Massive miner Rio Tinto to shift SAP and other applications to public cloud

£50bn company commits to a public-cloud-first IT strategy in a bid to save money

Rio Tinto, the FTSE-100-listed mining conglomerate valued at £50bn, has committed to a cloud-first strategy as it bids to cut costs following a fall in the price of commodities, particularly iron ore.

The Anglo-Australian mining company, founded in 1873, announced its strategic shift this week as it unveiled a partnership with services company Accenture, which also helped implement its SAP enterprise resource planning (ERP) system, servicing more than 29,000 users.

"Rio Tinto is on an ambitious journey to a world-class IS&T delivery model that is innovative, adaptable and cost-effective, fully supporting our business priorities and group operating model," said Rio Tinto Group CIO Simon Benney in a statement.

He continued: "We selected Accenture to help us manage this transformation based on its global delivery capabilities, its vision for the intelligent business cloud and its ability to support our digital transformation programme."

The statement added that the shift was explicitly intended to save money. "Rio Tinto expects to directly benefit from significant cost savings through increased business agility and cost flexibility inherent in cloud services, and from continued lower infrastructure prices in line with cloud economic trends," the company claimed. "The solution is based on a platform for innovation - including a co-located innovation centre in Singapore - and a long-term commitment to partnering."

Accenture's approach to cloud is to act as a broker, managing cloud services from a number of providers on behalf of its clients. That might mean private cloud implementations, if that's what the client wants, but Accentures's Rachael Bartels, managing director for global mining at Accenture, believes that organisations will most likely adopt a public-cloud strategy.

"Our approach is what can go public is going to go public," she told the Wall Street Journal.

Paul Haswell, a partner specialising in technology at law firm Pinsent Masons, said that the deal with such a large company demonstrated how far cloud computing had come.

"Cloud promises significant cost savings, but this tends to only materialise where an organisation's IT needs a variable and there is a strong relationship with the cloud vendor," he said.

He continued: "The risk associated with cloud solutions, in particular the security risk, will not have been underestimated by Rio Tinto, who will have worked closely with Accenture that the solution delivered is tailored specifically to the changing needs of the business.

"Indeed, it's key for a cloud provider to accurately understand how a business works before it can provide a solution which will guarantee the savings cloud promises."