability, and resiliency. Simplicity is valuable for
the data center and at retail stores—but for the latter, it is exponentially more important due
to the sheer number of systems and locations, their geographic distribution, limited IT staff
covering a large number of stores, and the inability to always be physically on site. This is
true when considering installation, utilization, and optimization over time. Additionally, cost
is always an issue, but the multiplier across a large number of stores can be staggering.
The need for products and solutions specifically designed for remote sites and retail stores
as a subset of this is clear. Consider this analysis a call to action for the IT industry to focus
on this market rather than taking a one size fits all approach. Further, companies supporting
a large number of remotes sites should seek out those IT vendors that do specifically focus
on this market. This is especially true for retailers since so much—if not all—of their
success is based on their stores.
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