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4-page Case Study - Posted 2/9/2010
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LS Industrial Systems

Increase management productivity by 50% and significantly decrease TCO with server



LS Industrial Systems is the No.1 leading company with about 35~70% market share in the electricity and automation businesses. In 2007, LS Industrial Systems simplified its backbone infrastructure by integrating several UNIX servers and storages on ERP. In 2008, it launched a large-scale project of integrating 85 servers on Windows Server. In early 2009, it complete a new framework for next generation IT infrastructure. LS Industrial Systems promoted optimization of UNIX and Windows Server infrastructure because it realized the need to improve inefficient cost elements. Jun Hoonseok, Manger of Information Strategy Team at LG Industrial Systems, says, “Excluding ERP and several backbone systems, we run almost all of our business systems based on Windows Server and most of them are old and obsolete with discontinued spare parts, causing difficulties in maintenance. In addition, there were many servers targeted for management and distributed over several locations, so it is not easy to cope with failures without integrated management tools.”

Management of existing Windows Server was delegated to LG CNS, which is well-know Korea IT Service Company, and they create daily books to manually organize particulars including CPU usage rate. In addition the field staff in its Cheongju and Cheonan facilities are not applications experts and unable to seamlessly cope with failures. Jun says, “In the past when failures occur, it used to take 2~4 hours to determine and resolve the failure.” However, it was not easy to establish rapid failure measures because it was too expensive to receive external management services for UNIX servers. LS Industrial Systems has been thinking about re-structuring its Windows Server infrastructure since 2006.

In 2006, LS Industrial Systems received proposal for integration from server providers, so it conducted reviews internally. Jun says, “As the number of Windows Server increases, we focused on virtualization and at that time we received concrete proposal. The consensus internally then was to review the enterprise wide Windows Server architecture and search for an innovative scheme.” Later around July 2007, LS Industrial Systems Information Strategic Team began to draw the outline for next generation Windows Server infrastructure and established concrete investment strategy in early 2008. In this process, LS Industrial Systems decided to integrate existing Windows Server and move all servers running in external data center and local business locations to the computing room in the head office to optimize its server infrastructure and lower TCO. Then taking the opportunity of server integration, it aggressively reviewed deploying management tools, one of its long-time challenges. Jun says, “We reviewed deploying management tools as a way to strengthen ownership of IT operation. Compared to outsourcing overall management, we determined that it is more advantageous in terms of cost reduction as well as strengthening internal IT operation capabilities.”



After deciding to deploy tools for integrated management of server integration and Windows Server infrastructure, LS Industrial Systems conducted comparisons and evaluations to decide on the method of integration. In this process, the LS Industrial System Information Strategic team closely compared the advantages of physical integration and using VMWare solutions. Results showed that if it promotes virtualization environment of enterprise wide Windows Server infrastructure in 2008 then it will not achieve high cost benefits.

Another factor leading to LS Industrial Systems deployment of VMWare was cost increase. Compared to costs of physical server integration, virtualization with VMWare does not offer significant cost benefits considering the costs of manpower needed for licensing, installing and technical support and maintenance costs. Moreover, when LS Industrial Systems considered future scalability, there were no difference between expanding physical servers and additional purchases of VMWare licenses, showing that virtualization based integration was not practical. As such, LS Industrial Systems Information Strategic Team seized on promoting the project with physical integration. Even so, it could give up on virtualization, a major trend of the time. So, while promoting physical server integration, LS Industrial Systems Information Strategic Team decided to utilize Microsoft’s Hyper-V in promote virtualization in the development/testing servers to expand virtualization from a perspective of internal verification.

The physical integration of this project target 69 old and obsolete server. LS Industrial Systems calculated capacity in tpmc unit based on required performance for physical integration. And it built plans for migration 69 Windows Servers that require urgent replacements to 42 new servers. Its execution plans included not simply migrating existing servers but upgrading software including operating systems and databases. First of all, it decided on Windows Server 2008 as the operating system for the development/testing servers targeted for virtualization through Hyper-V and Windows Server 2003 as the enterprise wide standard server operating system. It standardized its database from SQL Server 2000 to SQL Server 2005. It completed server change and system migration in the second half of 2008. Next, it integrated database and Active Directory and deployed System Center Operation Manger 2007 from February till March. During this period, Hyper-V was also configured and LS Industrial Systems Information Strategic Team integrated existing 6 development/testing servers into 2 physical servers.



