High-Level Background
XYZ Company, a global retailer of audio/visual equipment, is depending on proposals to allow for the
reduction on overall Information Technology (IT) cost, while improving business continuity. The
proposals should include ideas and methods to improve the XYZ Company infrastructure based on
industry best practices, while reducing the overall cost of ownership.
Detailed Background
XYZ Company is re-evaluating their business goals. Increasing costs of both infrastructure and the
components to support their business are beginning to affect corporate results. XYZ Company currently
has 150 brick and mortar stores which produce roughly 47% of sales. As the Internet age has grown,
Internet sales now comprise the bulk of XYZ Company revenues, which are currently growing at a 10%
yearly pace. Retail sales, while still a significant portion of the business, are no longer growing.
Management feels these smaller growth levels are unacceptable and wishes to contain a significant cost
of doing business (IT) and invigorate lagging profits in an ever increasingly competitive retail market.
Today, XYZ Company spends a higher portion of revenue on a per-dollar basis than its competitors on its
Internet and corporate systems. This IT spend has grown to support not only a legacy infrastructure for
its store operations, but also to support a completely in-house Internet operation.
Some of the current spend has come from a costly expenditure on legacy SAN storage to analyze and
house order data. This cost has grown by roughly 8% annually, with a new renewal on storage coming in
the next year. Furthermore, IT costs to maintain current equipment in the datacenters have grown.
Along with this, IT has been tasked by XYZ Company board of directors to implement a disaster recovery
strategy to ensure a business operation service-level recovery in 30 seconds or less for local (within the
datacenter) failover time, and 10 minutes or less for the failover time between the geographically
dispersed datacenters during catastrophic disasters. The board has stated that there should be no data
loss during a local failover exercise, while during catastrophic disaster, less than 5 minutes worth of data
loss can be tolerated. This strategy applies to both store services and Web sales.
These requirements came as a result of a massive system outage which crippled their Internet presence,
costing several million dollars in lost opportunity. The system outage was tied back to a hardware
failure, and operational issues which failed to return operations in a seamless manner.