Private Cloud Nurtures Farming Co-op
Mention farms, and most people think of bucolic fields full of corn and cows. But farms are very different these days. Most still have corn and cows, but there’s also an incredible amount of information technology that helps farmers operate more efficiently and profitably.
Just ask the 44,000 farmers who are members of the Lantmännen cooperative, headquartered in Stockholm, Sweden. This economic association operates in 19 countries and has 12,000 employees. Its operations are divided into four sectors—Agriculture, Machinery, Energy and Food—and encompass five corporate functions: Economy & Finance, Information & Communication, Legal Affairs & Organization, Human Resources and Internal Auditing.
Lantmännen’s purpose, according to its Website, “is to maintain a highly competitive enterprise and a cooperative with clear owner control based on the farmers’ needs. One of its goals is to create a cohesive group, able to maximize its strength throughout the value chain and tap into synergies and economies of scale.”
To achieve these goals, the cooperative depends heavily on information technology. “Our farmers develop their products the old-fashioned way, but they want us to handle their products the best, most efficient way,” says Dennis Jansson, chief security officer. “We’ve optimized our operation so we can do that and provide our members with tools that can help them succeed.”
Creating a Private Cloud
One key way in which Jansson has optimized the cooperative’s operations is by creating a private cloud, “the world’s largest private enterprise cloud, based on the number of sites, countries and applications,” he says. “We were early adopters of WAN optimization, virtualization and service-oriented architecture, which enabled us to industrialize packages of applications and make them available to users through the cloud.”
One of the reasons Jansson chose a private cloud over a public one is because he believes it provides better security. The co-op’s private cloud is protected by its security management process, which is a framework for determining how to secure stable solutions from start to finish.
The decision to develop a cloud was based on the needs of Lantmännen’s members. “We made a baseline of our business needs to find out how we could provide the correct services to our members,” Jansson explains.
“We are business-driven. There is no need for us to develop something unless the business asks for it, so we have moved from being a reactive department to one that’s focused on solving business problems and understanding business challenges.”
The first step toward a private cloud involved centralizing and consolidating the servers with VMware. Jansson replaced the servers with a Riverbed box, a Microsoft server and a Riverbed Service Package (RSP) with local print and Active Directory enabled. This setup provided local access to applications throughout the organization. “We tested this implementation at 90 sites, and it worked perfectly,” he says.
Currently, the cloud serves approximately 300 branches in more than 20 countries, and that number will eventually grow to 550 branches. “Every time we connect a branch, the employees there gain access to 5,000 applications and applets,” Jansson says. In addition, there are two backup server centers in rural places in Sweden.
“Now, virtualization and RSP save us about $600 a month per server, including electricity, licenses, maintenance and local backup,” he reports. “We did have to spend money for new hardware, but we estimate real savings at $60 million over five years.
“Another plus is that we know how much everything in IT costs. And by cutting down to one server per branch, we’re reducing tons of carbon dioxide. That’s important to us because we are a socially and environmentally conscious organization.”
Lantmännen even has a standard that says how bright computer screens can be, which cuts down on energy usage. “We checked with doctors to be sure the screens were bright enough so they wouldn’t cause eyestrain,” Jansson recalls. “These are small steps, but we do a lot of small things that add up to big energy savings.”
After completing the server virtualization and consolidation effort, Jansson’s next step was to prepopulate Microsoft Office packages that could be downloaded from the servers to the Riverbed boxes. He also moved the control of which employees get to have particular applications to the front line. When a manager gets a new employee, he or she decides which software and services that individual needs, then goes to the Web page and clicks on the desired applications.
“We give all our employees an ID—Identity Lifetime Management from Microsoft—and on that profile we build the apps we’re going to roll out to them,” Jansson explains. “New employees get empty PCs and press F12 to access the apps approved by their manager. Applications are cached on the PCs, but are stored on the Riverbed boxes.
“We realized that downloading the applications over our WAN would have taken too much time, so we prepopulated our Riverbed boxes on the LANs with all the applications and shortcuts to storage. That cut the downloading time to 20 minutes per PC.”
As soon as a new employee connects to the network, the PC will synchronize. If someone loses a PC, it takes only about 20 minutes to get a new one up and running with access to that person’s applications and files.
Lantmännen users can log onto the cloud’s Web page and—in a secure environment—access every application and service they are approved to have. If they are working remotely, that can access the site using Citrix.
Jansson’s organization works as an internal IT supplier, and managers are charged for each service their employees use: software applications, e-mail and storage. “We have a service-level agreement for each service, and our prices are in sync with how good the SLA has to be,” Jansson says. “Does the manager need a 2-hour SLA or a half-day SLA? That helps determine the cost.”
Because managers know how much they are paying for each employee’s technology services, they can control costs and budget appropriately. Three times a year, managers are asked if all their staff members are still working for them. If one or more employees have left the department, IT will lower that manager’s costs.
“In addition, we can see how our services stack up against outside services with the same functionality,” Jansson says. “We can determine which services are overpriced and can look into alternatives. Our job is to keep the price tag as low as possible and to have local accountability so people don’t get more than they need. That keeps costs down.”
Another way Lantmännen is keeping its technology costs down is by selling some services to other organizations in the agriculture industry. “We’re selling WAN optimization and wireless capacity,” Jansson says, “and it’s helping us have a shorter return on our investment.”
Currently, Lantmännen keeps most of its data in-house, but Jansson hopes to increase capacity by making part of the private cloud public in the future. “We’re looking at incorporating new cloud vendors to get the benefits of scale, but I don’t know when that’s going to happen,” he says.
“I do know that our security management process is critical. We won’t move to a public cloud until the necessary security is in place. And we’d want a larger number of services, including storage, as well as lower prices.
“Finally, each country’s data needs to be stored in that country because they all have different legal and HR systems. So whatever cloud provider we go with must be global.”
Lantmännen also strives to partner with companies that are as socially conscious as it is. “We have a code of conduct that is the core of our business,” Jansson explains. “Our employees must go through an educational process to learn our code of conduct, which covers ethics, environmental issues and chemical processes. Everyone has to take a test on this subject and get a diploma.
“We’re proud to sell quality, well-priced products produced by farmers who eat their own food. We have strict standards for organic food. And we recycle and reuse anything we can to save the environment.
“I really think we’re making a difference. If I didn’t think that, I’d be working somewhere else.”