Case Study: Telefonica achieves 15% IT cost reduction and increased agility with Office 365

Telco Giant Uses Hybrid-Cloud Strategy to Trim IT Costs by 15 Percent, Gain Agility

Telefónica, a global Spanish telecommunications provider serving more than 315 million customers, faced massive server sprawl—about 18,000 physical servers across dozens of data centers—and slow, costly IT delivery that could take months. The company needed to cut operating costs, improve reliability, and speed up service delivery to stay competitive.

Telefónica built a Tier‑4 private cloud in Madrid using Windows Server 2012/Hyper‑V, System Center, and HP ProLiant servers, and linked it to Windows Azure for a hybrid‑cloud model. The plan consolidates ~18,000 servers to about 6,000 (supporting up to 10,000 VMs), aims to run 80% of infrastructure in cloud environments, and delivers measurable benefits: an expected 15% reduction in IT costs, delivery times shortened from weeks to days, and improved availability and flexibility.

Telefonica

Adrian Steel

Global Head of Infrastructure