When you're a global, engineering-driven firm in a competitive industry, the last thing you want is a group of 2,200 ticked-off designers. But that's what Applied Materials' CIO faced a few years ago.

The $10.5 billion maker of semiconductors and solar power cell equipment had moved to a fully integrated product lifecycle environment to streamline its engineering operations.

But users said the new 3-D computer-aided design (CAD) systems made their jobs harder. They emailed the CEO about data integrity issues, complained about long load times, and some left the company altogether, calling out poor software performance in their exit interviews. According to one design leader, engineers were losing 30 percent of their productivity.

"We had to stop the pain," says CIO Jay Kerley. He had two options--blow up existing business processes or blow up IT infrastructure. "Changing the business processes for the whole company would have been a much tougher row to walk," says Oran Davis, managing director of processes, methodologies and tools, including global product lifecycle management.

The plan IT devised--move the CAD systems to a private cloud--was risky. Theoretically, it could provide everything engineering needed--reduced complexity and errors, improved cycle times, and real-time collaboration. But "we couldn't find anyone who had done this before," says Kerley. "We found pieces of infrastructure capabilities that would allow us to provide the private cloud, but we had to do a lot of work to operationalize it."

Applied Materials' solution, which won it a 2012 CIO 100 award, was achieved by boosting engineers' computing power, reducing latency to the data stores and having IT consolidate the five terabytes of engineering data into three data centers, storing the huge CAD files on top-of-the-line network-attached storage and SAN servers. When it's time to work, users connect to one of the more than 1,000 CAD blade workstations with multi-core processors that also reside in the data center. To further improve speed and function, synchronization links were reduced from 10 to three, with data syncing between sites every two hours.

The engineers were skeptical. "They said, 'I need access to this information in real time and you're going to take this data off of my machine?'" says Kerley. "We had to prove this to them every step of way."

It was a long, phased implementation. Davis monitored transactions and workloads and reported the performance improvements to the designers. Application response time improved 200 percent, variance in response time was 50 times better, and synchronization failures fell 90 percent. The private cloud enabled an additional 500-plus hours of productivity each month, which more than paid for the project in the first year.

There are drawbacks. "The energy pull and requirements are significant," says Kerley. IT support staff also had to learn new skills. But he says the relief for engineering outweighed temporary IT pain. Today, 2,000 engineers access CAD apps via the cloud, and the rollout continues. Engineers' satisfaction with IT jumped from 43 percent to 79 percent. And no designers had to alter the way they worked. The only change was a new application window on their desktops. "Our mantra was that we would supply an environment patently identical to the one they were used to," says Davis.

That, it turned out, was the right decision. Kerley now takes calls from other companies with large engineering teams who struggled to rework their global business processes. "They're still not happy," Kerley says.

Read more about cloud computing in CIO's Cloud Computing Drilldown.