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How the cloud saved a retailer

Resilience took on new meaning for the Fozzy Group during the Russian invasion of Ukraine, writes ARTHUR GOLDSTUCK

The Russian invasion of Ukraine has tested the resilience of people, infrastructure and systems in remarkable ways. The country had become a high-tech hub, and it was anticipated that war would bring innovation to an end.

But, just as the pandemic had taught businesses how to use digital platforms to become more resilient, so did the invasion demonstrate new meanings of resilience.

A Ukrainian cloud computing case study was the surprise standout at a conference hosted in Barcelona by VMware, a global leader in cloud management systems.

At the annual VMware Explore event, the company revealed it had helped customers move 1,435 tebibytes of data from Ukraine to more secure locations outside the country. The users included some of the country’s largest banks, public institutions, suppliers of energy and utilities.

But it was how the cloud was used inside the country that made the biggest impact. Fozzy Group, one of Ukraine’s largest  industrial holding companies, faced disaster in its chain of 750 retail outlets.

When Russia overran large parts of southern and eastern Ukraine in February, leading to the displacement of 8-million people, Fozzy lost $75-million worth of goods and assets as a result of looting and destruction. Its supply chain was in tatters.

A hundred stores have since reopened in territory recently liberated by Ukraine, but 87 remain closed or abandoned. 

Unlike the South African experience of riots and looting of businesses last year, there is no immediate prospect of returning to business as usual. And along with the attacks on the ground, the country’s institutions face an ongoing barrage of cyber attacks from Russia on their computer systems.

“The war is one of those situations you cannot be ready for,” says Ivan Slavioglo, Fozzy vice president of IT. His department suddenly faced the prospect of the company’s Ukrainian data centres being targeted by Russia. 

This would have meant not only systems going down, but what was left of the company’s supply chain grounding to a halt. As Slavioglo put it, stocked shelves rely on a complex supply chain and logistics system. No IT means no deliveries.

“This was not a theoretical risk but a real risk,” says Slavioglo. To add to the challenge, the war meant IT specialists were in short supply, both due to a massive brain drain and the demand for soldiers.

Slavioglo realised the company had to replicate its data and apps outside the country. 

Within weeks, Fozzy Group deployed VMware Cloud Disaster Recovery and replicated all critical data and servers in the cloud. To achieve that, it had to “spin up” 2,000 virtual machines and store 400,500 Terabytes of data in the cloud. Nearly 80% of its services are now virtualised, meaning the company does not depend heavily on physical IT infrastructure on the ground.

It also means that, if the organisation’s data centers suffer physical or cyber attacks, the company can switch over to virtual machines with little disruption.

Once Fozzy was able to secure much of its supply chain in this way, it turned its retail chain into a humanitarian network.

Kharkiv supermarkets sheltered displaced persons. More than 1,300 tonnes of food and basics were donated to Ukraine’s defence forces, hospitals and orphanages. A further 500 tonnes of foreign aid was stored and distributed through its warehouses.

Citizens rallied to the cause, arriving at stores as volunteers to assist with sorting, distribution and handing out food and essentials.

“We’ve made it our mission to ensure that every given day Ukrainian families have enough food on their tables,” says Slavioglo.

Astonishingly, the company resumed online retail by April.

“Our employees are working day and night at great risk to provide all the basic goods that are needed for our civilians. We’ve adapted quickly.”

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