Royal Selangor IT System And Cloud Computing

1. Introduction

This report is commissioned by the question of Royal Selangor International (RS) for the purpose of inspecting existing IT infrastructure and draw out tips for RS to adopt to cloud processing technology. The current IT infrastructure that manages RS's business functions are analyzed. Data for the analysis are accumulated through interviews with RS management associates. Predicated on these data and evaluation with available cloud computing solutions, suggestion on the adoption of cloud computing are produced for RS's factors.

1. 1. Background

Royal Selangor's center business is retailing pewter artifacts and jewelleries. RS is a private owned company manufacturing and retailing fine quality pewter artifacts products worldwide and is now the largest pewter artifacts producer on earth. Founded in 1885 and based in Kuala Lumpur, Malaysia, RS has expanded leaps and bounds to international reputation and has triumphed in several esteemed awards. The company lately celebrated its 125 years wedding anniversary. The homepage Web address of the Royal Selangor is http://www. royalselangor. com

RS currently works 3 brands under the company. RS alone crafts and retails the pewter artifacts, Selberan which retails fine jewellery and Comyns, a brand that has 350 yrs. old legacy in silversmiths. (Bernama 2011)

RS's products are sold through 3 stations the following;

  • RS owned flagship stores which are located at visible shopping districts about the world, including London, Tokyo, Melbourne and Toronto.
  • Distribution network to reputable shops surrounding the world.
  • Online shop that will serve both marketers and customers.

The major part of RS's success is through the web retailing. RS will be the pioneer in establishing its business for online shopping. It has allowed RS to multiply its business internationally to marketers and also right to end users. RS was honored the CIO honor in 2001 which recognizes the genius could it be execution and strategy. (International 2001) The web shop in addition has provided RS channel to communicate with the client and increases its services. RS in addition has established worldwide offices with warehousing facilities in major marketplaces such as Australia, Japan, Hong Kong, China, Singapore, Britain and North America.

1. 2. Corporate and business Structure

RS is a family group run business since it was first founded in 1885. Through 4 years, the business has been offered to succeeding family. RS organization structure for the making business is as per Connection A. The Managing Director is supported by two General Managers, controlling and overlooking the entire operations from raw materials, creation, research and development, marketing, e-commerce up to syndication and international marketing. Each section operates on its IT system for reporting and thorough tracking of the raw materials up to storage and distribution. Further detail examination of the IT system of RS will be captured partly 2.

RS's Company Insurance plan suggests the ambition of the business to maintain its status on the list of forerunners of the industry also to strive for quality by being ahead of competition. In align with this policy, RS has adapted well with new IT systems to improve its services to the clients. That is proven when RS opened up its web store 10 years previously in 1996 while many industry players are still skeptical about web store. (Yee 2007)

RS has organised its operations to perform on a organized IT infrastructure. Business operations of the group are the following:

  • Financial department
  • Human source of information management
  • Manufacturing
  • Distribution
  • Marketing
  • Warehousing
  • Customer connection management.

2. IT Infrastructure

With over 1000 different products to be created and sent out across local branches in Malaysia and also to 20 other countries directly, RS takes a system which could provide up-to-date and accurate information to the people involved. RS possessed embarked on various marketing strategies to expand the company and in the year 1996, ventured into the e-commerce with RS online store and website promotion and advertising (International 2001). The next business strategies, marketing, e-commerce system and web development have since been developed in-house to the precise needs of the organisation and RS desiring more control in its development and deployment. (Yoon Equipment, Yong 2011, pers. comm. , 1 April)

Critical business steps especially for making and the retailing are being included and streamlined for speedier handling and better performance for the company. For the creation department, integration and real-time upgrading of information for raw materials, work-in-progress and last goods are essential for the organisation to be leaner. Venture applications are capable to provide exact buying tendencies of customers and the info gathered have translate into a much better inventory management for the organisation and to the customers.

