4-page Case Study
Posted: 7/26/2010
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Transactiv Software Start-Up Scales for Demand Without Capital Expenses by Using Cloud Services

Transactiv facilitates business-to-business and business-to-consumer commerce through social networking websites. When the start-up company set out to build its application, it knew that it wanted a cloud-based infrastructure that offered high levels of scalability to manage unpredictable demand, but without cost-prohibitive capital expenses and IT management costs associated with on-premises servers. After ruling out competitors’ offerings based on scalability limitations and maintenance requirements, Transactiv developed its solution on the Windows Azure platform. As a result of using Windows Azure, Transactiv gained the scalability it wanted while avoiding capital expenses and saving a projected 54.6 percent of costs over a three-year period compared to an on-premises solution. In addition, the company has greater agility with which to respond to business needs.

Situation
Transactiv is a Cincinnati, Ohio–based start-up company that facilitates commerce transactions. The small company has 20 employees and focuses on building software to enable three transaction models: business-to-business, business-to-consumer, and social commerce with affiliate model. Designed for small and midsize businesses, Transactiv helps make commerce easy for companies that may not have the resources to acquire, implement, and maintain existing commerce systems. Businesses can conduct business-to-business and business-to-consumer transactions with a single online platform provided by Transactiv, and extend the transactions by few clicks to social media, such as Facebook. Companies can take virtually any catalog of products and, with Transactiv, set up different product lists, set up tiered pricing, and maintain inventory levels and procurement online; then, they can invite other businesses, consumers, vendors, or trading partners to purchase from their online catalog.

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* To build an on-premises infrastructure would have cost us in the order of tens of thousands of dollars, but with Windows Azure, that’s an expense we simply don’t incur. *

Shekar Chandrasekaran
Chief Technology Officer, Transactiv

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One of Transactiv’s key differentiators is that its commerce system takes advantage of social networking technology. With Transactiv, anyone can establish a transaction-based online presence through the popular social site Facebook. For instance, a small company can set up a Facebook page with product and pricing details and allow customers to make purchases without using complicated and costly e-commerce solutions.

In the early stages of their vision, executive leaders at Transactiv considered an on-premises, Linux/Apache/MySQL/PHP (LAMP) based architecture for its solution However, the company found that an on-premises model that required data centers with server hardware and IT maintenance and support was cost-prohibitive. “As a start-up, we really wanted to avoid the significant capital expenditures that go along with building a self-hosting architecture,” says Shekar Chandrasekaran, Chief Technology Officer at Transactiv. Beyond the capital expenses, the company knew that by building a LAMP-based architecture with on-premises server hardware—whether in its own data center or through another hosting provider—it would also have to hire additional personnel and dedicate financial resources to manage and support that architecture.

Additionally, as the company grows, it does not want to worry about latency and performance issues for customers outside of the United States. “We expect our customer base to grow well beyond the borders of the United States and into other regions,” explains Chandrasekaran. “Looking forward, it’s going to be imperative that we have a global data center presence to support our application.” Not only did Transactiv want to avoid hiring additional personnel and incurring costs for supporting a server infrastructure, it also did not want to redirect existing resources to maintenance tasks. “As a new company, we want to spend all of our time focused on enhancing our offerings,” continues Chandrasekaran.

Finally, Transactiv wanted to ensure that any technology solution that it invested in would be able to scale up as the company gains traction and grows its customer base—or, if needed, scale down to avoid underutilizing server resources, during off-peak seasons. “It was difficult to predict our usage requirements before we even have a benchmark prior to launch,” says Chandrasekaran. “As a young company, we needed a solution that would guarantee us an elastic infrastructure that could scale to meet our needs and grow as we grow.”

Solution
Transactiv knew that a cloud-based infrastructure was the best choice to meet its scalability and cost-avoidance requirements. In August 2009, Transactiv joined the Microsoft BizSpark program—which offers promising start-up companies access to software, support, and a global network of investors and partners with whom to connect—and decided to evaluate Windows Azure. Windows Azure is the development, service hosting, and service management environment for the Windows Azure platform, which is hosted through Microsoft data centers.

