Coinstar streamlined delivery and cut costs by 40%
Migration from legacy colocation gear to VMware Dedicated vCenter and hosted SAP services helped Coinstar cut IT costs by 40% and transform its IT service approach.
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Industry
Retail
Challenge
Coinstar needed to separate IT services from its parent company and transition to a more modern, scalable managed environment, while achieving cost savings.
Solutions Private Cloud Platforms SAP ERP, RackConnect Global, VMwareOur customer
Coinstar is one of the world’s largest fully automated networks of self-service kiosks for converting change into cash, e-gift cards or charitable donations. About 25 years ago, Jens Molbak, then a graduate student at Stanford University, struggled to find a convenient way to cash in change — so he created one.
Today, his green Coinstar self-serve kiosks allow thousands of consumers to turn their change into dollars every day. Since its inception, Coinstar has grown across the U.S. and into the UK. There are also plans to expand into Spain, France, Italy, Germany and Japan.
Concurrently, the company is focusing on another underserved population of cash-based users who want access to alternative financial servies, like bill payment.
Following a corporate split, the Coinstar IT team needed to find a way to plan and execute a large-scale migration project while empowering its core business to operate as efficiently as possible with a smaller team.
“In terms of the providers who are able to manage an infrastructure-as-a-service and to accommodate relatively bespoken needs, Rackspace Technology sticks out as the clear leader in the space.”
The obstacles they faced
An acquisition of Outerwall resulted in a three-way split of IT teams from Outerwall into Redbox, ecoATM and Coinstar. After the split, Coinstar was left with a team of eight employees supporting a legacy colocation environment that was plagued with old contract relationships that had exceeded their initial hardware maintenance contract terms.
“When devices failed, we would have somebody drive from the office, down to the data center, and replace the device,” said Jason Friedlander, CTO at Coinstar.
Realizing this model wasn’t sustainable, the company looked toward changing its IT service approach, migrating infrastructure and preparing for future growth.
The separation of Outerwall properties required a large-scale migration. Due to old maintenance contracts, Coinstar was spending hundreds of thousands of dollars for its monthly IT needs (e.g., colocation, maintenance contracts, network) and was eager to move into a more efficient, cost-effective environment. Coinstar was already using VMware and had consistent usage patterns, so Rackspace Private Cloud Powered by VMware was the obvious choice.
“I had never worked with Rackspace Technology and time was short. We had 70 days to migrate our SAP environment. Other providers told us ‘no,’ but Rackspace Technology helped us rethink our approach. Its application expertise was refreshing.”
How we helped
Rackspace Technology helped Coinstar move its business operations out of legacy systems over a tight, five-month timeframe. This allowed the company to leverage newer systems with more resources and lower maintenance costs, cutting monthly spending over the previous self-managed colo environment.
Coinstar opted to use the dedicated vCenter offering for the fastest and most cost-effective path to get out of its existing colo environment. It also engaged the Rackspace Professional Services team for VMware SRM training so that the Coinstar team could complete the migration using its in-house team.
By working with Rackspace Technology to design an optimal migration plan, Coinstar was able to execute the massive migration, which included 1,000 VMs powering everything from internal IT to back-end and kiosk-related critical applications, as well as the company website.
By leveraging its unique IT-as-a-service model, Rackspace Technology was able to reduce Coinstar’s IT spending by 40%. Also, the team restructured Coinstar’s IT delivery approach, reduced application support burdens and successfully managed a large-scale migration.
“The Rackspace Technology management approach brokered a lot of flexibility and increased availability of staff augmentation for me,” said Friedlander.
Coinstar was able to efficiently migrate 1,000 VMs powering everything from internal IT to back-end and kiosk-related critical applications.
What we achieved together
As a result of the move, Coinstar has achieved independence from legacy systems, improved business operations and reduced IT costs. Post-migration, Coinstar faced an expiring hosted SAP contract. Support from its previous provider was limited, rigid and expensive. Instead of re-signing, Coinstar sought out a lower-cost option with the same service scope as its existing SAP services.
Coinstar plans to leverage hosted SAP with Basis and Functional Support at Rackspace Technology. Rackspace Technology support for SAP provides a simplified support system with no hidden fees. The service will not only save Coinstar thousands each month in support costs but will also streamline management from juggling three different entities for service delivery down to one relationship with Rackspace Technology.
With Rackspace Technology, Coinstar can consolidate services with one provider and eliminate common billing and support issues that arise with managing multiple providers for infrastructure and applications.
About Rackspace Technology
Rackspace Technology is a hybrid, multicloud solutions expert. We combine our expertise with the world’s leading technologies — across AI, applications, data and security — to deliver end-to-end solutions. We have a proven record of advising customers based on their business challenges, designing solutions that scale, building and managing those solutions, and optimizing returns into the future.
As a global hybrid, multicloud technology services pioneer, we deliver innovative capabilities to help customers build new revenue streams, increase efficiency and create incredible experiences. Named a best place to work, year after year according to Fortune, Forbes and Glassdoor, we attract and develop world-class talent to deliver the best expertise to our customers. Everything we do is wrapped in Fanatical Experience® — our obsession with customer success that drives us to help each customer work faster, smarter and stay ahead of what’s next.
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