4-page Case Study - Posted 9/16/2009

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FranklinCovey Company

Two Global Firms Save More Than $500,000 through Virtualization and Volume Licensing

Global training and consulting firm, FranklinCovey Co., and global retailer, FranklinCovey Products, took advantage of a Microsoft® Enterprise Agreement and Hyper-V™ virtualization software to reduce software licensing costs while expanding capabilities. They upgraded to the Enterprise CAL Suite and used Windows Server® 2008 Datacenter with Hyper-V to create separate virtual environments for each company’s operations. Each used Windows Server 2008 Terminal Services to host remote connectivity applications without a virtual private network. As a result, FranklinCovey Co. saved more than U.S.$500,000 in hardware, licensing, and energy costs. FranklinCovey Products saved $150,000 on call center setup and more than $90,000 on hardware and licensing for its internal domain. Both reduced software testing time by 70 percent and expedited deployment and training with Software Assurance benefits.

Situation

FranklinCovey Co. was formed in 1997 from the merger of Franklin Quest—creators of the Franklin Day Planner—and Covey Leadership Center—the company formed by Stephen R. Covey, author of long-time best seller The 7 Habits of Highly Effective People. The resulting enterprise, FranklinCovey Co., has grown to be a global provider of training and consulting services in the areas of leadership, productivity, strategy execution, customer loyalty, trust, sales performance, government, education, and individual effectiveness. Clients include 90 percent of the Fortune 100, more than 75 percent of the Fortune 500, thousands of small and mid-sized businesses, and numerous government entities and educational institutions. The company is headquartered in Salt Lake City, Utah, and employs 600 people who serve customers in 147 countries.

FranklinCovey Products, also headquartered in Salt Lake City, is a global retailer and the exclusive licensee of consumer products for FranklinCovey Co. These products help individuals and organizations achieve greater productivity, effectiveness, and success, and are sold throughout Europe, Asia, Australia, and the Middle East, and in more than 15,000 retail outlets across North America, including 70 FranklinCovey Products stores. FranklinCovey Products has 300 employees.

The savings achieved with Terminal Services, Hyper-V technologies, and the Enterprise Agreement is used to fund other IT projects that will help further increase productivity and reduce costs. Travis Peters Director of IT, FranklinCovey Company

In addition, the FranklinCovey Co. finance and legal departments wanted to upgrade their line of business applications, which required additional server hardware. The IT department thought it would be wise to separate the file and application servers for each of those departments to make it easier to comply with Sarbanes-Oxley and other federal requirements. On top of that, the company was going to upgrade its building security software, which was going to require additional servers.

“Between the finance, legal, and security system requirements, we were going to need five or six new servers, which would have cost more than $40,000 just for the hardware,” says Travis Peters, Director of IT for FranklinCovey Co. “We wanted to add the capabilities but reduce costs wherever possible, so we needed to look at alternatives other than just buying a bunch of servers.”

Building a New Infrastructure for Retail Products Affiliate

In addition to expanding its core Organizational Solutions business unit, FranklinCovey Co. had built a growing Consumer Solutions business unit for selling planning products and other business accessories and tools. In July 2008, FranklinCovey Co. split off its Consumer Solutions business unit to form a new company—FranklinCovey Products—which continues to sell products through franklinplanner.com, FranklinCovey retail specialty stores, catalog call centers, and through third-party retailers worldwide. The original FranklinCovey Co. organization now focuses on the continued expansion of its training, consulting, content-rich media, and thought leadership businesses.

When FranklinCovey Products became a stand-alone entity, it had to build an infrastructure for its internal operations. The original plan was to implement a domain with 19 physical servers.
In addition to the internal domain, FranklinCovey Products was setting up a catalog order call center in Pune, India, where 50 call center employees could enter orders into their corporate ordering system. The challenge was that the call center was set up on a separate corporate network with a firewall that blocked outgoing virtual private network (VPN) traffic.

To get around the VPN issue, FranklinCovey Products looked at implementing the same third-party connectivity solution in Pune that it was already using in its Mumbai call center. However, the cost—not to mention the testing and setup time required—made the solution impractical. So it turned to Microsoft Gold Certified partner EDS, which handles IT management for the company.

“FranklinCovey Products estimated that for the call center it was going to need eight servers for 50 people,” says Rick Gordon, Senior IT Systems Technician for EDS. “I knew there had to be a more cost-effective solution.”

Solution

FranklinCovey Co. had signed a Microsoft Enterprise Agreement several years earlier and has continued to renew it every three years. That Enterprise Agreement includes the Enterprise Platform offering, which means it can license components from the Enterprise Client Access License (CAL) Suite, Microsoft Office Enterprise 2007, and Windows Vista Enterprise under a single platform license.

