The riveting story of how the king of eye-care, Bausch & Lomb, moved its entire IT to the public cloud and why it was possibly the best IT decision it ever made.
Public cloud computing is arguably the least trusted technology we have today. Despite a stupendous promise, the technology continues to be under-utilized and viewed with suspicion. But there comes a time in business, when companies need to make some hard decisions, defy conventions, and take the road less traveled. That’s exactly what Bausch & Lomb did when it decided to move its entire IT into a public cloud. In the business of providing best-in-class eye-care for over 150 years, Bausch & Lomb’s move to a public cloud shouldn’t come as a surprise. A peep into the company’s history is enough to understand that it has always had an innovative streak. For starters, it was the first company to manufacture x-ray glasses used for aviation and the ‘aviator’ glasses made famous my Tom Cruise in Top Gun. It was also the first to mass manufacture microphones and microscopes. In fact, it is the only company outside the film industry to have got the Oscar for manufacturing 70 mm screens way back in 1954. The company flaunts a proud lineage based on innovation primarily in three verticals—pharmacy (deals with eye related disease products), surgical (machines for doctors to perform surgeries) and vision care (deals with contact lenses and lens care products).Five years ago, the Indian wing of Bausch & Lomb was the hub of IT deliveries primarily for India operations only. It was quite neglected in terms of IT investments and more importantly not utilized for any global operations. But great ideas are often born out of the darkest recesses and by raising awareness of the huge talent pool that the country possesses.
Taking Baby Steps
The APAC region of Bausch & Lomb started toying with the idea of cloud computing in 2008. The business case was fairly obvious: Cloud would give it the best scalability, reliability, and availability that its budgets could buy. It gave the company the much needed bandwidth, without which it couldn’t support business.It was a critical call. Bausch & Lomb’s business in India was growing at 16 percent year-on-year, and the company had already captured close to 60 percent market share in one of the business areas. But unlike its IT counterparts in other geographies, money wasn’t flowing into IT. “Budgets were tight, but we couldn’t sit with our hands tied and refuse to support business because money wasn’t coming in,” says Shuchi Nagar, former IT Director, Bausch & Lomb. But the problem was that there was a lot of negativity around cloud computing. However, it was still the company’s best bet. Nagar was ready to place the gamble, but not a blind one. In early 2009, Bausch & Lomb took its first baby steps towards the cloud by moving its CRM to the public cloud. But it already had a CRM in-house, which made moving to Salesforce a questionable decision. “To go out and change something that wasn’t broken wasn’t easy. But the case was built around the fact that Bausch was growing at an exceptional pace and the existing apps weren’t able to keep up with the pace of change we anticipated.” The entire sales and marketing teams at Bausch & Lomb took to the cloud with surprising ease. The entire sales and marketing cycle—be it measuring productive hours, call effectiveness, tracking campaigns or revenue generated, checking captured leads, and post sales activities—is now handled on the cloud. While there is no historic information to compare with, the productivity and transparency boost was too apparent to ignore. It was Nagar’s first win in many to come. While CRM on the cloud was an instant hit, Nagar’s plans to venture deeper into the cloud was still met with cautious skepticism and of course the dreaded ‘S’ word: Security. There has not been a single discussion about cloud computing which hasn’t raised the question of security. But Nagar was well prepared, and he wasn’t going to plunge into the deep sea without a life jacket. Before moving its CRM to the cloud, the company did a detailed study and it was convinced that it had the necessary safeguards in place and good level of authorization around it. “It also helped that the vendor was audited by the same company that we use for our general audit,” adds Nagar.He took further caution. Initially, the company ventured without using any critical sales numbers. Dashboards came much later, once trust and comfort was well established. In phase one which lasted a year, Bausch grew from 61 to 1,200 cloud licenses. Nagar began dreaming of moving to a complete public cloud model where it could be purchased and used on the go without any investment and support worries. Little did he know that he’d realize the same in less than three years.
