Retail is one of the most challenging and competitive markets for consumer non-durable goods. While most sales are generated in-store, appealing online experiences and fast deliveries mean retailers need to offer customers a multichannel experience that builds brand loyalty. Successfully competing in this environment involves a substantial amount of IT infrastructure that is integrated across the organization to deliver a unified and personalized buyer journey. Managing the associated costs are equally important, especially in this intensely competitive market with razor-thin margins.
Deploying Modern Technology
Recently, Dell Technologies worked with a global multichannel retailer to modernize its storage environment for unstructured data. Historically, the retailer refreshed this technology every five years and purchased new equipment as a capital expense (CapEx). However, during the next refresh cycle, it wanted to avoid incurring another large upfront investment and a cash flow analysis identified significant cost savings made possible with a consumption-based payment model. The retailer chose Dell Technologies APEX Flex on Demand solution so that it pays only for the storage capacity consumed monthly, helping lower the cost of IT infrastructure.**
Dell Technologies’ server, storage, networking, data protection and CI/HCI products are all available with Flex on Demand. Customers select the configuration and services for their workload requirements, a contract term and levels of committed capacity, typically 40 – 80% of the total amount reserve, with the remainder being buffer or reserve capacity.
Committed capacity charges are billed monthly and buffer usage is charged only when consumed. At the end of the 12- to 60-month contract term, customers can go month-to-month, agree to a new contract, or return and refresh the equipment. Flex on Demand also features a billing limits for storage, data protection and hyperconverged infrastructure, so charges for usage above 85% of capacity are waived, a feature that is unmatched by other on-prem vendors and public cloud providers.***
Increasing Budget Flexibility and Leverage
Deploying this payment model enabled the retailer to pay for the exact amount of storage capacity is used. On-demand buffer capacity is available to scale up or down at any time to effortlessly support the company’s growing storage requirements, usage spikes and cyclical increases during peak shopping periods. Flex on Demand’s unique billing limit also enabled the ability to control costs during high utilization periods.
The retailer projected its infrastructure costs would be approximately 10% lower over five years compared to a capital expenditure because it is paying for the technology consumed. These and other cost savings enabled the retailer to upgrade the storage system in a second data center and deploy the additional capacity needed to deliver a superior customer experience. It also helped reduce the risk of under- or over-deployment and produce stronger business outcomes and margin performance. Results of this magnitude are helpful to any business or industry, especially in the slim profit margin world of retail.
Staying on the Cutting Edge of Technology
Faced with a very competitive environment, the retailer needed to provide an industry-leading personalized buyer journey. This required processing large volumes of highly sensitive customer and operational data. By upgrading to a modern storage system, the retailer was able to deliver better customer experiences by increasing its ability to generate rich insights into consumers’ wants, needs and purchasing behavior.
Gaining Simplicity, Agility and Control
To manage highly sensitive customer data, retailers must comply with strict business standards to maintain security and privacy. By leveraging an on-premises, cloud-like solution, the retailer maintained security controls within its data centers. This allows security protocols to stay consistent with business standards without interruption to existing processes. The on-premises solution also provides full control of data security policies and responsibilities, an option that is not possible with public cloud solutions.
For the retailer, a flexible IT consumption model using APEX Flex on Demand is an ideal financial approach that generates multiple business benefits. Deploying modern technology in not one but two data centers with 10% in cost savings justified a pivot in the retailer’s overall business and IT strategies. Moving from a CapEx model to an OpEx-like approach enables enhanced customer experiences and business outcomes, delivering the ultimate benefits of less is more.
Read more about APEX Flex on Demand in Retail here.
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**Payment solutions provided to qualified commercial customers by Dell Financial Services through Dell Technologies group companies or authorized business partners. Solutions may be changed without notice and are subject to product availability, eligibility, credit approval, acceptable documentation and local applicable law. Some solutions, including end-of-term purchase options, may not be available or may vary by country. Within the EU, the EEA, the UK and Switzerland certain solutions are provided by Dell Bank International dac and in Spain by Dell Bank International dac Sucursal en España. Dell Bank International dac is regulated by the Central Bank of Ireland.
*** Available with Flex on Demand for Storage, Data Protection, and VxRail. Dark sites, non-metered deployments, and customers non-compliant with their contract terms are not eligible.