As for the look team, It really is needed to increase the look period and can help transform new ideas into great products. Design information can be utilized for quick and clear generation of processing ready drawings and used for online prototyping. All this can offer distinctive advantages to RS over their opponents such as services were created in pewter with yet another animated storybook. (Bao Shan, Yip 2011, pers. comm. , 3 April)

Retailing personnel will benefit from the information on customers and also inventory to raised serve the customer. Fast response and also delivery scheduling can help the retail staff to close sales deal quicker. Besides that, online marketing tools such as sociable networking are used to market products positively. For RS, the tactical role of It's very clear and it is for creating a competitive benefits over their competitors. (Yee 2007)

2. 1. COMPUTERS Platforms

For the tedious tasks, desktop personal computers and laptop computers from Dell and Horsepower jogging on Intel or AMD processors are given. For the design team, Apple IMac can be used as it is more suited for the modelling and designing purposes. The mainframes can be found in-house and contain Horsepower and Dell servers. These are dedicated for the critical applications such as the enterprise reference planning system (ERP), Storage Area Network, private automated branch exchange (PABX) and the network systems between your offices and also the online store. Cashiers at the individual branches are utilizing Point of Sales (POS) Terminals connected to the main servers for daily business deal processing.

2. 2. Operating System Platforms

For the overall desktop computing or consumer level, RS is using Glass windows based operating system to control the resources and activities of the computers. The Apple personal computers are supported with IMac OS X system. For the servers, RS is using Samba / Linux Server OS systems that are open sourced which is easily versatile to different servers and software. Centralised revisions and patches are provided in-house by RS IT staff.

2. 3. Enterprise Software Application

RS is currently using the Baan ERP system and it was deployed in the year 1999. The machine is utilized mainly in making, finance, human resource and warehousing. The Baan Customer is operating on the Glass windows based operating system. The selection of Baan was based on the capability of the making module of the Baan ERP system.

2. 4. Networking / Telecommunication

RS requires a reliable network and telecommunications setup because of the global occurrence and extensive syndication programs to more than 20 countries such as Singapore, Japan, Hong Kong, China, Australia, UK, Canada and United states. Locally, there are about 21 retailers nationwide. They are employing Unifi fibre optics broadband services provided by Telekom Malaysia. This is for the standard activities such as internet and correspondences and the network is maintained via Transmitting Control Process / Internet Protocol (TCP/IP) suite.

As for the dedicated leased lines, it is linked to the offices and branches via the Cisco Systems. Cisco Core Change provides the complete organisation connectivity because of their Enterprise Data Routing and with the moving over capacity for the Intelligent Bandwidth really helps to ensure optimum availability to their office and branches worldwide. Inter-office communication is using Lotus Notes as the built-in desktop client option for accessing e-mail and calendaring.

The main office is utilizing PABX telephone system which can support an organization wide mobile phone and fax machines where as the branches are connected via standard public switched telephone sites.

2. 5. Data management and Storage

The Data management and safe-keeping for RS is quite large as it is to ensure that product designs are archived and held for future reference point. The other dependence on the organisation is to provide a shared folder jogging on the server as the depository of the new product designs in use by the company. The major utilization of any 20 tetrabyte space is perfect for the designs of the merchandise and the accessibility of the info by various departments. Baan ERP application and database consumption makes up about about 200 gigabyte space and the Lotus Notes application occupies about 150 gigabyte space.

The physical hardware for the storage originates from various original equipment manufacturer (OEM) options and the primary provider is Dell. The hardware components are Dell / EMC CX3 which is utilizing Small Computer System User interface (SCSI)/Fibre hard disk drive for key production system.

2. 6. Internet Platforms

The key internet sites for RS will be the online shop/e-commerce and visitors center homepage. The other sites under the group are Comyns and Selberan which is also under the support of RS IT office. The website was constructed with customers at heart - it is to be used as a two-way communication route for customers, and a one-to-one marketing and fulfilment tool. The web hosting of these sites has been outsourced to CSC to ensure service supply and network latency. These webhosting servers are jogging on the latest iteration of Microsoft IIS Servers. The web site are looked after with Linux / Apache / MySQL / Perl/PHP/Python offer as it is open-source which is easily adaptable to suit RS applications.

2. 7. Consultants and System Integrators

Most of the machine integration work is done in house leveraging on the knowledge available.

Currently, RS is getting external consultant support for the Baan ERP systems when required. The e-commerce system initially was out sourced but because of the specific needs of the organisation, it is currently completely developed and maintained internal. Others system integrators or consultants are being appointed when necessary.