Welcome to the Cloud
The APAC wing of Bausch and Lomb had many datacenters distributed across the region in Japan, Hong Kong, Australia, and India. Previous successes directed Nagar’s efforts to consolidate the datacenters into one location. “We had around 4,000 sq ft of area in HK. The entire 2010 was spent in consolidating our datacenter. This offered us better economies of scale, ” says Nagar. The consolidation began as a hardware consolidation project but soon, as Nagar gained more confidence, he decided to extend it to the company’s non-ERP, peripheral applications. “When we first began consolidation, we didn’t look at consolidating our ERP because we didn’t have the necessary storage capacity. We needed to grow our storage first before we took up the ambitious ERP consolidation project.” But he did it, eventually.The team consolidated eight instances of ERP in a single box. Nagar thought it prudent not to host the ERP on a virtual platform as it was fairly old and complex. Nagar used the successful consolidation as a launching pad to begin his real foray into the cloud. It was time to make the call to a private cloud operator in Hong Kong. Come 2013, Nagar was ready to stretch his wings further. He no longer wanted the company’s resources supporting the datacenter. There were much more important things to do. “Our core competency is not IT, our core competency is eye-care, and we want to focus on it,” he says. After having made that call and a few others, Bausch & Lomb went with a private cloud outsourcing partner and handed all its datacenter-related activities to it. Bausch & Lomb moved its entire IT to a caged area in a shared infrastructure platform in the outsourcer’s DC. By moving its IT outside, it was able to exploit the benefits of a better rack structure and storage device, with minimum investment. And that’s how it moved from a capex model to a completely pay-per use opex model. But it still was a private cloud. The company’s DC now resided in a caged area dedicated to Bausch & Lomb within the outsourcers’ premises with limited access. “Once our confidence was built, we started tinkling with the idea of moving to a public cloud,“ says Nagar. By the beginning of 2013, Nagar was ready to let go of the caged area: Better ROI, more scalability and more control, he reasoned. The primary motivation was mainly cost. “We were happy with the security and the quality of services was much better, but cost was the key driver.” By going entirely public, Bausch & Lomb reduced almost 20 percent of capex cost. Finally, it was time for Nagar to make the last big decision: To move or not to move ERP. He decided to go ahead. Today, all of Bausch’s apps, except for one instance of ERP runs off a public cloud. “The ERP that is still lying in private is 30 years old and fairly unique to us. But the plan is to consolidate that too and move to a common platform,” says Nagar. The company’s contract with its vendor spans three years and comes with 24/7 availability and disaster recovery—a scale out model that it couldn’t have imagined without the cloud.
The benefits of public clouds have always been universally accepted. And yet low adoption levels point to the fact that it’s just too hard to implement. People and perception are always the biggest challenge, says Nagar. “You walk into a meeting with any business head, and his biggest worry is what will happen when something goes wrong. It’s the fear of change,” says Nagar. The other fear was the move itself. What will happen during the move? How much downtime will there be? Will there be a loss of data? “We did our best to prepare top management for the shift. We ran a series of awareness workshops, communicating the risks and rewards. We involved all the stakeholders, educated them on what the cloud means, and why it was good for business. Fear often stems out of ignorance. Our objective was to remove the very root of fear from their minds,” says Nagar. While he was prepared, in theory, Nagar didn’t stop there. For every move it made, either from its private DC to the private cloud, or from the private cloud to the public cloud, he did multiple dry runs. “On our last leg, we did five rehearsals of moving the ERP from private to public cloud over five weekends. Every Friday, we would shut down for four hours, take a complete backup, and then start ERP again in the migrated platform and upload all data. We would then run it past business to check if everything was fine. By the third time, they came back to us and asked if the other two runs were really necessary!” So, was getting buy-in difficult? Nagar says he worked hard for it. “The secret to getting a buy-in is pre-selling. Even before I presented my business case to move to the cloud, they were well aware of the trend and bought into the concept.”
The Road Ahead
Currently, the public cloud project covers only the APAC division of Bausch & Lomb, and it hasn’t been able to replicate the same success with its more developed geographies. And it doesn’t intend to do so. “Despite its benefit, public cloud is not for everyone. We had been neglected from an IT perspective for three decades, hence our cost case for cloud was stupendous. But in developed markets the business case is not that strong. APAC, on the other hand, couldn’t have survived without moving to the cloud.” Today, the company has eliminated capex entirely by moving to a completely pay-per use model. “We operate in a high-growth market, hence agility is non-negotiable. We need to be able to scale up and down on-demand,” says Nagar. And this was brilliantly demonstrated recently when Bausch & Lomb was acquired by Valeant Pharmaceuticals International. “When we got taken over, we realized the need for synergies. I had to scale down my staff which was a breeze because I just had to give a two-month notice. My SLA with the vendor is so flexible that I don’t need to pay for extra capacity for even a day,” says Nagar. For a high growth market such as APAC, this has enabled the company to enter and exit new geographies dynamically as per business demand. One piece of advice to CIOs that Nagar wants to give: Be very careful while crafting the contract terms and conditions—even 99.9 versus 99.5 can result in a few hours of downtime for example. Nagar also cautions his peers in India against crafting contracts in dollars. “By just having my contract in rupees, I have saved significantly. Given the fluctuation in the forex market, this can be a life saver.” Nagar believes the cloud project has been the single biggest boost to his career. “I have become more important now than I have ever been in the past. For example, when I go to speak to my supply chain head today, I talk to him about DSO, MOH, and OTIF and not about whether the systems would be up tomorrow night when he has to ship out his supplies.” Now, the conversation has shifted to how IT can help business turn things around. “Just the other day, we were having a conversation about how I can empower my network executive on the field with an iPad app for his customer. This conversation wouldn’t have happened without the cloud.”
Varsha Chidambaram is principal correspondent. Send feedback to firstname.lastname@example.org
We operate in a high-growth market, hence agility is non-negotiable. We need to be able to scale up and down on-demand. The cloud has helped us do that.