Swedish ICA goes green and agile – sells data centers to get ready for the future
More than 15 years ago, Swedish market leading FMCG actor ICA began a rapid increase of support for IT and digitization of the business became an increasingly critical part of the company. Back then, the access to data center colocation in Stockholm was very limited and ICA found themselves left with no other good option than to build their own new data centers.
Today, the market for IT infrastructure has evolved quite a bit. And with an increase of virtualisation, streamlining and services being consumed in the cloud, it’s safe to say that neither profitability, scalability nor utilization rate benefits from companies running their own data center — in particular when that center is starting to become outdated.
“When we built our data centers the options on the market were quite limited and it was the most obvious way forward for us as a company at the time. Today, a lot has happened in the market, while we also have much stricter requirements on our IT being stable, reliable and sustainable. In fact, I don’t think there is any really good reason to run your own data center nowadays. When looking at our utilization rate, you realize how inefficient it can be to own a data center for yourself. We’ve had a usage rate of 60 % the last years while paying for 100 % — hardly a good investment.” says Ola Andreasson, Head of Infrastructure at ICA.
As there is a way to get rid of self-owned outdated data centers in a structured and cost-efficient manner, it was concluded that a sale-leaseback with Conapto would be beneficial. Prior to the deal, a thorough analysis of pros and cons has been made, as well as a long-term plan for how ICA efficiently will be able to combine their own IT with services and applications in the cloud. The goal is to develop an operations-oriented IT, free up time and create an environment allowing more innovation — for both customers and coworkers. Meanwhile, ICAs strict sustainability goals had to be taken into consideration when designing the IT infrastructure.
Today, ICA has sold their old data centers to Conapto — whereupon they initially rent space in the very same centers until they are ready to execute on the planned move into Conapto’s modern and climate-neutral data centers. When all equipment from the previous data centers is installed and set up with Conapto, they will shut down the old data centers with great care of environmental aspects — and hand the premises back to the real estate owner.
So, what’s the result of a sale-leaseback in hard numbers? In long term run rate, ICA estimates to save 50% per year compared to running their own data centers. But a sale-leaseback with Conapto has not only been beneficial for the wallet, but also for the environment — which has enabled a shift in focus towards innovation, core-business and being a role model within sustainable IT. ICA will decrease its greenhouse emissions with approximately 116 tCO2* every year — equivalent to the emissions of 1084 flights from Stockholm – Gothenburg.
“Sustainability matters have historically been a challenge for us within IT as it’s been difficult to achieve any major improvement in our own data centers. With this move into climate-neutral data centers, we can clearly see what savings and decreases which are contributing to ICAs overall sustainability goals. That has been a very positive and appreciated gain from this project” summarizes Ola Andreasson.
* Based on location-based method according to Green House Gas Protocol and an emission factor for production mix in Sweden with basis from Department for Business, Energy & Industrial Strategy. Flights are calculated emission per passenger.