Issues that were identified are the following:-

  1. To ensure interoperability between each systems. RS have essentially two systems to ensure its interoperability which will be the CRM and the ERP applications. For the other platforms such as servers and data centre, the program used are open source whereby customisation would be easier.
  2. Ensure continuous communication and connection between shared information worldwide. The necessity to access to data and inventory in real-time and reliably.
  3. Maintain a proper integrated and even supply chain especially for the web shop. It requires to be up to date constantly and best practices should be used and cascade right down to the procedure levels. Implementation will be a major stumbling block due to the manufacturing functions being labour intensive.
  4. Maintenance of software and hardware systems 24/7. For storage, the task is managing the data and managing the systems that house the info. Software tools that trail and manage storage resources proficiently are in high demand for these reasons.
  5. IT personnel retention became difficult. Internally, the IT division is helping on hardware troubleshooting whereas the service or troubleshooting support will be provided by the external team of consultants.
  6. The current staff skill is enough to maintain and operate the system effectively. However, the personnel education at the operator level is still lacking. Consistent training and retraining is necessary.
  7. Cost decrease is positively pursued whenever you can find chance as budget is actually constrained. Since data storage space continues to grow at 40% to 60% per year, the task is amplified to get the most from any new storage area purchase.

Challenges that are constantly faced by RS are listed below and some are being positively pursued by RS.

  1. To maintain operation excellence in the whole value chain - design, manufacture, syndication and retailing not only locally but also worldwide. Leaner development and shorter processing time and delivery schedules are key target area for ongoing advancements. (International 2001)
  2. To innovate and re-invent the "wheel" for the retailing and marketing of the products by it. Constantly RS need to find ways to advertise their products as the existing marketing route in local and abroad retail retailers, on-line shop, commercial customers and the visitor middle / showroom is not good. Currently each competition in pewter ware has their very own website and they are promoting their products online, retails outlets and also at their main showroom (Tumasek 2011). RS have to check out the industry of top quality giftware as well which would consider a worldwide market. SEO programs, collaboration with se's and partnerships with other websites are areas to focus more in order to permeate further in to the international market. (Shankar 2003)
  3. To preserve customers and attract clients are important. Major competition such as Tumasek, Oriental Pewter, Mariwasa and Pewter Arts are constantly challenging RS. New designs and faster development and roll-out of products would ensure a greater market show. Providing better and even more personal touch to customer service will benefit over time as customers could have greater notion of the merchandise not only in terms of quality but also the service that is included with it. (Shankar, 2003)
  4. To constantly review the business strategies of course, if necessary upgrade or adapt the existing system predicated on the precise needs of the company. The final call is the fact that any new product or system purchased should move towards lower costs, better operations and common management. (Yee 2007) Strategies such as using setting up websites in indigenous languages of the united states they will market the merchandise.
  5. Open source performs an important role with the servers in RS. (Yoon Set, Yong 2011, pers. comm. , 1 Apr) Most of the infrastructure machines are on Linux which gives flexibility in rolling out new machines as well as replicating our administration. RS runs on the great deal of the electronic machine ware so that it is now simpler to deploy new test and production machines on demand without having to submit capital costs and commission payment new machines. Steady upgrading of information and also skills related to open up source would be essential for RS.

3. Cloud Computing

Cloud computing obtained its name from the metaphor for internet which symbolizes a location on the network that resides outside (cloud) but must make the network complete. The control of the cloud can be an external party's concern which is hosted and looked after by other people and does not need the disturbance of the internal get-togethers (Velte et al. 2010, p. 3).

Examining the Cloud processing, it is actually a model for allowing convenient, on-demand network access to a distributed pool of configurable computing resources. These resources include sites, servers, storage space, applications, and services that can be provided to the customers to aid its daily businesses. As discussed in NIST file, Cloud computing involves five essential characteristics, three service models, and four deployment models (Mell & Grance January 2011, pp. 2-3).

The 5 Essential Characteristics

  • On-demand self-service. Services can be found to the customer all the time and with no need for intervention by the service provider.
  • Broad network access. The system is web based and can be utilized from any internet empowered device such as through cellular devices, thin or solid client programs.
  • Resource pooling. The provider of the cloud processing services uses physical or virtual resources to provide multiple customers with different needs. The client generally has no control or knowledge over the exact located area of the provided resources.
  • Rapid elasticity. Customers can range up or reduce according to their own requirements. Additional services can be purchased at any time.
  • Measured service. Customers being able to access the system are easily tracked and manipulated by means of storage, control, bandwidth, and productive individual accounts.

