How guitar giant Fender struck the right note with AWS and SAP

Chris Middleton Profile picture for user cmiddleton January 20, 2022 Audio mode
Summary:
In one weekend, Fender migrated its production systems to the cloud to help millions of people follow their dreams. CIO Michael Spandau explains how.

guitar

Jimi Hendrix, David Gilmour, Kurt Cobain, Nile Rodgers, Jeff Beck, Stevie Ray Vaughan, Johnny Marr, George Harrison, Joe Strummer, Buddy Holly… just some of the countless legendary musicians who have made history with a Fender guitar. Alongside rival Gibson and a handful of other brands, these are the makers that even non-musicians have heard of, and they fill the dreams of young and old alike.

That’s no idle claim. In COVID year 2020, 16 million Americans picked up a guitar for the first time – that’s nearly five percent of the total population. According to Fender, 72% of new players are aged 17-34: proof that young people are not just focused on electronics. These startling figures come from Michael Spandau, Senior VP of Global IT and CIO of the Fender Musical Instruments Corporation (FMIC). It suggests that a powerful desire for self-expression had been bubbling beneath the surface, just looking for time and opportunity.

Online instrument retailers saw a huge boost – unsurprisingly in lockdown – but Fender’s own sales jumped 17% year on year in 2020 to hit a record $700 million, despite the company having been forced to close some factories before the pandemic hit. According to information sent to me by the company, guitar sales overall “nearly doubled” in 2021. Meanwhile, the Fender Play app for beginners saw a 600% increase in users to 900,000 in 2020, 45% of them female.

So, the global crisis didn’t just push people online, it also helped connect them with an analog passion, with something tangible and tactile – after decades of pundits claiming the electric guitar was over.

Cloud focus

But Spandau’s own focus has been the cloud, to support the internal functions of the global business that Leo Fender founded in 1946, helping to kickstart the post-war explosion of youth culture. FMIC was an early adopter of Amazon Web Services’ (AWS) cloud platform, under Spandau’s guidance. He says:  

 I like to say that we were one of AWS’ first customers. It’s something that I strongly believe in: I want to be less and less in the infrastructure business, and over many years, we’ve moved many production loads into the AWS cloud. We have a cloud-first strategy at Fender.

But for a manufacturing business that has famously had factories in the US, Japan, Mexico, and elsewhere – players love to discuss the differences between guitars from each one – and with a global brand that is both direct and indirect, ERP is a big deal for Fender. Spandau explains: 

Though we adopted the cloud very early, when it came to our SAP systems I was [at the time] just not ready to make that call. It's our mission-critical system. The whole nuance of that system is we have a global footprint, with offices in the US, Europe, Japan, and Australia. They only use SAP – for manufacturing, for audit to cash, for procure to pay, finance, logistics. It's critical to us.

But Spandau did change his mind about putting these mission-critical systems in the cloud:

Two years ago, we were faced with a significant business challenge. On one side, 16 million new players were picking up the guitar [from all manufacturers, not just Fender], but on the other, our SAP landscape was ageing. We were due for a hardware refresh. So, I made the call to move SAP into the cloud. It was just something we had to do.

But for a global business that relied on SAP, the shift was both massive and fast, taking place over a single weekend in August 2021. Spandau recalls:

We knew we had a maximum three-day window to move our production system into the cloud. So, we knew we had to find a service provider that had that technical expertise. AWS suggested that we talked to [SAP managed services provider] Lemongrass. Right from the get-go, they demonstrated and convinced us that they had the deep technical knowledge.

The migration included the data itself, moving to the HANA database on SAP, and also upgrading the SAP software. All of that in a three-day window over a weekend, a very complex migration. It had to be just three days, as the company was not able to manufacture while it was being conducted...Our challenge was finding an ICT company with the technical expertise. We had talked to quite a few, but I never felt that those companies had the skills to do it within the constraints that we have.”

Hitting the right chord

There have been tangible benefits been for this 75-year-old business, Spandau says:

We immediately saw improvements from a performance perspective – literally the first day after migration, certain batch jobs that used to run in several hours were now within minutes. And there was a significant uptick in performance on the reporting side. Drill-down functionality that in the past would take two or three minutes was now sub seconds, which had a significant impact on user efficiency and our ability to do context analysis.

Something else I appreciate is the ability to scale up and down. So, we conducted the migration on very large instances that AWS offers, because we wanted significant horsepower to support the migration. But once the migration was done, that additional horsepower wasn’t required anymore so we could just downsize the system. That's simple to do within the AWS environment, but very difficult with your own on-premises hardware.

There are still a few systems running on premises – a few production loads – but they too will be migrated over. As for other future plans, Spandau has several developments in mind: 

I'm looking forward to using AWS tools such as machine learning and artificial intelligence to analyse our SAP data sets. SAP is a rules-based engine and we do complex reporting out of it, so we look forward to applying machine learning algorithms to analyse our SAP data sets and get insights that we just don't get today.

Operational analysis, lead-time analysis – with the supply chain issues we and most manufacturers have had, such as the time it takes for containers to ship from Asia to Long Beach. It takes time and effort, but it can be done much more efficiently with machine learning tools.

Former Deloitte ERP specialist Spandau joined Fender in 2005, so has seen the highs and lows of a business that is not just about strings on elegant planks of wood, but also amps, effects pedals and, increasingly, apps, virtual instruments, and the interfaces, plugins, and digital audio workstations (DAWs) that musicians use to record their instruments onto laptops and mobile devices.

In November 2021, privately held Fender announced an agreement to merge with recording equipment maker PreSonus Audio Electronics Inc, subject to regulatory approval, a deal described as a Fender acquisition. Spandau says:

Since inception Fender has created tools to support artists. And the way we're advancing technologically, from our digital arm to the technology in our analog products, and the way the industry is evolving – especially during the pandemic – players are creating music differently. As well as plugging into an amp, they’re also plugging into an interface, using virtual amps and effects.

We want to support the people who are creating and recording music, so we envisage this as a continuation of a seamless ecosystem. We are supporting an extra lineage in music creation.

He concludes: 

Leo Fender once said that all artists are angels, and it was his job to give them wings to fly. We are just continuing that vision.

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