cargill case study

8/10/2019 Cargill Case Study

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Case Study: Cargill

How Cargill Chose to Address the Ciscovs Microsoft Dilemma, Saving Money

While Doing So

Cisco vs Microsoft atCargill

June 3, 2014


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Problem Cargill has deployed Cisco networking and Cisco UCM for voice

for a large part of its workforce. It has deployed also Microsoft desktop software and Microsoft

Lync for instant messaging (IM) and presence for the entireworkforce.

For conferencing, Cargill has traditionally utilized third-party

conferencing providers for audio conferencing andscreen/application sharing at a high external cost.

Cisco is currently used only for dial tone but many in the

company like the concept of having a single UC app that

integrates with their existing Microsoft UC and officeapplications.

How could Cargill reduce operating costs while deploying the

best of both solutions?

Solution Cargill created a co-existence strategy using a hybrid approachinvolving both Cisco and Microsoft communications products.

Sites of 25 users or less are typically getting Lync voice (thedecision is based on the site requirements).

For larger locations, Cisco UCM is still used for voice whileMicrosoft Lync is still used for IM/presence. Lync, however, is

being used more for conferencing, largely by replacing a third-party conferencing service provider.

AudioCodes Mediant 1000 session border controllers aredeployed at the small branch offices and in the data centers

housing the Lync Server 2013 servers.

Benefits Moving 50% of the conferencing traffic away from the

conferencing service provider and toward Microsoft Lync willsave Cargill over $3 million annually.

Deploying Lync Enterprise Voice at the small branch officessaves at least 50% of the cost of deploying a Cisco solution.

These are done as part of a regular life cycle replacementprogram.

Cargill provides food, agriculture, financial and industrial products and services through

143,000 employees in 67 countries at over 1,000 processing locations. The company servescustomers in 125 nations. As one of the largest privately held corporations in the world,Cargill had 2013 revenues of $136.7 billion.



Cargill has 75 businesses organized into four major

segments including

1. Agriculture grain, oilseeds, and othercommodities of food and animal nutrition

products.

2. Food ingredients for food and beveragemanufacturers, food service companies, and

retailers as well as meat and poultry products andhealth promoting ingredients and ingredient

systems.

3. Financial risk management and financialsolutions for agriculture, food, financial, and

energy customers.

4. Industrial provide products for industrial usersof energy, salt, starch, and steel products as as

well as developing and marketing sustainableproducts made from agriculture feedstocks.

Of Cargills 143,000 employees, approximately 20,000 are knowledge workers or

information workers that require communication and collaboration solutions to perform theirjobs.

Cargill has a vast production and supply chain network spread across the globe with inworkers in nearly every time zone. The company has deployed Cisco networking equipment

and Cisco Unified Communication Manager for voice communications solutions at manyofits offices.

In 2012, Cargill rolled out Microsoft Lync to its knowledge and information worker

employees for instant messaging and presence, with some people also using Lyncs nativepeer-to-peer audio and video capabilities. The company uses other Microsoft solutions,

including Exchange, Outlook, and Office in its day-to-day operations. Cargill uses a globalconferencing service provider1for audio conferencing and Web conferencing.

Cargills conferencing costs alone total approximately $6 million annually.

Like many organizations, Cargill has communications solutions from both Microsoft andCisco, and it has had to strategize and prioritize how it would approach its communications

needs in the future with respect to PBX replacement and conferencing capabilities. The

1At Cargills request, we do not name this conferencing service provider.

Organization: Cargill

Headquarters: Minneapolis,

MN, USA

No. Employees: 143,000

Industry: Food commodities,

Agriculture, Energy, Industrial

Products, Risk Management

Other: Founded in 1865.Operations in 67 countries.Over 1,000 production

locations.


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In only seven months, from September 2013 to April 2014, the company achieved its goal

of over 50% of its conferences hosted on Lync servers, which represents over a millionminutes per week. This 50% reduction of CSP charges will generate over $3 million annually

in cost savings. Since the initial Lync pools/AudioCodes SBC deployment cost wasapproximately $1.5 million, the conferencing cost savings will pay for the deployment within

the first year of operation.

Prior to using Lync Conferencing, web conferencing users would connect their computer tothe web-enabled session while dialing-in to the conference using their desk phone. This

behavior has proven hard to change. Even after Lync conferencing went live, users wouldrely on their desk phone to dial in to the conference, or they would have the Lync Server

dial back to the desk phone. Approximately 25% of all Cargill Web conferences running onLync servers use dial up capacity. This means that of the approximately 1.3 million minutes

of audio conferencing per week hosted on the Lync servers, roughly 350,000 minutes are

from users who dial up through the AudioCodes gateways. This behavior has createdadditional Lync gateway demand in the data centers.