The 3 Service Models

  • Cloud Software as a Service (SaaS). The supplier offers an request that the customer can be accessed by different consumer platforms like a normal consumer computer. The software is online and will not reside in the customers personal computers. The devices just need to interface via a thin client user interface including the Web browser. The consumer does not need to physically install the software.
  • Cloud System as a Service (PaaS). The ability provided to the customer to build up applications using the encoding dialects and tools provided by the company. The customer will only have control of the application form developed using the program provided.
  • Cloud Infrastructure as a Service (IaaS). The provider only supplies the infrastructure to the customer. The customer controls its software and applications but has no control over the cloud infrastructure.

The 4 Deployment Models

  • Private cloud. The cloud services are provided to only 1 organization.
  • Community cloud. The cloud services are distributed by few organizations
  • Public cloud. The cloud services are created available to the general public or a sizable industry group and are had by a business retailing cloud services.
  • Hybrid cloud. The combination of two or more cloud deployment models which works on a typical or propriety technology.

To summarize the definition of cloud computing, it is where software, system or infrastructure services that are made available to the customers all the time. The customers have relieved itself from the concerns of operating and keeping the physical areas of the system and enable them to give attention to its primary competencies.

Before exploring the adoption of Royal Selangor with cloud processing, the advantages and cons of cloud computing will be explored in following chapters below to examine further the main element positives that will assist the company. Number 3. 1 illustrates the advantages and cons of Cloud Processing.

3. 1. Benefits of Cloud Computing

3. 1. 1. Financial Benefits

Cloud processing provides new solutions for all sizes of businesses and market sectors. When modern businesses searches for ways to minimize operating cost without burning off much efficiency, cloud computing serves to be a key part to aid the business to achieve the target.

By bettering server utilization and decreasing the number of servers, significant cost reductions can be seen and also, future capital costs can be handled. Normally servers are designed to have redundancy as well as spares for future expansions. This translates to capital expenditures spent for facilities that aren't utilized. Cloud computing provides enables the customer to pay just the quantity of usages used which translates to cost reductions.

Also, there's a decrease in physical server depreciation cost. As described above, fewer servers maintained by the company means less depreciation costs. In addition, it also straight displays to energy intake and facilities cost. Reduced machines require less energy to use and smaller facilities.

When a genuine comparison is performed, using a fully cost model, the decision weighs about more favourably towards cloud processing. So when the other advantages are considered then cloud computing can really stack up as a feasible option (Group 2009, p. 6).

3. 1. 2. Technological benefits

Cloud computing gets the ability for the system to increase and contract automatically predicated on the demand of the customer. For software, new users can be allocated to the system and begin using almost immediately without much difficulties. The reference platforms such as safe-keeping, networks and machines are available on-demand and again do not require much intervention or work by the customer to prepare the system. More significantly is the redundancy and back-up system available to the customer, making certain the info are safe and shielded.

3. 1. 3. Operational benefits

In terms of businesses benefits, this is referred as outsourcing techniques the IT system and delegating the risk management. Service providers have to ensure that the system is offered by any moment and redundancy provided. The problems that have been concerns for companies running physical hardware, servers and data centers can now shift the potential risks to the company. Access to the machine is also improved as possible accessed from everywhere via an internet empowered device. This improved upon operation excellence as data are always available at everywhere, anytime to the users of cloud computing.

3. 1. 4. Environmental Benefits

By using less servers through machines consolidation, energy use of the IT system is substantially decreased. This translates to lower and more efficient energy ingestion.

3. 1. 5. Competitive Advantage

Businesses can become more competitive by implementing to cloud computing. Cloud computing provide a quick and useful start up for any small or medium size businesses. This allows those to have almost similar capacity as larger proven companies in conditions of computer systems. Also, with data easily available, it allows businesses in general to be more agile and response quicker to advertise.

