Automotive retailer drives into the cloud

Asbury Automotive Group CIO Barry Cohen says his team should focus on what it does best, and drop the rest. With that as its guiding philosophy, the $5.9 billion automotive retailer decided to become data-center-free.

“We decided we don’t do data centers well, nor develop applications well,” Cohen says.

The move paid off. Cohen says he and his staff now spend most of their time working with the business — a strength for his team and a goal for many IT leaders. Meanwhile, the company’s technology is 100 percent in public and private clouds.

Cohen, who joined the company in 2011 as an enterprise architect, started on this path by first evaluating the IT team’s core competencies. He wanted to keep the tasks that his team could do better, more quickly or more cheaply than an outside vendor, but shed those that a service provider could handle more effectively.

He determined that IT wasn’t good at managing data storage, backups, patching and 24-hour support — all of which are part of running a data center. But he saw strengths in governance, compliance, project management, application management and systems integration.

An early win, where he moved from a costly, ineffective on-premises reporting system to a cheaper, better-performing business intelligence tool in the cloud, helped Cohen promote his strategy.

Cohen, who became CIO in March 2014, also showed that cloud computing would reduce spending on things like hardware upgrades by millions of dollars. Indeed, his strategy has produced a decreasing IT budget, with no capital expenses; his budget is 100 percent operational expenditures.

Three data centers: closed

Since 2011, Cohen and his staff have moved from on-premises legacy systems to either software-as-a-service products or applications running in a public cloud or a vendor-managed private cloud. He closed three data centers housing about 70 servers and trimmed the IT staff from 51 people to 38, even as the company increased total head count.

At the same time, some work was brought back in-house, says Cohen, citing network monitoring, which he says his team handles better, and at a lower cost, than a service provider did.

There were some bumps in the process. Cohen says cataloging applications, determining alternative solutions and migrating from legacy applications to new ones were big challenges. Convincing programmers to support the new direction also proved difficult, and he did lose staff as a result.

But those who stayed are better engaged with the business. “They’re visible. They’re talking with people and identifying issues and getting them resolved quickly,” he says.

Although the no-data-center strategy worked for Asbury Automotive, Gartner analyst Ed Anderson says it’s not for everyone.

If technology plays mostly a supporting role for a business, then being data-center-free makes sense, Anderson says. But if technology is core to what a business does, that approach could lead to a loss of competitive advantage if it, for example, left the organization unable to customize applications.