FranklinCovey Co. also takes advantage of many Software Assurance benefits included in the Enterprise Agreement. For example, the company is using the Packaged Services benefit to plan its deployment of Microsoft Office SharePoint® Server 2007. It also takes advantage of Training Vouchers for IT staff, E-learning sessions for end users, 24x7 Problem Resolution Support, and a TechNet subscription to maximize the value of its technology investment. “Through the Training Vouchers available through Software Assurance we got training on Hyper-V, Microsoft System Center, and Windows Server 2008 Terminal Services included in the cost of the Enterprise Agreement,” says Peters.

Another advantage of the Enterprise Agreement was that it offered FranklinCovey Co. the option to upgrade its Core CAL Suite to the Enterprise CAL Suite. This move added seven server product CALs under a single multiple-product CAL for about the cost of just three product CALs if acquired separately. By the time the company fully implemented its Exchange Server unified communications solution in early 2008, it was already using five of the seven additional products licensed by the Enterprise CAL suite, so it made financial sense to upgrade.

FranklinCovey Co. then continued to expand its use of the Enterprise CAL Suite by activating a subscription to Microsoft Exchange Hosted Filtering, which routes inbound and outbound e-mail through multiple filters to help block viruses, worms, and spam from reaching the FranklinCovey Co. network.

Remote Connectivity without a VPN

The next challenge was for FranklinCovey Products to quickly establish secure, cost-effective connectivity between the Pune call center and the corporate ordering system in Salt Lake City. As the company evaluated alternatives, Gordon saw a presentation on Windows Server® 2008 Terminal Services and Hyper-V™ virtualization technologies. Seeing the potential to create a virtualized environment in which call center employees could access the corporate network without a VPN, Gordon recommended running a proof of concept.
 
Gordon set up a test environment to duplicate the proposed Pune call center. The environment consisted of a single IBM x3850 M2 server with four 6-core processors running Windows Server 2008 Datacenter, which features Hyper-V. The call center applications are published through Terminal Services RemoteApp™using Terminal Services Gateway and Terminal Services Web Access.

Once we knew that we could get the call center connectivity solution with Terminal Services for $150,000 less than the other solutions… there was no question about which one we were going to choose. Mike Connelly Vice President of IT, FranklinCovey Products

“Once we knew that we could get the call center connectivity solution with Terminal Services for $150,000 less than other solutions we considered, there was no question about which one we were going to choose,” says Mike Connelly, Vice President of IT for FranklinCovey Products. “And beyond the cost savings, the solution also makes it easier for end users to access applications and tools from any Internet Explorer® browser without the configuration headaches of a VPN.”

Gordon, in his role as server administrator, uses Terminal Services with the Remote Desktop Protocol (RDP) to troubleshoot and manage both FranklinCovey Co. and FranklinCovey Products environments, as well. “Using Terminal Services and the RDP client gives the IT department a lot flexibility because I can get anywhere I need to on the network even when I’m away from the office, which is extremely valuable with the combined offices of both companies in more than 147 countries,” says Gordon.

Following FranklinCovey Products’ success with the Pune call center solution, FranklinCovey Co. extended the new solution to its internal help desk in Pune. And, FranklinCovey Products then converted its Mumbai call center from the third-party VPN solution to Terminal Services technologies.

Building a Virtual Domain

Having resolved the call centers’ connectivity challenges, Gordon saw the potential of using Hyper-V virtualization technology for the new FranklinCovey Products internal domain. ”I saw that I could save quite a bit of money on hardware by using Hyper-V to virtualize a wide variety of servers and deliver the performance they needed,” says Gordon.

FranklinCovey Products set up the new internal infrastructure on Hyper-V in July 2008. The domain consists of one IBM X3850 M2 quad processor server running Windows Server 2008 Datacenter, provisioned with 18 virtual servers. The virtual servers run all the company’s services including file and print, FTP, e-mail, data management, network management, security, and business applications. “Getting Windows Server 2008 Datacenter up and running and provisioning the virtual machines only took about a week,” says Gordon.

The Pune call center solution eventually will be moved to two virtualized servers on Hyper V to provide load balancing and redundancy.

With its upgraded Microsoft Enterprise Agreement, FranklinCovey Co. only incurs additional licensing cost if a new application is deployed or the company adds desktops. “We count the actual number of CALs just once a year during the annual “true-up” process, which saves us a lot of management time and streamlines the procurement process,” says Peters.

More Servers, Less Hardware

When FranklinCovey Co. saw the savings that FranklinCovey Products achieved with Hyper V, it began to devise a plan to move much of its internal domain to Hyper-V also. In so doing, FranklinCovey Co. expects to consolidate from a total of 50 physical servers to about 30 virtual servers running on 10 physical servers. As of July 2009 it was running 23 virtual servers on Hyper-V on 15 physical servers.