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* Whereas with [other offerings] we still had to worry about a certain level of maintenance with virtual servers, Windows Azure gives us a true service-oriented architecture where the maintenance is managed by Microsoft and we don’t have to worry about a thing. *

Shekar Chandrasekaran
Chief Technology Officer, Transactiv

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Transactiv quickly ruled out Google Apps as a service model that would not support its core application as a platform. The company also evaluated Amazon Elastic Cloud Compute (EC2), but found that the service required virtual server management—IT tasks that Transactiv wanted to avoid—and did not offer dynamic scaling capabilities. “Whereas with Amazon we still had to worry about a certain level of maintenance with virtual servers, Windows Azure gives us a true service-oriented architecture where the maintenance is managed by Microsoft and we don’t have to worry about a thing,” explains Chandrasekaran. “Plus, Windows Azure lets us scale elastically and has a worldwide data center presence, which is important in terms of performance.”

Scalable Architecture and Storage
Transactiv abandoned its original plans to use PHP and MySQL and built its application from the ground up on the Windows Azure platform. Developers at Transactiv used the Microsoft Visual Studio 2010 development system to develop the application in the C# programming language.

The company uses Web roles and Worker roles in Windows Azure for its computational processing. As it needs additional compute power to handle a growing list of customers and transactions, it can quickly add new Web roles and Worker roles and scale up. Similarly, if necessary, Transactiv can reduce the number of Web and Worker roles it uses equally as fast.

To optimize its storage footprint, Transactiv uses Blob storage in Windows Azure for product images. “We have a lot of images that go into any catalog that a customer creates,” explains Chandrasekaran. “With Windows Azure, we can scale up our Blob containers as we add more images without impacting our relational database storage.” Transactiv also uses Table storage in Windows Azure to capture and store application log data and performance metrics.

Transactiv uses Microsoft SQL Azure for its relational database needs. SQL Azure offers a highly available, full relational database in the cloud and is built on SQL Server 2008 technologies. The company uses a 10-gigabyte SQL Azure database to store transaction details, catalog data, and product information.

E-Commerce Through Social Networking
Transactiv will launch its application in July 2010 with several customers ready to go live. One customer represents several large school districts, and, through Transactiv, more than 4,000 teachers will be able to build online catalogs of required school supplies for students. Teachers can build a group page on Facebook with a list of class supplies and links where parents can purchase those products online through major retailers and have the items shipped to the school or to their homes.

Image of Transactiv application
Figure 1. Transactiv combines e-commerce and social networking and
enables customers to create catalogs of products for purchase on Facebook.
Another customer that is rolling out the Transactiv solution is also building an e-commerce catalog on Facebook and is using Transactiv to conduct business-to-business transactions across its network for 110 distributors worldwide.

After a successful launch in July, Transactiv already has plans for the future. In addition to its established Facebook presence, the company expects to expand to other social networking sites. Initially a solution for customers in the United States, Transactiv also plans to translate its application into multiple languages and offer the e-commerce solution in multiple countries.

Benefits
As a result of developing and hosting its e-commerce application on the Windows Azure platform, Transactiv can launch its solution with the confidence that it has a scalable infrastructure that it can quickly and cost effectively change to meet demand. The company achieved critical scalability at a lower total cost of ownership (TCO) compared to an on-premises infrastructure and avoided costly capital expenses. Plus, as the company grows and attracts customers, it can quickly respond to changing business needs with agility.

Cost Effectively Scales Up and Down
By using Windows Azure, Transactiv can quickly scale up or down. The company was initially concerned about how to avoid the common pitfalls of an on-premises server infrastructure: overbuilding and underutilizing, or underbuilding and negatively impacting application performance. However, now the company can simply change the number of instances through the control panel in Windows Azure and adjust the infrastructure while optimizing performance and costs. “Windows Azure gives me the greatest level of comfort when it comes to scalability,” says Chandrasekaran. “If we need to handle more traffic, I can do it quickly and on the fly.”

In addition, Transactiv does not have to hire additional personnel—or distract existing personnel from more strategic tasks—in order to maintain an on-premises infrastructure. “No matter how large our infrastructure grows, we don’t need employees dedicated to server and data center maintenance and can keep our costs in line,” explains Chandrasekaran.

In fact, Transactiv can maintain the high level of scalability it needs at a lower TCO compared to an on-premises solution. By using Windows Azure, the company will save 54.6 percent over a three-year period (see Table 1).

