Kmart Australia Accelerates Migration to AWS Using Micro Focus Solution

Kmart Australia Limited (Kmart) was spending millions of dollars each year on a mainframe that housed its core merchandising system and that was inflexible and difficult to maintain. Migrating Kmart’s mainframe applications to the cloud was going to be a huge but necessary task, and the transition needed to be completed quickly so Kmart could avoid renewing its contract with its mainframe provider. Using Amazon Web Services (AWS) and a solution provided by Micro Focus, an AWS Partner, Kmart migrated its mainframe applications to the cloud in 14 months, saving millions of dollars and increasing its agility and ability to innovate for the future.

Kmart is a leading product development company and a trusted retailer with more than 300 stores throughout Australia and New Zealand. According to market research company Roy Morgan, Kmart was ranked in the top 5 most trusted brands in Australia in 2021. Kmart ran over 30 mission-critical applications—including product registration, order replenishment, and supply chain systems—on a mainframe system that had been in place for over 25 years, with some legacy code still running from the earliest days of the system. The mainframe was costly, and some mainframe systems were still run using green screens and simple terminals.

Kmart needed to migrate from its mainframe system to reduce its costs and to keep up with the modernization and expansion of its business. “We felt we could respond faster to changing business needs if we virtualized our mainframe environment in the cloud,” says Upinder Aggarwal, group head of engineering and delivery (merch and inventory IT) at Kmart. “We were also aware that mainframe development skills are in short supply and that with a modern development environment, it would be easier to attract new talent. We felt we should be more efficient and productive, which in turn would give us cost efficiencies that we could pass on to our customers, reducing their shopping bill.”

Kmart had already been using AWS for data warehousing since 2016, and the company planned to migrate its mainframe applications to AWS beginning in 2017. Although Kmart wanted to completely redesign its applications to be cloud native on AWS, the redevelopment process was going to continue beyond the end of Kmart’s contract with its mainframe provider. To avoid getting locked into an expensive, multiyear mainframe contract, Kmart searched for alternative solutions to accelerate the migration. It selected Micro Focus, which offers a solution that runs on AWS with a mainframe-compatible execution environment to make it simple to migrate mainframe applications to the cloud. In March 2019, Kmart began migrating its core merchandising system off the mainframe and onto the Micro Focus solution on AWS with the help of Infosys, another AWS Partner.

In May 2020, Kmart’s mainframe applications went live on the Micro Focus solution on AWS, and the mainframe was decommissioned shortly thereafter. The mainframe had operated at approximately 500 million instructions per second and had consisted of COBOL, JCL, and PL/I applications and older backend databases. The migration moved 34 applications comprising 19,000 components, 1.4 TB of data, around 4,000 job instructions, and over 900 user screens. Micro Focus’s solution uses scalable services such as Amazon Elastic Compute Cloud (Amazon EC2), which provides secure and resizable compute capacity for virtually any workload. The solution also uses Amazon Relational Database Service (Amazon RDS), a service that makes it simple to set up, operate, and scale a relational database in the cloud. Only 1 day after Kmart’s merchandising applications went live on Micro Focus and AWS, batches were running successfully overnight, data flowed to other Kmart systems, and reporting ran successfully. The time it took to replicate the database decreased from over 7 hours to less than 1 hour, and API execution sped up from 3.5 seconds to 1.2 seconds.

Kmart has reduced its annual operational costs now that it has moved off its legacy mainframe. Using AWS and Micro Focus’s solution, Kmart also has better visibility into its applications and more flexibility to integrate the merchandising system with systems in other parts of the business. “We achieved the scalability that we needed and improved our fault tolerance and disaster recovery capabilities using Micro Focus’s solution to deploy our mainframe applications on AWS,” says Aggarwal. Product data that used to be scattered across several different systems is now centralized, which makes it simpler for Kmart to analyze the data and use it to improve its business operations.

Micro Focus’s solution also uses Elastic Load Balancing (ELB), a service that automatically distributes incoming application traffic across multiple targets and virtual appliances in one or more Availability Zones. Amazon FSx for Windows File Server provides fully managed, highly reliable, and scalable file storage to the environment. “We are delighted with the outcome of the mainframe virtualization,” says Aggarwal. “Not only has this given us annual operational cost savings of millions of dollars, but the collaboration between Micro Focus, AWS, Infosys, and ourselves has turned Kmart into a technology-enabled business, ready to grow and take on new routes to market and business models while always delivering the best products at the best price to our customers.”

Kmart will use the money saved by migrating its merchandising applications to AWS to invest in further technological transformation. The company is creating simple, modern web interfaces for employees to perform tasks such as conducting bulk orders that they previously made on a green screen. Kmart plans to redevelop its applications to be cloud native on AWS and implement machine learning solutions on AWS to improve the Kmart customer experience. “Using the new infrastructure, we use machine learning models to more accurately allocate stock to stores, correlating sales directly with seasonal stock projections and loss analysis,” says Aggarwal. “We weren’t able to do this until Micro Focus helped us unlock the valuable data we have.”