Kellogg’s company Case Study: With AWS as a trusted Cloud Service Provider
The Kellogg Company was founded in 1898 when founder W. K. Kellogg and his brother, Dr. John Harvey Kellogg, accidentally flaked wheat berry — a mistake that would result in the recipe for Kellogg’s Corn Flakes. The company, which is headquartered in Battle Creek, Michigan, now operates in 180 countries, providing ready-to-eat cereals and other food products. Its 2013 reported net sales totaled $14.8 billion. Kellogg’s brands include Froot Loops, Frosted Flakes, Special K, Rice Krispies, Pop-Tarts, Eggo Waffles, Nutri-Grain Bars, and of course, Kellogg’s Corn Flakes.
Margins are tight in the ready-to-eat cereal industry. For a company like Kellogg, approximately a third of its annual revenue is spent on promotional costs or trade spend: every dollar spent on coupons and special offers, promotions for special pricing, sponsorships, even the location each brand occupies on the grocery store shelf
Analyzing large volumes of data and running complex simulations to predict which promotional activities will be the most effective. Kellogg had been using a traditional relational database on premises for data analysis and modeling, but by 2013, that solution was no longer keeping up with the pace of demand.
Kellogg needed a solution that could accommodate terabytes of data, scale according to infrastructure needs, and stay within its budget.
Why Amazon Web Service
According to Amazon, the number of active AWS users exceeds 1,000,000.
While small and mid-size companies make up the majority of that user base, recent polls by private consulting firms suggest that enterprise-scale users make up at least 10% of that total.
Services used by Kellogg’s
Amazon Virtual Private Cloud (Amazon VPC): connected directly to the Kellogg data centers to allow access to SAP TPM directly for employees who are on the company network
Amazon Simple Storage Service (Amazon S3):It is used for data backups
Amazon Elastic Block Store (Amazon EBS) : provisioned IOPS (P-IOPS) volumes for storage
AWS Identity and Access Management (AWS IAM) : used to log events inside company
Amazon CloudWatch : helps the company allocate costs to each department based on their individual infrastructure use.
Kellogg estimates that it will save close to a million dollars in software, hardware, and maintenance over the next 5 years, just by using AWS in its test and development environments. “Using AWS saves us more than $900,000 and lets us run dozens of data simulations a day so we can reduce trade spend. It’s a win-win, and a pretty compelling business case for moving to the cloud,” McIlwain says.