Table 1. Total Cost of Ownership of Windows Azure Over a Three-Year Period

 Windows Azure Costs (U.S.$)  On-Premises, Virtualized Costs Savings with Windows Azure (U.S.$)    Savings with Windows Azure (%)
Web / worker computing  $33,638  $54,486  $20,848  38.30%
Storage (non-relational)  $1,223  $1,247  $24  1.90%
Database computing, licensing, and storage  $26,497  $24,304  ($2,193)  -9.00%
Service Bus connections  $761  $0  ($761)  0.00%
Access Control transactions  $309  $0  ($309)  0.00%
Bandwidth  $5,642           $9,183  $3,541  38.60%
IT administration and support  $8,066  $47,240  $39,174  82.90%
Facilities and overhead  $0  $26,938  $26,938  100.00%
Setup and delivery  $156  $4,830  $4,674  96.80%
Total Cost Over Three Years  $76,292  $168,228  $91,936  54.60%





























Avoids Capital Expenses

Transactiv developed and deployed its solution, and is prepared to launch it commercially in July—all while avoiding the cost of server hardware. “In addition to the lower TCO for related operational costs, we were able to completely avoid cost-prohibitive capital expenditures,” says Chandrasekaran. “To build an on-premises infrastructure would have cost us in the order of tens of thousands of dollars, but with Windows Azure, that’s an expense we simply don’t incur.”

Quickly Responds to Business Needs
One of the things that makes Transactiv unique is that it enables e-commerce through popular social networking sites, such as Facebook. At the same time, though, the social networking component makes it difficult for Transactiv to predict usage. “Not only are we a new company with no benchmarks on which to base usage predictions, but [also,] with a social networking audience, we could see viral-scale traffic,” explains Chandrasekaran. By using Windows Azure and the on-demand scaling capabilities of the platform, Transactiv can quickly respond to business needs. “Windows Azure gives us the flexibility we need to be extremely agile and responsive, which is particularly important as a new company,” Chandrasekaran continues.

When Transactiv decides to offer its e-commerce solution outside of the United States, it is confident that the global data center presence that Microsoft offers will enable the company to expand business quickly and support a global audience without application latency issues. “Microsoft has the reliable, global data center presence that will be critical for us as we expand to bring Transactiv to customers around the world.”

Windows Azure Platform
The Windows Azure platform provides an excellent foundation for expanding online product and service offerings. The main components include:

Windows Azure. Windows Azure is the development, service hosting, and service management environment for the Windows Azure platform. Windows Azure provides developers with on-demand compute and storage to host, scale, and manage web applications on the Internet through Microsoft data centers.

Microsoft SQL Azure. Microsoft SQL Azure offers the first cloud-based relational and self-managed database service built on Microsoft SQL Server 2008 technologies.

Windows Azure platform AppFabric. With Windows Azure platform AppFabric, developers can build and manage applications more easily both on-premises and in the cloud.
− AppFabric Service Bus connects services and applications across network boundaries to help developers build distributed applications.
− AppFabric Access Control provides federated, claims-based access control for REST web services.

Microsoft "Dallas." Developers and information workers can use the new service code-named Dallas to easily discover, purchase, and manage premium data subscriptions in the Windows Azure platform.

To learn more about the Windows Azure platform, visit:
www.windowsazure.com

For more information about Microsoft BizSpark, go to:
www.microsoft.com/bizspark  

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 Transactiv products and services, call (513) 297-2822 or visit the website at:
www.transactiv.com

Additional Resources:
Training: Channel9 Windows Azure Training Course
Download: Windows Azure Training Kit
Download: Windows Azure SDK
White paper: Security Best Practices for Developing on the Windows Azure Platform
Solution Overview



Organization Size: 20 employees

Organization Profile

Transactiv is a start-up company that facilitates online transactions between buyers and sellers through social networking platforms. The company has 20 employees and is based in Cincinnati, Ohio.


Business Situation

The company wanted a scalable architecture to handle unpredictable traffic for its online commerce solution, but it wanted to avoid capital expenses and ongoing infrastructure maintenance costs.


Solution

Transactiv developed its patent-pending application, which integrates with the popular social networking site Facebook, on the Windows Azure platform with hosting through Microsoft data centers.


Benefits

  • Cost-effective scaling
  • Avoids capital expenses
  • Quickly responds to business needs


Software and Services
  • Microsoft Azure
  • Microsoft Visual Studio 2010
  • Microsoft Azure Platform
  • Microsoft SQL Azure

Vertical Industries
  • Retail and Consumer Goods
  • IT Services

Country/Region
United States

Business Need
Cloud & Server Platform

Languages
English

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