4-page Case Study
Posted: 10/29/2009
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Podravka Food Company Uses Virtualization to Boost Agility, Cut IT Costs by $2 Million

Podravka is one of the biggest food companies in southeastern Europe, with 6,500 employees and a wide variety of kitchen-staple products sold in 45 countries. Responding to customer tastes in so many markets and competing against global giants require that Podravka constantly tunes its offerings and reacts to changing tax and pricing environments. To meet business needs and contain mushrooming IT costs, Podravka deployed Windows Server® 2008 R2 Enterprise with Hyper-V™ technology and Microsoft® System Center data center solutions. By optimizing its core infrastructure, the IT staff can dynamically respond to business needs by deploying virtual machines in hours instead of weeks. Podravka will slash costs by U.S.$2 million over five years and has improved application availability, created a low-cost disaster-recovery facility, and reduced carbon emissions by 78 percent.

 

Situation

Podravka, of Koprivnica, Croatia, is one of the largest food companies in southeastern Europe. Almost every Croatian kitchen stocks Vegeta, a vegetable-based seasoning, and many Croatian children start their day with Čokolino breakfast cereals. While Podravka products are household names in Croatia, the company also distributes and sells its thousands of products in 44 other European countries. Podravka has plants and offices throughout southeastern Europe and employs 6,500 people.

Although Podravka is the largest food company in its region, it competes against global giants such as Kraft and Nestlé, so it has to keep prices low and innovation high. “We are coming out with new products all the time to respond to fast-changing consumer tastes,” says Dario Galinec, Chief Information Officer for Podravka. “We sell our products in 45 European countries, so we have many different markets to manage. With Croatia’s entrance into the European Union, we will have even more competition. We need to be incredibly agile and lean to be successful.”

However, every time the company rolled out a new product, it required corresponding IT infrastructure support—new servers to house product development, manufacturing, business analytics, marketing, financial, and other data. It took so long to deploy servers—up to four weeks for a single server—that the IT staff had a hard time keeping pace with business needs.

Also, as the company’s markets, product portfolio, and manufacturing locations increased, so did its server infrastructure. Podravka worked hard to automate key business processes, installing SAP as its enterprise resource planning system, Microsoft® Exchange Server as its messaging system, and Microsoft Office SharePoint® Server 2007 to house all nontransactional business processes. “These applications helped us be more competitive, but the downside is that our server count mushroomed,” Galinec says. By early 2009, Podravka had more than 100 servers, which gobbled energy and cooling resources, floor space, and management time. Podravka was very close to filling its data center space.

The more dependent that Podravka became on its servers, the more management worried about what would happen if they failed. “Our data center was originally not designed as a data center,” Galinec says. “We were afraid that if anything happened to that room, we would lose everything. While we do not need the availability levels that a bank might need, we nevertheless support 19 subsidiary companies around Europe, which means that our business runs around the clock. It became more critical that we provide fail-safe protection for our servers.”

Solution

Server virtualization was the logical answer. Podravka had used free VMware GSX virtualization software in its test environment, but the VMware ESX Server was too expensive to roll out in a production environment. When Microsoft announced the Windows Server® 2008 operating system with Hyper-V™ virtualization technology, Podravka was immediately interested.

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* Using Microsoft software, we were able to reduce our server holdings by 76 percent and our energy costs by 78 percent. We can funnel this $2 million savings into other areas of the business. *
Dario Galinec
Chief Information Officer, Podravka
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“With Windows Server 2008 Enterprise, the licensing model was very interesting and also affordable,” says Dražen Hegedušić, Chief Technology Officer for Podravka. Windows Server 2008 Enterprise and Windows Server 2008 Datacenter feature host-server-only licensing fees with complementary licensing for all virtual machines created on those hosts. Windows Server 2008 Enterprise also provides support for high availability clustering, whereby multiple physical servers work together as a single computer.

Lean Server Infrastructure

In early 2009, Podravka deployed Windows Server 2008 Enterprise and tested it with a few low-risk applications to see if the operating system was stable enough for production use. Very satisfied with the results, Podravka moved ahead with virtualizing the production servers that run nearly all its business-critical applications.

