Q&A: Luq Niazi on Speeding Coca-Cola European Partners’ Journey to the Cloud
IBM announced that it has signed a multi-year agreement with Coca-Cola European Partners (CCEP), the world’s largest Coca-Cola bottler in terms of revenue. The bottlers join a growing number of companies that have committed to the rapidly expanding cloud services at IBM.
Luq Niazi, General Manager, Global Distribution Sector & Global Managing Director, Consumer Industries at IBM, explains what it means for the bottlers, for consumers and for IBM.
What is the gist of today’s announcement?
Coca-Cola European Partners—CCEP—has collaborated with IBM to complete its transformation to an open hybrid environment. The goal for the bottlers is to bring new levels of operational efficiencies, increase IT resiliency and leverage advanced technologies such as analytics and AI from IBM for better business insights, ultimately enhancing experiences for millions of its consumers.
Is CCEP the same as Coca-Cola?
No. The Coca-Cola Company, headquartered in Atlanta, Georgia, makes and markets syrup concentrates which are then sold to bottlers around the world who hold exclusive territories. CCEP was created in 2016 with the merger of the three main bottling companies for The Coca-Cola Company in Western Europe. It has 47 manufacturing sites and serves customers in a million outlets across 13 countries including the UK, France and Germany.
Is this the first time CCEP has turned to IBM?
We’ve already been working together. Today’s news signals the latest major step in CCEP’s digital transformation. IBM has already moved one third of CCEP’s enterprise workloads from a dedicated US data center to the IBM public cloud in Europe.
This latest agreement is a continuation and expansion of that modernization coupling IBM public cloud with Red Hat OpenShift and Red Hat Enterprise Linux. As part of the agreement, IBM Services, with its deep industry expertise, will help CCEP transform to a hybrid cloud environment managed by IBM, including the use of IBM public cloud, and several large SAP workloads.
We expect the first wave of CCEP’s cloud migration to be complete by end of 2021 with the subsequent waves complete by end of the following year.
What will this mean for Coke drinkers in Europe?
Since the beginning of the pandemic, consumers in Europe have shifted their purchasing habits in a major way, turning increasingly to online ordering for groceries. Early this year, digital grocery shopping in advanced economies made up 3 percent of overall grocery sales. Now it is up 30 percent, and that number is not shrinking even as the pandemic eases in some countries.
This rapid and substantial shift led to some pain points in the supply chain. For, example, stores in Spain had too much supply because few people were willing to leave their homes, whereas in Germany, there were shortages, especially of products like water.
What brands quickly realized is twofold: First, they need to have better real-time insights into consumer purchasing behaviors. Second, they need to be able to quickly pivot to satisfy shifts in supply and demand.
What will this migration to cloud enable the bottlers to do?
By embracing a hybrid cloud model, CCEP will have access to much more up-to-date information about all of its customers. Cloud enables greater flexibility, which will enable CCEP to scale up and down, re-prioritize production lines, and continuously reassess supply and demand to meet the needs of its customers.
Why will the bottlers still need this enhanced ability to view their customers when the pandemic ends?
There are so many kinds of markets and so much variation in demand, such as holiday seasons and weather. Plus, customers in many sectors of the economy are changing their shopping habits.
Think of what IBM offers as a single pane of glass: We let companies see across geographies and break down silos, so that they can get the visibility they need to keep their supply chains operating smoothly. Brands that work with IBM Cloud will be better able to respond to market shifts and ensure that they have more of the products consumers want, when they want them.
Why did CCEP select IBM?
IBM offers an open, hybrid cloud approach that provides organizations with the ability to select and centrally manage different computing platforms.
CCEP has chosen IBM Cloud for its ability to securely handle mission-critical applications. It’s also about the flexibility it gives CCEP to choose and integrate other computing environments as it works to migrate to the public cloud—whether other public cloud platforms, private cloud, or on-premises systems according to future priorities and needs, enabled by Red Hat OpenShift.
It is always good business practice to avoid vendor lock-in. Moreover, according to new analysis by IBM, the value derived from a full hybrid, multicloud platform technology and operating model at scale is 2.5 times the value derived from a single platform, single cloud vendor approach.
What’s next for IBM and cloud?
With $23.5 billion in revenue, IBM’s cloud business is growing rapidly and ranks only behind Amazon Web Services and Microsoft Azure’s reported revenues. We’re experiencing 30 percent growth in our strategic hybrid cloud imperative. Other partnerships announced recently that show our momentum include Bank of America, BNP Paribas, Adobe, Daimler, Caixa Bank and Banco Sabadell.
IBM is investing heavily in the areas where we see clients focusing their efforts: open innovation, security and high-value services delivered via the cloud. In addition, we are expanding our cloud footprint and expect to run a total of 12 multi-zone regions around the world by the end of 2021. This latest work with CCEP demonstrates how we are continuing to help companies accelerate their digital journeys leveraging hybrid cloud.
How has the COVID-19 pandemic impacted IBM Cloud’s growth?
The pandemic has certainly been a driver. Because of it, companies are reimagining their business models where digital is no longer merely an option but an imperative. They are accelerating their digitization and as part of that, are rethinking their workflows. With Red Hat, we have completely transformed our portfolio so clients can build applications once and run them anywhere.
If IBM public cloud hinges on security, what makes IBM more secure than its competitors?
IBM offers security that’s second to none with our Hyper Protect Services, including Keep Your Own Key encryption capabilities backed by the highest level of security certification commercially available.