3. 2. Cons of Cloud Computing

While the features of cloud look promising, there's also negatives to the cloud services such as below:-

3. 2. 1. Security issues

There is a need to look at the security aspect for cloud. The security hazards that include cloud computing ranges from user access, recovery, regulatory compliance and long term viability. Very sensitive data refined/stored externally brings with it an inherent level of risk, because outsourced services bypass the "physical, logical and personnel adjustments" from in-house programs. The controls of user gain access to and also content management access would need to be clear and clear so customers are not concerned about their data being compromised. (Brodkin 2008)

3. 2. 2. Insufficient control

For cloud computing, the hardware and software could be located in multiple locations all over the world compare to in-house systems. The control on the storage and security of the info will be the under the jurisdiction of the cloud vendor and users don't have much control over it. Performance and improving of the applications and data security will be counting on the timeliness or arranging of the suppliers to update their software.

3. 2. 3. Lock-in to cloud vendors

Users should become aware of the chance of lock-in to the cloud suppliers. The concern will be on whether in the future there is the need for changes or substitute of the software/platform/infrastructure selected primarily and thus transitioning cost will be incurred. Based on the three types of cloud processing, the service and program will involve some sort of impact and difficulty if there is a need to improve vendors. Selection of vendors offering minimum amount lock-in should be preferred. (Petri 2010) Addititionally there is the necessity to ensure that the info that is held with the vendor will remain available even if they have been attained or merge with other greater vendors.

3. 2. 4. Consistency on cloud functionality

Cloud vendors centered their business on providing high up-time and downtimes should be kept to a minimum. Overall hardware and network trustworthiness from cloud suppliers are believed to be at par or above par evaluating to the average data centre. However, there are times when you can find downtime which would be considered to be unacceptable if it is too much time and economic deficits are being factored in. A few sellers will have rigid service level agreements (SLAs) offering themselves with a method of controlling the downtime. (ENKI 2011) Aside from the downtime from servers, we have to look at the downtime created due to non online sites such as interconnection and bandwidth availability. There could be problem when the internet connection is unavailable or not sufficient to support the efficiency of the applications. This would totally provide the cloud software a total failing.

3. 2. 5. Data segregation

Data stored in the cloud is generally in a distributed environment which is put within the same location as other users. There is certainly the need to ensure that the data is fully anchored in support of the authorised end user can get access to it and the cloud supplier should evidence that encryption techniques were designed and tested by experienced specialists. Data can be totally unusable when there is complication through the de-cryption process. (Brodkin 2008)

3. 2. 6. Restoration of Data and Services

There would be difficulty in being able to access the data and service provided in the cloud as the user would not have any information on where in fact the data is or how it has been stored. In the event of catastrophe, the cloud specialist would need to setup an effective data recovery or recovery. There would be question on when can be data be ready for use after they initiate the recovery process. (Brodkin 2008)

4. Advice of cloud processing adoption/adaption

The studies from above are analyzed up against the factors that forms the Competitive Forces Model for IT Infrastructure (Laudon & Laudon 2010, p. 223). This provides an outline of RS's necessity to look at cloud computing as its IT infrastructure.

4. 1. Market demand for organisation's services

Internet sales will always be the forefront business of RS. 80% of RS's sales are from the web shop. (Yee 2007) Considering future styles, the e-commerce will keep on widening and improving. The marketplace demand is and has shown to be in abundance for RS to venture. With cloud processing, RS's operation can become more streamlined and increased and meet customer's demands.

4. 2. RS business strategy

RS strive to be the best pewter producer on the globe and maintain its competitive border over competitors. (Khay Chong, Observed 2011, pers. comm. , 5 Apr)

4. 3. RS IT strategy, infrastructure and cost

RS designs to utilize it to get competitive border over their competitors and to maintain their market position. The strategy has proven to be useful as it was acknowledge by the CIO Asia Award in 2001 and Intelligent Organization: Asia's Intelligent 20 honor for the E-commerce businesses. (International 2001) Ventures into social media marketing and web cooperation with overseas online store have provided the visibility and advertising edge for them such as relationship with John Lewis (http://www. johnlewis. com) or Wesell Royal Selangor (http://www. wesellroyalselangor. co. uk/).

4. 4. RS Information technology assessment

Current set up is very centralized and all located within the primary HQ. From your IT infrastructure research, we find that the hardware and software used within the organization are believed to be sensible and commonly used in all industries. The use of open source have also help in making certain the machine can be altered and become made better as they make use of it with constant upgrading. Nevertheless the weakness could lay with the personnel availability.

