4-page Case Study
Posted: 3/26/2012
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Essar Oil Oil and Gas Firm Adopts Private Cloud Model to Save U.S.$ 59,551 Annually in Opex

Essar Oil Limited, part of the Essar Group and a fully integrated company, is on the road to expansion. There was an urgent need to upgrade its server infrastructure in order to increase availability and resilience, and to simplify management and reduce costs. Additionally, it needed to reduce its energy consumption. The company decided to set up a private cloud solution built on Windows Server 2008 with Hyper-V technology. It also used Microsoft System Center solutions to manage its virtual and physical infrastructure. The new platform is easier to manage, automates IT processes and requires fewer resources. Overall, the solution saved the company approximately INR 29.18 lakhs (U.S.$59,511) in operational costs annually, improved server utilisation, and supported the expansion of the business.

Situation

Essar Oil is an Indian integrated oil and gas company of international size and scale that is part of the Essar Group based in Mumbai, India. Essar Oil's assets include a 14 MTPA refinery at Vadinar in Gujarat, which started commercial production in May 2008. Built with state-of-the-art technology it can produce petrol and diesel suitable for use in India, as well as for advanced international markets.

Essar Oil serves retail customers through a modern, countrywide network of over 1,400 operational retail outlets, with over 250 of them in various stages of construction. It is the first private Indian company to enter petro retailing, looking beyond urban markets and reaching out to consumers in India’s heartland.

Though Essar Oil has been an effective and intelligent user of prevailing business technology, this too presented its own set of challenges. The company’s data center in Vadinar comprised 60 Rack Servers running in a mixed environment. Existing underlying servers had grown old and were difficult and expensive to manage. These required replacement. The increasing hardware was placing greater demands on the data center’s cooling needs and power consumption. Additionally, the available, physical space was coming under tighter constraints.

To sharpen its competitive edge, Essar Oil wanted a solution that could leverage new technologies. The  idea was to simplify its IT environment while addressing dynamic business needs. “To overcome our challenges, we first needed to ensure that our technology environment was up to date,” says Gaurang Doshi, Delivery Head – System, Essar Group. “Our criteria were quality, security, and manageability.”

Solution

Essar Oil wanted an environment that provided a high level of flexibility to meet its needs, while at the same time was easy to manage and cost-effective to run. It was intrigued by the capabilities and possibilities of a private cloud environment.

The two key ingredients of a private cloud solution were virtualization and centralized management.

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* We were able to decommission one full rack in our server room and now our total server environment is hosted out of one single rack. Overall, we are saving INR 1.16 lakh per server per year post virtualization, and we estimate an eventual saving of INR 29.18 lakhs annually. Five years down the line our savings would mount to INR 1.45 crore. *

Gaurang Doshi
Delivery Head - System
Essar Group, CTO Office

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After evaluating several virtualization technologies, including VMware and Microsoft, Essar Oil chose to deploy the Microsoft Windows Server® 2008 operating system with Hyper-V technology as the foundation. Hyper-V, the Microsoft hypervisor-based server virtualization technology enables organizations to make the best use of their server hardware investments by consolidating multiple server roles as separate virtual machines (VMs).

Essar Oil particularly chose to go with a Microsoft solution because of its Enterprise Agreement with Microsoft. Also, the fail-over cluster capability of Hyper-V, which helps ensure that staff can avail of higher server and application availability, fully satisfied its requirements. “We wanted to pave the way for cloud which today is an important trend to impact the direction of business in the company,” says Gaurang Doshi. “Our decision to go with Microsoft was completely based on greater functionality, ease of use, lower total cost of ownership (TCO), and the IT team’s preference.”

Essar Oil’s IT environment currently consists of 10 critical applications, including Sparsh (used for attendance reporting), OMRBV (Operations Manager Role Based Visualization, which is used for reporting and integration), LIMS (used for laboratory sample testing and reporting), and Atoms (used for oil tank movement). These are all tightly integrated with production and have a high business impact. The company has taken advantage of Hyper-V to virtualize its critical applications without spending money on new hardware.

The deployment of the virtualized environment began in August 2011 and was successfully completed in October the same year. Essar Oil has built its entire Hyper-V infrastructure on Blade Server Technology with high availability (N+N redundancy) along with EMC data storage to have flexibility in accommodating new requirements in future. Today, the company has five physical servers and one enclosure running Hyper-V, operating a total of 25 virtual servers.

To maximize the benefits of a private cloud environment, the company also deployed Microsoft System Center solutions to help simplify server management. Microsoft System Center Operations Manager 2007 R2 is used to monitor all its virtual machines and eventually, all physical servers. This specifically includes monitoring the state, health, and performance of its server infrastructure.

To manage the virtual environment, the company has installed and configured Microsoft System Center Virtual Machine Manager 2008 R2. It enables centralized management of physical and virtual IT infrastructure, and increases server utilization and dynamic resource optimization across multiple virtualization platforms.

