New Zealand retailer Warehouse Group is migrating the bulk of its operations to Microsoft Azure in a multi-year project aimed at creating cost savings worth millions over the next three years.

With more than 750 on-premises servers, and infrastructure reaching the end of its useful life, Warehouse Group faced ongoing costs for maintenance and replacement of existing technology. As part of its business optimisation, it has partnered with cloud migration specialist Lab³ to move its applications to Azure public cloud. This will no longer require the company to manage its own infrastructure, providing predictability around cloud costs with greater resilience and security.

“It’s great for our stores to be able to rely on 24/7 accessibility, and no longer be reliant on a single data centre on our premises,” said Ankit Gupta, Warehouse Group general manager. “Risk reduction is paramount and, if anything happens to a location in the public cloud, our connection will automatically switch to an alternative site, giving us better resilience and keeping our systems going.”

Lab³ and Warehouse Group designed the migration process to be staggered over 12 months, reducing disruption to stores. Gupta said the key objective was to ensure the business’ more than 12,000 employees didn’t notice any difference throughout.

“Microsoft recommended Lab³, which enables us to use AI-powered migration tools like Dr Migrate, which uses automation to identify key applications to move to Azure first and achieve the best cost savings, rather than reinvent the whole process ourselves,” he said. “It’s much faster, easier and cheaper, which perfectly aligns with our ongoing optimisation strategy.”

The move will also enable Warehouse Group to take advantage of Lab³’s expertise and IP to accelerate the use of Microsoft’s product suite, including the latest AI technology. The company is already piloting the use of Azure MLOps machine learning to optimise product pricing, as well as generative AI to reduce manual updates to the master product database.

“Warehouse Group has always been recognised for its competitiveness in the market, and that’s exactly what this partnership will enhance,” said Kerry Purcell, CEO of Lab³. “The cost predictability associated with its cloud transformation in Azure will help Warehouse Group optimise retail pricing and securely adopt innovative AI technology, putting it in an extremely strong position for the next decade and more.”

Sustainability is also a key factor in the shift to Azure public cloud. The Microsoft New Zealand North cloud region will be up to 98 per cent more energy efficient than standard on-premises infrastructure, and the Lab³ Dr Migrate tool will let Warehouse Group monitor the carbon footprint of its cloud usage.

“Right now, every business, especially in retail, is being challenged to do more with less, understand their customers better, keep up with the rapid development of AI and be more sustainable,” said Vanessa Sorenson, managing director of Microsoft (www.microsoft.com) in New Zealand. “It just makes sense to share the load and, with our New Zealand cloud region being powered by 100 per cent renewable energy from day one, we’re well placed to help local organisations reach their goals faster. We’re thrilled to support one of Aotearoa’s most iconic and environmentally conscious brands to adapt for the future and level up their progress on sustainability even further.”

The migration process will occur in multiple stages. Around a third of Warehouse Group’s applications have already moved to Azure ahead of the local Microsoft cloud region opening later this year.

Warehouse Group (www.thewarehouse.co.nz) is one of New Zealand’s largest retailers, with a history of serving Kiwis for over 40 years. Its brands include The Warehouse, Warehouse Stationery and Noel Leeming. From its beginnings in 1982, it has grown to $3bn in sales in 218 stores across Aotearoa New Zealand and employs around 10,000 people.

Lab³ (www.lab3.com.au) empowers government and business to accelerate, transform and grow through controlled, automated and scalable cloud technology. With one of the largest Azure engineering practices in Australasia, it delivers cloud, AI and cyber security for modern businesses.