Fortunately, for Cargill, its AudioCodes gateways areconnected directly to its Cisco gateway

infrastructure, which provides the external PRI or SIP

trunking connectivity for Lync. This means thatadding Lync gateway capacity does not cost Cargillanything because adding trunking capacity between

the Lync Server/AudioCodes SBCs and the Cisco

gateways is an internal process, which does notrequire additional external PRIs or SIP trunks from aservice provider every time Lyncs conferencing

volume increases. Furthermore, Cargill IT can easily

add increased gateway capacity to Lync Server ifdemand changes rapidly.

In late 2013, Cargill also made the strategic decision,

again based on TCO and the needs of theorganization, to keep the main locations running

Cisco Unified Communications Manager for voicecommunications services. However, for branch

locations with 25 or fewer people, the company has opted to deploy Lync Enterprise Voicealong with Lync-compliant Polycom handsets. Cargill IT sends these locations an

AudioCodes Mediant 1000 SBC preconfigured with the dialing plan and the pointers to ActiveDirectory servers along with the handsets to the remote locations where they are essentially

plug n play2. Cargill puts no boots on the ground at the small locations. By focusing onsmall locations, Cargill can replace PBXs as part of its normal PBX lifecycle process, rather

than launching widespread upgrades that would require a project manager and third-partyresources with local resources at these small branch locations.

2If a location needs local survivability, Cargill configures the Mediant SBC as a Lync Small BranchAppliance prior to shipping it.

Were not sure we have

resolved the Cisco versusMicrosoft question: it is still the

elephant in the room. But, we didincorporate, or bring the two

together. We chose to keep theinitial investments and re-align

our 0 5 year strategy on voiceto operate in a hybrid

environment. This is a solutionthat works for us, for now, but we

dont want to leave the impressionthat we found the silver bullet.

Joe MilledgeVoice Architect Cargill LyncSolutions, Global IT End User

Services



Cargill also reports that at these small locations, it can install Lync Enterprise Voice licenses,

the phones, and the AudioCodes Mediant SBCs for approximately half of the cost ofupgrading or replacing the old PBX with a new one from Cisco3.

The Solution is Good, but not Perfect

Lync Conferencing Requires More Bandwidth

While this hybrid arrangement with Cisco and Microsoft is generally working well for Cargill,

there are a few areas of concern. The first is the bandwidth that Lync conferencing uses.This bandwidth usage was higher than Cargill IT expected from the Lync conferencing

solution.

Some Cargill locations have low bandwidth wide area network (WAN) connections, and theselocations immediately noticed network performance issues when the switch from the CSPs

conferencing platform to Lync conferencing occurred. Lync screen-sharing and video toolsseem to be particularly high bandwidth-consuming applications, but voice usage also seems

high when compared to the CSPs solution.

To verify the bandwidth issue, Cargill IT personnel automated a Web conference so that itcould be run identically using both the CSPs Web conferencing platform and Lync. They

then put in a network sniffer so that they could measure the bandwidth consumed.

As illustrated in Figure 1 below, Lync clearly consumes more bandwidth for Webconferencing than does the CSPs offering, and the large spikes show that Lync conferencing

bandwidth utilization can go as high as an HD video stream. Yet in this instance, there wasno video used. Lync supports bandwidth controls for audio and video as well as call

admission control (CAC), but there are no administrator controls for Web conferencing

bandwidth.

For most Cargill locations, the network has been over-provisioned so that the additional

bandwidth required by Lync is not disruptive; however, at least one location managerdetermined that his group would continue using the CSPs platform because Lync

conferencing adversely affected applications running over the network4.

3One way Cargill keeps the cost for these small branches down is that it uses a regular live cyclemodel and process for equipment replacement, which does not require creating a formal, rigorousproject with a project manager.4Microsoft is aware of the bandwidth disparity between the CSPs Web conferencing platform andLync. It has not yet announced a solution or workaround, but we believe Microsoft is working on it.



Figure 1. CSP conferencing bandwidth vs Lync bandwidth comparison at Cargill.The two curves for each platform represent bandwidth from two different

endpoints viewing the Web conference. (Source: Cargill, and adapted for this casestudy)

Long Distance Dialing Into and Out of Conferences

A second issue that has arisen is the cost of the long distance calls when using Lync

conferencing. When dialing into the CSPs bridges, there were usually local numbersavailable that would mitigate the long distance charges. With employees dialing directly intothe Lync servers for audio conferencing or the Lync servers dialing out to the employees

phone, these calls are all going over the PSTN, and they are often international calls.

Cargills agreement with its global long distance provider can mitigate these costssomewhat, but the company will be looking to move some calls on-net, and it will beinvestigating a least-cost routing solution.

Not Quite a Unified User Experience

Lastly, running both systems in parallel does not provide a full unified communications

experience. Voice communications, for example, are not integrated with the presence and

IM solution. Thus, users cannot escalate an IM session to voice using click-to-call, nor dothey get phone presence indicators (on hook/off hook). Nevertheless, this solution asdeployed works well for Cargill and is expected to meet the companys needs for some years

into the future.