By this time, however—mid-2009—Microsoft had released Windows Server 2008 R2 (the second release of the Windows Server 2008 operating system), which delivered improvements in high-availability clustering, security, and virtual-machine management. Podravka decided to deploy Windows Server 2008 R2 Enterprise, chiefly to take full advantage of the Live Migration functionality. “With its enterprise-class support for virtualization and security improvements, Windows Server 2008 R2 is by far the best release of Windows Server,” says Dubravko Kopjar, IT Head of Microsoft Department at Podravka.

To date, Podravka has consolidated 102 physical servers to just 24, a more than four-to-one consolidation ratio. Two of the host servers are configured as a high-availability cluster and run Exchange Server. The remaining 22 servers host 95 virtual machines and run a total of 80 applications, including Office SharePoint Server 2007, Microsoft Office Communications Server 2007, and Microsoft System Center data center solutions. Most of the virtual machines currently run the Windows Server 2003 operating system but will be migrated to Windows Server 2008 R2 Standard as soon as possible.

“Ultimately, we will move SAP and everything we can to virtual machines running on just 24 host computers,” Hegedušić says.

Centralized Server Management

While virtualizing its data center infrastructure dramatically reduced the number of physical servers, virtual machines still need to be managed. To streamline the work of managing a mixed physical-virtual infrastructure, Podravka deployed the Microsoft Server Management Suite Enterprise, a suite of Microsoft System Center data center solutions that simplifies data center management. These interoperable software programs simplify the tasks of configuring, deploying, monitoring, and backing up servers.

Podravka uses Microsoft System Center Virtual Machine Manager 2008 to create virtual machines from templates, migrate workloads from physical servers to virtual machines, tune the performance of virtual machines, and perform many other tasks involved in maintaining a virtual infrastructure. “System Center Virtual Machine Manager provides great value to our team,” Kopjar says. “Moving an application from one physical server to another takes a great deal of time and requires good documentation. But in a virtual environment, you just right-click on the workload in System Center Virtual Machine Manager to move it to another host server. It’s incredibly easy.”

Podravka uses Microsoft System Center Operations Manager to monitor the performance and availability of both physical servers and virtual machines. This program sends alerts to System Center Virtual Machine Manager so that the IT staff has only one console to monitor.

The IT staff uses Microsoft System Center Configuration Manager to configure the software on physical servers and virtual machines, and Microsoft System Center Data Protection Manager to automatically back up data from physical servers and virtual machines to disk and later to tape.

Benefits

By optimizing its core data center infrastructure with server virtualization and integrated server management software, Podravka has increased its overall business agility and dramatically cut costs—about U.S.$2 million over five years. Using virtualization, Podravka can now apply high availability to more applications and has been able to cost-effectively create a disaster-recovery facility, which gives the company a live backup of all business-critical applications. By drastically reducing its physical servers, Podravka is also a better environmental citizen, reducing carbon emissions by 78 percent.

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* Using System Center, our staff is 20 to 40 percent more efficient. Only six people manage our infrastructure, and we will be able to accommodate more growth without increasing our headcount. *
Dubravko Kopjar
IT Head of Microsoft Department, Podravka
*

Business Agility Increased

Previously, it took Podravka four weeks to order and deploy a single physical server; with Hyper-V, it takes four hours. “When a business unit comes to us requesting a new application, we can use Hyper-V to deliver the needed infrastructure in hours instead of weeks,” Hegedušić says.

This kind of responsiveness is critical in enabling Podravka to respond quickly to tax and regulatory changes that regularly occur in its subsidiaries in 19 countries. “Recently, one of these countries announced a tax change, and we were able to comply by the next day, which is unheard of,” Galinec says. “Once Croatia is admitted to the European Union, many governmental changes related to tax policy, regulations, and other matters will impact us. Every department in the company must quickly adjust to the changes, and the IT infrastructure now has the flexibility to do so.”

Savings of $2 Million Over Five Years

Podravka has also generated big savings by virtualizing its data center—as much as $2 million over five years, which includes hardware, software licensing, IT management, and energy savings. “Using Microsoft software, we were able to reduce our server holdings by 76 percent and our energy costs by 78 percent,” Galinec says. “We can funnel this $2 million savings into other areas of the business, such as new product development, that will make us more competitive.”

