FedEx is to close its data centers and retire all of its remaining mainframes within the next two years.

Speaking during the FedEx investor day, FedEx CIO Rob Carter said the company is aiming for a ‘zero data center, zero mainframe’ environment based in the cloud, which will result in $400 million in savings annually.

“We’ve been working across this decade to streamline and simplify our technology and systems,” he said. “We’ve shifted to cloud...we’ve been eliminating monolithic applications one after the other after the other...we’re moving to a zero data center, zero mainframe environment that’s more flexible, secure, and cost-effective.”

“Within the next two years we’ll close the last few remaining data centers that we have, we’ll eliminate the final 20 percent of the mainframe footprint, and we’ll move the remaining applications to cloud-native structures that allow them to be flexibly deployed and used in the marketplace and business. While we’re doing this, we’ll achieve $400 million of annual savings.”

The company is a known Oracle Cloud and Microsoft Azure customer.

While it may have had previously on-premise spaces or leased spaced in colo data centers, FedEx first publicly opened an on-premise data center at 250 Spectrum Loop in Colorado Springs, Colorado, in 2008, and expanded it further in 2011 to reach 166,000 sq ft. In 2008, the company acquired more than 70 acres in Nashville, Tennessee, that was reportedly for a data center project, but it’s unclear if that came to fruition.

In 2019, the company announced a 10-year deal with Switch Inc. to see the company serve as FedEx’s western US data center. Under the deal, Switch would deliver 2.5MW of capacity in year one, and up to 8MW by year ten.

Update: As noted by the Foundations newsletter, Thomas Morton, Switch President said during the William Blair Growth Stock Conference in June 2019: "FedEx came to us... they had 11 data centers that were aging out, that they didn't need and that were operating inefficiently. So what we did is over the course of the year, we helped them design a way to migrate out of most of those data centers and into our facilities, taking advantage of the fact that we have scale, the economies of scale, and lowering their costs with telecommunications. So we actually went out and sent teams to visit all 11 of their data centers. We're in the process of decommissioning a bunch of those data centers and moving those deployments into our facilities."

FedEx has previously said it planned to work with Intel and Switch to build Edge data centers at FedEx locations across the US. Whether this has actually been rolled out is unclear.