Enhance work productivity of system administrator by 50%

LS Industrial Systems’ next generation Windows Server infrastructure began providing benefits from the moment it began official operation in April 2009. Jun says, “We closely questioned work and cost reduction based on annual salary, daily work hours, number of various inspection and reporting cases, failure processing and daily inspection activities of 3 system administrators. According to the results, LS Industrial Systems can achieve more than 50% savings in work hours and about KRW 50million in annual cost savings.” Another tangible benefit that LS Industrial Systems Information Strategic team was very satisfied with was acquiring ownership of IT infrastructure. Jun says, “We made comparisons with outsourcing management to an IT service provider and direct management in our computing center with System Center Operation Manger 2007. From an ownership perspective including enhancement of economical and internal capabilities, we can expect significant savings using automated management tool to directly operating 78 servers, which costs about KRW 200million annually.” On the other hand, the cost of deploying System Center Operation Manager 2007 is better economically as it costs about 3months of costs for outsourcing server management.

Exceed initial goal of reducing IT infrastructure costs for T-COPQ

The Windows Server infrastructure of LS Industrial Systems, which enforced next generation change from several perspectives including server integration, virtualization and deployment of management tool, will significantly contribute to activities for overall IT costs savings. In fact, since 2008, LS Industrial Systems has been carefully estimating T-COPQ activities, an enterprise-wide execution of eliminating waste elements to calculate costs effects through IT infrastructure optimization. Comparison of results in 2008 showed that its Information Strategic Team exceeded the initial goals of reduction in repair costs and purchasing consumption goods. Furthermore, it can resolve the issues relating to decreased productivity and time to recovery due to failures.

Cost reduction in deploying management tool required for promoting ITSM project

Jun says, “Without automated failure management tool, ITSM will only be able to play the role of inputting. If System Center Operation Manger 2007 was not available then we would have to consider deploying costly solutions.” He adds, “We outsourced our UNIX environment and used the management tools of the outsourcing provider and we used System Center Operation manger 2007 for our Windows servers, so we were not concern about system management when promoting ITSM.” In other words, from the perspective of LS Industrial Systems Information Strategic Team, System Center Operation Manger 2007 is not a simple Windows Server management tool. It supports integrated management for not only physical servers but also Hyper-V based virtualized environment as well as fulfills a robust foundation for implementing enterprise-wide ITSM.

Verify proactively deployment of virtualization without additional costs

LS Industrial Systems Information Strategic Team considered the fact that it was able to build virtualization through Hyper-V at no additional costs as one of the benefits of achieved from upgrading its Windows Server infrastructure. Jun says, “During the early stages of project promotion, we performed technical evaluation for Hyper-V and VMWare. When we looked at the next solution roadmap and the detailed technical evaluation, we found that Microsoft’s technology is better in terms of cost as well as in terms of technical view. At that time we perceived that it is early to promote virtualization across the businesses but we had thoughts of gradually converging virtualization in the infrastructure, so adapted virtualization limited to the development/testing servers.” He adds, “After personally operating them, we realized that it is better to run main systems with many transaction on physically separate systems and run other systems on Hyper-V. We will put on new servers developed after 2010 on priority and review them in virtualized environment first.”

Acquire operation flexibility for development/testing servers

LS Industrial Systems achieved an unexpected benefit when it virtualized its development/testing servers with Hyper-V. Jun says, “Because we configured our development/testing servers focusing on major servers, we had difficulties in acquiring equipment when we receive requests for development/testing server from either the business divisions or projects. We had to respond with idle equipment but they had poor performance, causing inconvenient operation. But now with operation integrated on Hyper-V, we acquired flexibility to provide a high performance development environment.” He adds, “Since we deliver our products like solar energy supply system and RFID together with IT systems to our customer, then it is another benefit that we can accommodate all development/testing demands in our virtualized infrastructure before delivering the total solutions.”

Solution Overview

Organization Size: 1875 employees

Organization Profile

LS Industrial Systems, founded in June 13, 1974 as Goldstar Industrial Systems, is a leading company in the field of electric power and automation for industrial businesses.

Business Situation






Software and Services
  • Windows Server 2008 Enterprise
  • Windows Server 2008 technologies
  • Microsoft Hyper-V

Vertical Industries
  • Manufacturing & Resources
  • High Tech & Electronics

Country / Region

Business Needs
  • Cloud & Server Platform
  • Business Productivity
  • Cost Containment

IT Issues