Xero completes two-year AWS migration project

Cloud accounting firm Xero has reached the end of its two-year migration to Amazon Web Services.
Written by Asha Barbaschow, Contributor

New Zealand's Xero has reached the end of its two-year migration to Amazon Web Services (AWS), leaving its legacy environment and relationship with Rackspace behind.

According to Duncan Ritchie, Xero chief platform officer, the company is in its final stages of the journey, with all of its customers already migrated over to the AWS environment.

"For all intents and purposes, we've basically migrated and are fully running on AWS now," Ritchie told ZDNet. "We've just got a couple of our small supporting apps that we're moving at the moment, and that will all be done in the next couple of weeks -- then there's just some final decommissioning of our old environment left."

Upon completion, Xero will have switched 59 billion records over the past 12 months to its new AWS environment, and a total of 1.4 petabytes of data.

At the same time, the New Zealand-based company added more than 260,000 subscribers. Ritchie explained that Xero surpassed 860,000 customers and shipped more than 1,400 product updates and features before it had completed the migration.

It was not all smooth sailing for the transition, however. Ritchie explained that aside from planned maintenance, Xero experienced some platform stability issues throughout the migration, with some unexpected outages impacting customers.

"Most of that has settled down now, so [it was] really as a consequence of the scale of what we were doing and the complexity of the migration," he said.

"My advice to anyone that's taking on this sort of migration would be to work closely with AWS and their partners to get the support and best practice."

Ritchie said the key benefit of moving to AWS is the flexibility it will give for the company's development life cycle, adding that it will provide Xero with the ability to "consume" a lot of services from AWS rather than designing and building that infrastructure internally.

The decision to go with AWS was not made spontaneously, and Xero looked into a number of other options, Ritchie said.

"We looked at pretty much every option, from building our own environment in a collocated facility using a provider like Rackspace or moving to a cloud product like AWS, and the conclusion we came to was that we would have far better agility on a cloud platform like AWS than we would have building our own infrastructure," he said.

"The advice we got at the time was that building our own infrastructure would be lower cost, but significantly worse for us in terms of flexibility, so it was far better for us to run on a cloud environment where they were investing substantial amounts of money and time into making their services robust and flexible rather than us having to do the work ourselves.

"AWS in a lot of ways is very similar to us; they're a very innovative company, fast paced, they make multiple product releases every week, they're moving and innovating at a very high pace, and by using a partner like AWS we get to leverage that innovation."

When Xero CEO and founder Rod Drury announced that his company would be moving to AWS, it was without his usual fanfare. Drury slipped the news in a presentation he gave at an AWS Summit in Auckland early last year and was tight-lipped on the exact specifications.

Xero had been operating on the Rackspace Managed Hosting and Private Cloud solutions since March 2008, moving to a new hosting environment for its platform-as-a-service needs in 2013.

Speaking with ZDNet in September, Drury said he was glad he made the decision to migrate to AWS, especially after seeing the company process $1 trillion worth of data in 2015 alone.

"If you want to be on the lowest cost to serve and get the best margin, you have to be on one of these platforms," Drury explained. "More importantly, we cleaned up that trillion dollars worth of transactions, so we can now start applying machine learning and artificial intelligence to all of that data to do some cool things.

"It's kind of neat for me, because while it takes a long time to get that infrastructure and build all that piece, the fun you can have now by applying technologies to that scale is really exciting."

In announcing Xero's financial results for the first half of FY17, Drury attributed the company's NZ$43.9 million net loss after tax to the two-year AWS transition project.

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