With cloud processing, this can be a perfect IT infrastructure for RS to adopt. Moving over to cloud processing provides a possible solution for RS to keep up its businesses outside of Malaysia with the same IT infrastructure.

4. 5. Competitor's IT Services

In assessing RS's opponents' IT services, two main opponents particularly Tumasek Pewter and Oriental Pewter are analyzed. Both Tumasek Pewter's (http://www. tumasek. com/home. htm) and Oriental pewter's (http://www. orientalpewter. com. my/home. htm) website doesn't have online store. RS is the first choice in pewter industry as its main competition are not having the same IT services as RS. This is even more a reason for RS to look at cloud processing. As the start-up of computer system are faster through cloud processing, the competition will definitely provide same services in the near future. By implementing cloud processing first, RS can be ahead of competition.

4. 6. IT infrastructure investment in pewter/retail industry

For retail industry, capital spending in 2008-09 at John Lewis (RS partner) was 404m, compared with 363m in the previous time. About 30m signifies investment in efficiency jobs such as new Oracle financing systems recently integrated in Waitrose and the firm's head office, and investment in keeping and modernising its IT set-up. (Mari 2009)

Investment into IT for manufacturing is growing for Asian supplier and target is on cloud founded applications' capability to increase the efficiency of the business such as attaining understanding on customer behavior, improve efficiency and productivity of manufacturing functions and in the source chain from dealer and to customers. (Yap 2011).

Under the Malaysia's Economic Transformation Programme, the general and retail and travel and leisure industry are place in the forefront of Malaysia's economic development. Few key areas were earmarked for development and the main element area with IT investment would be the globalisation of our own products by means of virtual retail system or department stores. Investment around RM 1. 3 billion will be allocated to this area which can help competition of RS to develop their online shop. (PEMANDU 2010)

RS is well aligned to look at to cloud computing. Getting into cloud for a recognised firm like RS requires a strong management vision declaration and support for the migration. Strategies needed to be developed to allow the migration to be completed perfectly & most important, without hampering any existing business procedures.

Strategies to be studied by RS are as follows;

Business Review

To establish the key objectives, tools that may be use is SMARTA goals which is Specific, Measurable, Achievable, Realistic, Timely and Agreed. ( Williams 2010, p. 102 )

Project Management

To setup a Project management team to control the migration and keep all stakeholders satisfied. An Execution plan will provide the required clear techniques for the migration. ( Williams 2010, p. 113 )

Adoption to cloud system will be done according to recommended alternatives as below;

  1. For the daily habit communications and content management, RS would be wise to go through the various applications offered from cloud processing. This would probably relieve some of the bottleneck for support currently experienced by RS IT department's staff.
  2. Part of the RS marketing channel to corporate users would be beneficial if there is a credit card applicatoin similar to what is being offered by Sales. Make. com. The sales value string from primary contact to ideas showing between customer, designer and marketing fellas would create large knowledge content for future reference point. Other marketing personnel may benefit by learning by example/faults during the sales value string.
  3. Currently RS's developing processes utilizes the BAAN system. To streamline the effectiveness and promote an equal platform for RS's business worldwide, RS can consider implementing the SAP Business ByDesign 2. 5 cloud SaaS solution. SAP has a significant manufacturing domain knowledge and can offer RS the best solutions to its manufacturing functions. (Singleton 2011)
  4. Improvement to the supply chain management whereby suppliers can take up cloud computing with applications with guidelines. This can work both ways by guaranteeing the transparency of the supply string to the production type of RS and also RS can screen the scheduling and efficiency of the company. As part of SCM, RS may help develop the smaller suppliers to be more productive with cloud processing applications and also possibility of minimizing cost to the same supplier which might not need the investment for this.

5. Conclusion

Examining the aforementioned, RS is a more developed company and can be an industry innovator in pewter crafts manufacturing and retailing. Powered to be the industry leader, RS has recently ventured into e-commerce because the early nineties and is also quick to adopt new IT systems to help the business enterprise grow. RS's business techniques are well operated through a well established IT infrastructure and already has the resources to adopt new technologies.

Focusing on cloud computing, the features of cloud computing proves to out weight the negatives. The offers of cloud processing and the future of computing shifting to cloud, businesses no longer can disregard the progress of cloud processing. The financial benefits, advanced functions and competitive advantages end up being enough of an incentive for just about any business to consider adapting to cloud computing.

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