Cargills initial goal was to move 50% of its audio and Web conferencing to Lync, and thiswas achieved in just seven months. Even with the increase in long distance costs, the

company will now save at least $3 million in conferencing costs annually (with $1.5 millionsubtracted the first year for Lync Server pool deployment).

In addition, when one of Cargills many small locations needs a PBX refresh, deploying Lync

Enterprise Voice and AudioCodes SBCs instead a new Cisco small business PBX reduces thecost of these refreshes by at least 50%.

Finally, Cargill has managed to find a happy mediumin the Cisco vs Microsoft battle by using Cisco for

voice at large, or voice-complex locations and

Microsoft for IM, Presence, and conferencing

everywhere. At smaller locations, implementing theLync option for all communication needs is provingcost-effective. Proponents for both Cisco solutions

and Microsoft solutions may find some satisfaction inthis co-existence deployment. Given Cargills size

and global diversity, it is not a major burden on ITresources to run both solutions in parallel.

1. One way to realize the relative benefits of both Cisco and Microsoft is to run bothsolutions in parallel.

2. Microsoft Lync can be used for IM, presence and conferencing, while Cisco can be the

primary voice platform.

3. Operational efficiencies can occur if Lync Enterprise Voice and an appropriate SBC is

deployed in smaller branches. In these locations, a full unified communicationsexperience is possible.

4. Working with a knowledgeable partner has been important to Cargills success.Cargill used a very knowledgeable partner while designing and deploying the Lync

pools and while troubleshooting Lyncs higher bandwidth consumption duringconferencing.

5. Cargill has managed its communications deployment by striking a reasonable balancebetween Cisco and Microsoft solutions. In this way, Cargill has not needed todisenfranchise any employees who may be impassioned and articulate about their

communication preference between Cisco and Microsoft.

The low hanging fruit is the local

PBX that is at end of life or that isfailing.

Joe MilledgeVoice Architect Cargill LyncSolutions, Global IT End User

ServicesCargill


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D i s c l o s u r e o n Ed i t o r i a l Co n t r o l

KelCor has not been compensated by any third parties to write this case study. It was written independently, and

KelCor has maintained full editorial control throughout.

A b o u t t h e A u t h o r s

Brent Kelly is Principal Analyst at KelCor, Inc. where he focuses on the intersection of business technologiescomprising unified communications, social networking, video, cloud services and mobility. Dr. Kellyprovides strategy and counsel to key client types including Chief Information Officers, Chief TechnologyOfficers, investment analysts, VCs, technology policy executives, sell side firms and technology buyers.Dr. Kelly has been an independent consultant and analyst since 2001, writing hundreds of articles andpresenting at numerous public and private events. He has served as the Vice President of Marketing forSorenson, an early innovator in the IP communications space, and as the CEO of a privately heldmanufacturing company. Prior to this, Dr. Kelly was part of the team at Schlumberger that built the devicesIntel used to test Pentium microprocessors. He also led teams developing real-time data acquisition andcontrol systems, and adaptive intelligent design systems in several Schlumberger Oil Field servicescompanies including four years of R&D experience in Europe. He has a Ph.D. in engineering from Texas

A&M University and a B.S. in engineering from Brigham Young University. Dr. Kelly is serving in his secondterm as an elected official in his community.

Matt Krebs is a research analyst at KelCor focused on human/technology interaction. His primary interestis in technological innovation, both hardware and software, and the emergent technosocial systems andpossibilities that attend innovation. His recent research, supported in part by Intel Labs, focuses on 3Dprinters in use in FabLabs in Japan. This work addresses changing notions of ownership, value, andexpertise in the context of information and communication technologies. Mr. Krebs is a Ph.D. candidate inthe department of anthropology at the University of Kentucky where he is specializing in ethnographic andsocial network analytical research methods. He was previously the director of the Japan/America Societyof Kentucky (JASK) where he worked with Toyota, Hitachi, and other auto-industry OEMS and suppliers.At JASK, Mr. Krebs redesigned business processes and customer relations to incorporate new web-presence and communication software. He has also worked for a regional development agency in Kentucky

(BGADD) where he developed its international trade consulting business and arranged a region-wide studyof business clusters. Mr. Krebs has an M.A. in international commerce and diplomacy (University ofKentucky) and a B.A. in international studies (Brigham Young University).

A b o u t K e lCo r

KelCor (www.kelcor.com) is a specialized consulting and analyst firm with a passion for providing clientsatisfaction through product and service excellence. We have a laser-focus on the businesscommunications market, emphasizing those products and services that are proven to accelerate anorganization's business processes.

We provide value to our end-user and vendor clients by offering an unbiased, 360 view of the unifiedcommunications and collaboration marketplace. We prepare research reports, vendor profiles, market

forecasts, white papers, case studies, and presentations designed to inform, educate, and assist vendorsand end users with strategy, tactics, and markets. KelCor data and reports provide more detail andanalysis about collaborative markets, offerings, and strategies than anyone. The depth of our reports andour ability to discern key market trends significantly differentiates us from any other consulting and analystfirm you've ever worked with.

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