FedEx is set to fully-embrace the cloud, and in so doing, will save $400 million a year in operating costs.
As DCD reports, FedEx is going to retire all of its remaining mainframe computers and close its data centers before the end of 2024. Instead, the company will operate solely in the cloud, which parts of its operations already rely on through contracts with Oracle Cloud and Microsoft Azure.
Rob Carter, FedEx CIO, explained the decision during the FedEx investor day, "We’ve been working across this decade to streamline and simplify our technology and systems," he said. "We’ve shifted to cloud...we’ve been eliminating monolithic applications one after the other after the other...we’re moving to a zero data center, zero mainframe environment that’s more flexible, secure, and cost-effective."
Carter went on to explain that there's 20% of FedEx's existing mainframe footprint left to retire. After that, there's applications that need moving from the company's remaining data centers to the cloud. Although it's unclear how the calculations were done, Carter finished by saying, "While we’re doing this, we’ll achieve $400 million of annual savings."
Depending on the setup, shifting from mainframes and specific data centers to a distributed cloud system should add a lot of resilience to FedEx's worldwide operations. The company could also see some speed improvements for its international operations if they are currently relying on US-based data centers and hardware. One thing is for sure, though, both Oracle and Microsoft will be very happy about this decision.