System Center Virtual Machine Manager Self-Service Portal 2.0 is being used to simplify the process of on-boarding a new business unit infrastructure request. Now, data center administrators can register business unit requirements in one centralized location. Business unit administrators can then request resources from the organization’s infrastructure pool to host their IT services. Implementation of Self-Service Portal also simplifies the process for data center administrators to validate and provision a business unit IT administrator’s infrastructure requests.

The company is also using Microsoft System Center Data Protection Manager 2010 as a backup and disaster recovery system to integrate with its new virtual environment and automatically back up its critical Microsoft workloads.

Gaurang Doshi says, “Virtualizing our server infrastructure was a critical component of our technology strategy. With Hyper-V we achieved better utilization of hardware, leading to fewer physical servers, greater agility, reduced deployment and maintenance costs, and greater scalability. Overall, we are enhancing efficiency, flexibility, and growth potential for the future.”

Benefits

Through its use of Microsoft private cloud technologies, Essar Oil consolidated its server environment and reduced the number of administrative tasks performed by IT staff. By developing its virtualized infrastructure, the company has been able to reduce costs, boost application availability, and align its IT processes to its business goals. It is using Hyper-V to allow for growth and to ensure that any future business needs are met.

Reduces Hardware and Maintenance Costs

Virtualization was essential for Essar Oil to achieve maximum value for its server hardware investment. By virtualizing its server environment, the company was able to add more server functionality without incurring the costs of new servers. “We have significantly reduced our number of physical servers,” says Gaurang Doshi. “We went from 70 servers to 45 ― a 35 percent decrease. Hyper-V makes a massive financial difference to our overall business. We have significantly reduced our hardware costs by 69 percent.”

Virtualized hardware reduces power and cooling energy consumption by 22 percent for Essar Oil. “We have added many benefits, from both an IT and business perspective, by deploying new server technology that consumes less power and lowers our power costs,” says Gaurang Doshi. “That’s a big win for our management.”

Maximizes Performance with Simplified Management

The new private cloud environment centralizes management of virtual machines ― accelerating, provisioning, and improving server utilization. With System Center Virtual Machine Manager, IT personnel gained a simple-to-use management solution to maximize the performance of its virtualized environment. Administrators are using System Center Virtual Machine Manager and System Center Operations Manager to automate many routine processes, thus saving time and reducing administrative overheads. Using Microsoft System Center Data Protection Manager 2010 the company can replicate its virtual environment seamlessly to its disaster recovery environment.

“Previously, with 70 servers, we had to back up each server, which was a time-consuming process,” says Gaurang Doshi. “Now, with virtualization we can proactively manage our servers and also create a test and development environment with ease.”

Reduces Opex Cost

Virtualization has helped consolidate practically five servers into a single virtual server. Gaurang Doshi says, “We were able to decommission one full rack in our server room and now our total server environment is hosted out of one rack.” He adds, “Overall, we are saving INR 1.16 lakh per server per year post virtualisation, and we estimate an eventual saving of INR 29.18 lakhs annually. Five years down the line our savings would mount to INR 1.45 crore.”


Microsoft Virtualization

Microsoft virtualization is an end-to-end strategy that can profoundly affect nearly every aspect of the IT infrastructure management lifecycle. It can drive greater efficiencies, flexibility, and cost effectiveness throughout your organization. From accelerating application deployments; to ensuring systems, applications, and data are always available; to taking the hassle out of rebuilding and shutting down servers and desktops for testing and development; to reducing risk, slashing costs, and improving the agility of your entire environment—virtualization has the power to transform your infrastructure, from the data center to the desktop.

For more information about Microsoft virtualization solutions, go to:
www.microsoft.com/virtualization

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.coms

For more information about Essar Oil products and services, call +91 9879103033 or visit the website at:
www.essar.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Solution Overview



Organization Size: 3000 employees

Organization Profile

Essar Oil Limited is an India-based company engaged in the exploration and production of oil and gas, refining of crude oil, and marketing of petroleum products.


Business Situation

Essar Oil wanted to curb physical server growth and optimize its IT environment. It needed a superior technology platform that would reduce costs, increase efficiency, and simplify management.


Solution

Essar Oil built a private cloud solution where it virtualized its server environment using Windows Server 2008 with Hyper-V technology. The company is also using Microsoft System Center solutions to manage its virtual and physical infrastructure.


Benefits

  • Reduces hardware and maintenance costs
  • Maximizes performance with simplified management
  • Reduces Opex cost


Software and Services
Microsoft System Center

Vertical Industries
Process Manufacturing & Resources

Country/Region
India

Business Need
Cloud & Server Platform

IT Issue
  • Private Cloud
  • Virtualization

Languages
English

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