Think of cinemas and the whirr of projectors, smell of popcorn and noise of people who just will not sit still spring to mind. Cloud computing, e-commerce and big data less so.
But V3 spoke to Roland Jones, executive director of technical services at cinema company Vue Entertainment, and found out that there is much more enterprise grade technology in the world of cinemas than expected.
This is seen in Vue’s use of Rackspace to provide a managed private cloud to support a website that handles ticket sales and promotions, given that Vue no longer does any external print or television advertising.
“Online sales are a crucial part of our business and have grown 30-fold over the last 10 years. While once it was quite important to have a website just to say you’ve got a website, for us it really is the link between us and the customers. We live or die by our website,” said Jones.
You might question why Vue needs a managed cloud service running virtual machines as opposed to hosting its website in a public cloud or on its own servers. Jones’ answer is the ability to flex with demand, yet retain control over how the virtualised environment is managed.
“The problem we have in the industry is nobody knows when there’s going to be a hit movie. When there’s a hit movie all of a sudden everybody wants to see it, and that causes huge spikes in demand. One week you can have 200,000 people coming to the cinema the next week 1.5 million,” he said.
“That obviously has a knock-on effect on our digital architecture and we’ve got to be able to fluctuate with that massive change in transactions, and that’s what our virtualised environment allows us to do.”
Managed cloud, hosting and services is hotly contested space, so we asked Jones why Vue chose Rackspace.
“We’ve used Rackspace for close to a decade I think, and the reason was that in the old days of the internet it was very difficult to find anybody external who took hosting and the internet as seriously as I thought they should,” he said.
Jones explained that some cloud vendors view cloud as a utility to be used passively, rather than as a service that can offer more than just outsourced hosting and infrastructure.
Rackspace provides Vue with a 24/7 service so there is always someone on hand to address any problems with the virtual environment should they arise.
This avoids the need for Jones and his IT team to have trained specialists to fix server problems during especially high traffic volumes.
Jones noted that this is even more pertinent given Vue’s relatively small IT department in the UK, and that there is a cost benefit to outsourcing 24-hour maintenance rather than have a dedicated team in house.
“When the tsunami comes they can actually help us deal with it. It’s not as trivial a service as perhaps the utility computing people would have you believe,” he said.
“I can’t see how we could run a service like this on-premise because we have just nine people at head office and six people in the field.
"Fifteen people for a cinema circuit of 84 sites is not a lot and you can’t run an overlapping shift service to support these things on a 24-hour basis, so economically it wouldn’t make sense to do it on-premise.”
Another reason for outsourcing server maintenance is the need for specialist skills for even day-to-day infrastructure tasks.
Jones wanted to avoid this internally at Vue, especially as his team also looks after the cinema hardware such as the digital projectors.
Instead he wanted the IT department to focus on tasks that explore how the use of technology can directly benefit the cinema company’s business rather than just support it.
“We are lean because we only want to do things that add value to the business internally. The utility and the day-to-day stuff that doesn’t add any value is better executed by third parties. We just need to knit those things together to add an end-to-end service for the business,” he said.
“I think being a smaller department, which is fused in with the business, makes us more part of the business and accountable to the business, [rather] than running a department with 100 people in a basement somewhere.
“I think that is quite an out-dated model now. We are more interested in outsourcing or near-sourcing stuff which other people can do and delivering the value add which is understanding what the business needs and translating that into a supplier and a system form.”
Other parts of Vue’s IT infrastructure are outsourced, including support desk and wide area network, while service and app development is ‘near-sourced’ internally.
Jones noted that in effect, the IT team provides the vision for how technology needs to be used at Vue, while the execution and support happens externally.
Control versus cloud
Vue takes a pragmatic approach to cloud adoption, making use of such services only when they meet its needs and data governance policies.
“Office 365, for example. Everyone bangs on about it: ‘Why not just use Office 365?' We chose not to do that because we wanted to continue to have control over our email for all kinds of data security reasons," Jones said.
"But also that the service that we have with the managed exchange service is not a cookie cutter. My fellow directors may need things done in certain ways or we may have constraints in terms of security or confidentially that we want to impose, and you can’t get that easily from just the cloud or utility computing. You need something as an enterprise that’s more flexible.”
Jones also highlighted that security concerns with the cloud will continue to come up in conversations around cloud migration, particularly as public cloud is easier to penetrate. This makes a managed private cloud the better middle ground in Jones’ opinion.
However, he said that moving towards the cloud is the right way for enterprises to move as long as they have control over how their cloud services and the data used in them are managed.
“We just have to have some controls on it and some brakes. It’s great that people can get access to systems and emails outside the office and at home, but you still need to have the security VPNs and the security controls to make sure you’ve got protection,” he said.
“So I’m sure there will be a general move to the cloud, but I think that bigger enterprises will be more tentative. We certainly couldn’t do this without a managed cloud, but I think it will be managed cloud for some time to come [because] we still need to maintain control.”
Pushing digital and data
Vue is also exploring the use of technology to improve relationships with customers. “We will focus in the short term on our relationship with the customer. I think in the next 12 to 18 months we will come up with a much more focused customer proposition and we will use technology to do that,” he said.
Data will be at the core of this strategy, according to Jones, and he and his team will explore how it can be best put to use rather than simply collected and stored.
“We’re traditionally a very data rich industry but not necessarily information rich. We don’t necessarily have the proximity to our customers that we’d like and I think that's going to change in the near term,” he said.
Vue already uses data monitoring tools like social network listening, but will look at taking data analysis further and deeper to glean more information from raw big data.
This will involve bringing multiple and dispersed datasets together to identify behavioural, purchasing and spending patterns.
Jones explained that this will allow Vue to be more proactive in offering extra services such as digital vouchers to customers, although he acknowledged that this is easier said than done.
“Actually building a single view of a customer is the challenge because there are so many channels now. Actually keeping track of everything and everyone’s activity [in cinemas] is the trick,” he said.
The death of cinema in the face of home viewing and streaming services has been grossly exaggerated, according to Jones, as cinemas offer more involving experiences than even the best televisions.
Jones said that the use of digital technology underpinned by a savvy outsourcing strategy will ensure that Vue continues to haul in punters to the latest blockbuster.
Jones is the latest CIO to talk to V3 following our interviews with IT chiefs from London School of Hygiene & Tropical Medicine, Volvo, Starbucks, Army HQ, Lotus F1, Eurostar, Williams F1, Trainline, the DVLA, World Bank and Oxfam.
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