3M Unit Boosts Revenue by 50 Percent with Choice of Cloud Service
3M is one of the largest manufacturers in the world, but when it comes to launching new businesses, it scrutinizes startup costs as closely as any entrepreneur. That’s why 3M chose to host its new Visual Attention Service on Windows Azure. Because subscription costs are “negligible” and managers avoid the administrative hassle associated with buying and running hardware, those managers can focus on growing their business—and have boosted revenue by 50 percent.
"Because management time and cost is so low with Windows Azure, we focus on growing the business, not on managing red tape. As a result, we estimate that we’re bringing in 50 percent more revenue."
Entrepreneurs are attracted to the Windows Azure platform for all the right reasons: they avoid heavy, upfront investments to buy and run hardware; get guaranteed uptime; scale their deployments as much as they need whenever they need; and pay only for what they actually use.
That’s a great combination of benefits for a cash-starved startup, but for a Fortune 500 company? If you think that big, established corporations don’t have many of the same concerns as smaller, younger companies, think again.
3M, for example, has US$29.6 billion in annual revenues. Still, it seeks to maximize the cost-effectiveness and flexibility of its IT, especially in new projects and business units. One such business unit—think of it as an internal startup—is the 3M Visual Attention Service (VAS). It grew out of corporate research into how the brain processes visual information.
Using 3M-developed proprietary software, the unit can show its customers how their customers will look at marketing materials. For example, 3M’s customers can learn which parts of their marketing materials consumers will look at, for how long, and in what order. That’s crucial information for refining webpages, ads, posters, videos, and other visual marketing materials for the greatest impact and return on investment.
As 3M planned its launch of VAS, it wanted to avoid investing time and money in new hardware. It wanted managers to be able to focus on building their business, not their infrastructure. And it wanted to prove the value of VAS as soon as possible. That meant delivering a service with first-class responsiveness and reliability.
3M executives knew that a cloud-computing platform could meet those requirements. And they knew they could trust their long-time technology provider, Microsoft. So, 3M became an early adopter of the Windows Azure cloud services development, hosting, and management environment.
“The similarities between Windows Azure and our own development environment gave us a huge advantage and made our decision easy,” says Jim Graham, Technical Manager at 3M.
For example, 3M developers were already familiar with the Microsoft Visual Studio development system, which they could use with Windows Azure. Similarly, their experience with Microsoft SQL Server data management software was directly transferable to Windows Azure SQL Database.
3M’s initial deployment of VAS focused on a single web interface, supported by three instances of Windows Azure. Today, 12 instances of Windows Azure—to support the steadily growing demand—support not just the web interface, but also phone apps, a plug-in for Adobe Photoshop, and clients created through third-party software development kits. The time to scale, format, and upload an image has declined from 15-to-20 seconds to 2-to-3 seconds as 3M has fine-tuned its use of Windows Azure.
VAS marked 3M’s first use of Windows Azure—but not its last. The company also uses Windows Azure to support a digital Post-It service. 3M’s adoption of a Windows Azure Enterprise Agreement now makes it cost-effective for business units across the company to adopt the technology.
“Clearly, Windows Azure is only going to become more important to 3M,” says William K. Smyth, Global Business Manager of VAS at 3M.
By choosing Windows Azure, 3M minimized the time and cost of launching VAS. Now, 3M has greater resources with which to grow its business.
Minimizes Internal Management Time, Cost
3M has gained big cost savings by choosing Windows Azure over an on-premises deployment—with the most significant savings coming in surprising ways.
“The cost of our Windows Azure subscription is negligible, but that’s the least of it,” says Smyth. “The internal management costs of going to meetings, preparing and presenting the business case for capital investment, issuing and tracking P.O.s, and coordinating with the corporate data center—that’s a lot of overhead, and it goes away with Windows Azure.”
The company’s Windows Azure deployment has scaled by 400 percent since its initial deployment. That scalability has come without the need for additional hardware or personnel. “We don’t need to plan for increased scale in our use of Windows Azure,” says Smyth. “Given the low cost, we don’t need to worry about budgeting for it either.”
Spurs 50 Percent Revenue Growth
Smyth and his colleagues have put that savings of time and money to great use.
“Because management time and cost is so low with Windows Azure, we focus on growing the business, not on managing red tape,” he says. “As a result, we estimate that we’re bringing in 50 percent more revenue than we could without Windows Azure.”
Instills Customer Confidence
That’s not the only way that Windows Azure supports VAS.
“It’s important for us to be able to say that VAS is supported by Windows Azure,” says Smyth. “Prospective customers don’t have to worry that their service is running on some anonymous group of servers in our data center or at a hosted site. The cloud gives us credibility, and Windows Azure gives us even more credibility. It definitely helps to instill customer confidence in the delivery of VAS. And that leads to more, and happier, customers.”