For example, Podravka originally did not have a cost-effective way to create a disaster-recovery location; the company would have had to purchase 50 or 60 servers to back up its 100 production servers. Using Hyper-V, Podravka was able to back up its critical production applications to another site using just eight physical servers, a 94 percent savings.

The $2 million savings includes server management savings. “Using System Center, our staff is 20 to 40 percent more efficient,” Kopjar says. “Only six people manage our infrastructure, and we will be able to accommodate more growth without increasing our headcount.” Podravka also reduced its data center footprint by 93 percent, which opens up a great deal of growing room and obviates the need to build an expensive new data center.

High Availability Extended to More Applications

With the low-cost high availability enabled by Hyper-V, Podravka has been able to extend high availability to more applications. “With Hyper-V, we can ensure that all our applications are up all the time,” Galinec says. “As we’ve moved more business processes to Office SharePoint sites, it’s become more important that those sites be available around the clock.”

Podravka can use Hyper-V to copy a critical application and test security updates or any other change, without bringing down production applications. “When we need to apply updates or critical changes, for example, we can do it ‘live’ rather than bringing down a server,” Hegedušić says. “Also, if problems occur, we can simply roll back to any point in time using Hyper-V Snapshots. This reduces the downtime needed for testing and routine server maintenance.”

Podravka has replicated all business-critical applications on servers in its new disaster-recovery location. In the event of an emergency, the IT staff can switch all critical operations over to the disaster-recovery facility with a few mouse clicks.

Data Center Carbon Emissions Cut 78 Percent

Last but not least, the use of Microsoft infrastructure optimization software such as Windows Server 2008 with Hyper-V helps Podravka to be a better environmental citizen. Instead of using only 10 to 20 percent of server processors, the company now uses up to 65 percent of each server, which enables it to get more work out of every server kilowatt.

“With our dramatic server reduction, we’ve reduced our data center power and cooling costs by 78 percent, but we have also achieved a 78 percent reduction in carbon emissions, equivalent to saving 7,308 trees,” Galinec says. “That helps us to be a more environmentally conscious company, which is important to us and to our customers.”

Microsoft Infrastructure Optimization
With infrastructure optimization, you can build a secure, well-managed, and dynamic core IT infrastructure that can reduce overall IT costs, make better use of resources, and become a strategic asset for the business. The Infrastructure Optimization model—with basic, standardized, rationalized, and dynamic levels—was developed by Microsoft using industry best practices and Microsoft’s own experiences with enterprise customers. The Infrastructure Optimization model provides a maturity framework that is flexible and easily used as a benchmark for technical capability and business value.

For more information about Microsoft infrastructure optimization, go to:
www.microsoft.com/io

 

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 in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. 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 Podravka products and services, call 385 48 6510 or visit the Web site at:
www.podravka.com

Solution Overview



Organization Size: 7000 employees

Organization Profile

Podravka is the largest food company in Croatia and markets its products in 45 European countries. The Koprivnica, Croatia-based company employs 6,500 people, 1,000 of them abroad.


Business Situation

Podravka wanted to ensure business continuity by creating a disaster recovery facility. The IT department also wanted to better respond to business needs, optimize its infrastructure, curtail rising data center costs, and ensure server availability at all times.


Solution

Podravka deployed Windows Server® 2008 R2 Enterprise with Hyper-V™ to speed server deployment and cut server count, and Microsoft® System Center data center solutions to reduce management work.


Benefits
  • Business agility increased
  • Savings of U.S.$2 million
  • High availability for more applications
  • Carbon emissions cut 78 percent

Hardware
  • HP ProLiant blade servers with two quad-core Intel Xeon processors and 64 gigabytes of RAM

Software and Services
  • Windows Server 2008 R2 Enterprise
  • Windows Server 2008 R2 Standard
  • Microsoft System Center Configuration Manager 2007
  • Microsoft System Center Data Protection Manager 2007
  • Microsoft System Center Operations Manager 2007
  • Microsoft System Center Virtual Machine Manager 2008
  • Microsoft Hyper-V

Vertical Industries
Consumer Goods

Country/Region
Croatia

Business Need
Business Productivity

IT Issue
Virtualization

Languages
English

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