FranklinCovey Co. also connected its Tokyo office on Hyper-V. The project consolidated eight physical servers to two physical servers running five virtual machines on Hyper-V.

Benefits

By acquiring Microsoft software through an Enterprise Agreement and employing Microsoft Hyper-V virtualization and Terminal Services technologies, FranklinCovey Co. and FranklinCovey Products are able to enhance connectivity and productivity while saving hundreds of thousands of dollars in hardware, software licensing, and energy costs. It also expedites software deployment with the help of Software Assurance benefits.

Saved $500,000 on IT Expenditures

FranklinCovey Co. estimates that it saves approximately 65 percent on licensing by standardizing on the Microsoft Enterprise Platform through its Enterprise Agreement, and gains the benefit of predictable licensing costs and the ability to centrally manage all licenses, which saves management time. In addition, by virtualizing its environment on Hyper-V, the company estimates that it has saved approximately U.S.$225,000 on server hardware, and has realized additional savings on power and cooling costs. In total, the company estimates that those measures have helped save FranklinCovey Co. more than $500,000 in IT costs.

Avoided $150,000 on Call Center Setup

By employing Microsoft technologies, FranklinCovey Products achieved seamless connectivity for its order-entry operations and realized significant savings on hardware and licenses compared to the alternative. By setting up its Pune call center solution on Windows Server 2008 Datacenter and using Terminal Services to connect users to the corporate network, it reduced the required physical servers from eight to one, and shortened deployment time significantly. “Not only did we get the solution with Terminal Services and Hyper-V for $150,000 less than the other solution we considered, but we were able to get the call center up and running in less than three weeks,” says Connelly. “With the other connectivity solution, and without Hyper-V, it would have taken two to three months.”

Minimized Startup Costs for New Operation

FranklinCovey Products also saved licensing costs through the Microsoft Enterprise Agreement and by deploying virtual servers on Windows Server 2008 Datacenter with Hyper-V. “We save about 25 percent on licenses with the Enterprise Agreement, and we saved at least another $15,000 on licensing with Windows Server 2008 Datacenter,” says Connelly. “We only pay for four processor licenses even though we have 18 virtual servers.” The company will realize additional licensing and hardware savings as it deploys more virtual servers.

“Moving to Hyper V allowed us to cut $75,000 off our hardware expenses for the new company right off the bat, and we expect to double that savings when we’ve completed deployment of 30 virtual servers,” says Gordon.

Reduced Testing Time by 70 Percent

With its Hyper-V-virtualized test lab, both companies can quickly provision new servers and test new technologies or changes to the network without risking damage to the production network. “The performance of the virtual machines on Hyper-V is incredible, and if you have to reboot, it only takes about two minutes,” says Gordon. “So, if I try out a change in the test lab and it causes a problem, I can just go to the last snapshot and start over. Based on the recent testing we did with Office Communications Server, we estimate that building the test environment on Hyper-V reduces testing time by about 70 percent.”

Expedited Deployment

The combination of Hyper-V and Microsoft System Center server management tools makes it possible for Gordon to manage two separate environments—one for FranklinCovey Co. and one for FranklinCovey Products. Rather than waiting weeks for a physical server to arrive and taking several hours to make sure the server image has the right drivers, he can provision a virtual server on Hyper-V in just minutes.

“Splitting the two companies almost doubled the number of servers, but I’ve been able to manage both domains because I use System Center Configuration Manager for updates and management, and Hyper-V to set up a server in 20 to 30 minutes whenever somebody needs one,” says Gordon.

FranklinCovey Co. notes that the Software Assurance benefits included in the Enterprise Agreement, such as Training Vouchers and Packaged Services help expedite software deployment. “We expect that SharePoint Deployment Planning Services will help us deploy Office SharePoint Server 2007 much faster than without that extra guidance,” says Peters. In addition, the Microsoft self-paced E-Learning sessions available through Software Assurance have reduced training costs.

By expediting server provisioning with Hyper V, and by simplifying the process and reducing the cost of licensing with a Microsoft Enterprise Agreement, both FranklinCovey Co. and FranklinCovey Products are able to quickly respond to the changing needs of their employees as the companies grow and evolve. “The savings achieved with Terminal Services, Hyper-V technologies, and the Enterprise Agreement is used to fund other IT projects that will help further increase productivity and reduce costs, which helps create a continuous circle of benefits,” says Peters.

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To learn more about Microsoft Volume Licensing, visit:
www.microsoft.com/licensing  

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:
www.microsoft.com

For more information about EDS products and services, visit the Web site at:
www.eds.com 

For more information about FranklinCovey Co. and FranklinCovey Products, visit the Web site at:
www.franklincovey.com