Totem Ocean Trailer Express (TOTE) offers twice-weekly freight and cargo shipping services to Alaska and prides itself on reliable service with electronic tracking of every business step. As TOTE became more dependent on technology, however, server costs began to rise, and worries about availability mounted. To reduce costs and improve availability, TOTE deployed Windows Server 2008 with Hyper-V to expand its use of virtualization, and Microsoft System Center data center solutions to streamline management work. To date, TOTE has reduced IT costs by U.S.$80,000 and could cut its energy costs by $10,600—plus, the company is being a better environmental citizen by curbing its energy use. With workloads running on virtual machines, TOTE can ensure availability, and because IT staff can provision a virtual machine in a mere 20 minutes, TOTE can immediately meet new business needs.
Situation
Totem Ocean Trailer Express (TOTE) is a privately owned corporation operating a fleet of Roll-on/Roll-off (Ro/Ro) cargo ships that sail between the Ports of Anchorage, Alaska, and Tacoma, Washington. Ro/Ro service differs from container shipping in that cargo is not lifted but quickly driven onto and off the vessel using tractors. Automobiles are also driven directly on and off the ship. This allows for expedited, economical delivery, because it eliminates costly and time-consuming crane loading.
TOTE also provides overland highway and intermodal connections throughout greater Alaska, the lower 48 United States, and Canada. In operation since 1975, TOTE today transports about 50 percent of all goods to Alaska. The company, based in Federal Way, Washington, near Seattle, has 155 employees.
Mounting IT Costs
TOTE is committed to meeting customer needs and providing flexible service in a timely fashion. When oil prices rose in 2008, TOTE began a concerted effort to take costs out of the business. Under the direction of Greg Heitlauf, Director of Information Technology at TOTE, the Infrastructure Team, consisting of System Administrators Josh Howell, Jim Brossard, and Patrick Stead, realized that it could more aggressively address growing data center costs.
“We usually add servers at a rate of about 10 a year to accommodate normal business growth, but between 2005 and 2008, we experienced a rapid expansion of our IT development environment for a new enterprise resource planning system, business analytics system, and e-commerce portal,” Heitlauf explains. “Our server count went from 40 to 80. Also, deploying one application per server was the accepted way to control risk, but this contributed to server proliferation and server underutilization.”
The increase in servers also increased energy costs. TOTE had to install additional electrical drops in the data center, which by 2009 was nearing capacity. Infrastructure management work also increased, straining Heitlauf’s small staff. “It took a week or more to order, unpack, rack, cable, test, and load software on each server,” Brossard says. Patching servers took all day, and monitoring, management, and backup work was also increasing.
Heitlauf adds, from management’s perspective, “Our headcount costs would rise right along with our hardware and energy costs if we didn’t do something different.”
Maintaining High Availability
TOTE was not only concerned about reducing its mushrooming IT costs, but also with increasing IT availability. Whereas container ships spend 24 or more hours in port having containers lifted on and off by crane, TOTE ships spend just six hours in port while trailers and automobiles are driven up and down massive ramps to unload and load cargo. Many of the goods that TOTE transports are perishable, and its ships are on extremely tight delivery timetables. Every aspect of the shipping and billing process is tracked electronically, which means that the TOTE IT infrastructure has to be available at all times.
“We’ve built our business model around having efficient systems and having them up all the time,” says Hugh Simpson, Chief Financial Officer at TOTE. “We know when a trailer comes through a gate, what’s in it, when it gets put on the ship, when it arrives, when it rolls off the ship, and when the customer picks it up. If our systems aren’t available, the citizens of Alaska don’t get the goods they need, TOTE loses a lot of money, and our customer’s reputation is damaged.”
“We sell reliability,” Heitlauf adds. “If we’re not shipping, food is not on the shelves, cars aren’t in lots, and clothes aren’t in retail stores. It’s critical that our line-of-business, e-commerce, and EDI [electronic data interchange] systems, and ship servers remain up and running. If we have trucks at the gate and we can’t process their deliveries, it puts our sailing schedule at risk. If a ship stays in port too long and misses a tide, it costs us approximately $50,000 per hour of delay. We want our ships sitting outside the shoals of Cook Inlet ready to unload when the tide turns. To ensure that, our IT systems have to be available to track arrival, unload, cargo availability, and loadback status live, to the minute.”
Competing Successfully Requires Increased Agility
Last but not least, as the transportation business becomes more competitive, TOTE needs to be able to roll out new services quickly, ahead of the competition. “We don’t want to spend weeks specifying, ordering, and setting up servers,” Heitlauf says. “Yet, when we needed a new test environment for a new development effort, it required a lead time of a month or more. This slowed business agility.”
Solution
For several years, TOTE had used Microsoft Virtual Server 2005 for server virtualization in its test area. With virtualization software, the IT staff can use software to create multiple virtual servers within a single physical host server. However, “With Virtual Server 2005, we didn’t have a central point from which to manage all our virtual machines,” says TOTE System Administrator Patrick Stead. “We had to log on to each virtual host server manually, which was a lot of work.”
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Since deploying Windows Server 2008 with Hyper-V, we have saved $80,000 in hardware costs. We will save an additional $30,000 over the next three years in licensing costs. |
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Greg Heitlauf
Director of Information Technology, Totem Ocean Trailer Express |
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Despite these inconveniences, the Infrastructure Team remained certain that the answer to the company’s data center challenges lay with virtualization. Fortunately, by early 2009, virtualization software had become more advanced, with more vendors entering the market.
One of these vendors was Microsoft, which introduced the Windows Server 2008 operating system with Hyper-V virtualization technology in late 2008. The team evaluated Windows Server 2008 Datacenter with Hyper-V, and also looked at VMware, a competitor’s product.
“We were, of course, familiar with Virtual Server 2005, so we knew that our skills would easily transfer to the product,” Heitlauf says. “Also, the price was great [included with Windows Server 2008 Datacenter and Enterprise]. VMware was the mature player in the field, but we are a small company trying to control costs, and we simply couldn’t ignore a free alternative.”
Howell adds, “With Windows Server 2008 Datacenter, you pay once for the host licensing, and then licensing for all the guests [the virtual machines] is free. With VMware, you pay for every host and guest license. Plus, we knew that Hyper-V had the capabilities and performance that we needed and would be a perfect fit for us. Some virtualization technologies require a lot of expertise and investment, both in dollars are resources, but Hyper-V didn’t have those barriers for the small to midsize business.”
Forty Virtual Machines on Six Hosts, with Room to Grow
In mid-2009, TOTE deployed Windows Server 2008 Datacenter with Hyper-V on six Quad Core Intel Xeon processor–based servers, and to date has created 40 virtual machines across those six hosts. “We got Hyper-V deployed within a morning, and all our existing virtual machines ran without interruption when we transferred them to the new operating system,” Howell says. Each virtual machine runs either Windows Server 2008 Standard or Enterprise, or the Windows Server 2003 R2 operating system.
“We can scale to 60 virtual machines across those six hosts,” Brossard adds. “To date, we have virtualized 52 percent of our servers companywide.” These include those running the company’s e-commerce system, enterprise resource planning system, its Microsoft Office SharePoint Server 2007 collaboration and document-sharing sites, IT management tools, and others. TOTE also installed Windows Server 2008 Datacenter on another server at an offsite disaster-recovery location, with four more Hyper-V hosts planned for that location.
Compatible Management Programs
Even before deploying Windows Server 2008 Datacenter and Hyper-V, TOTE ran several Microsoft System Center solutions in its data center to centralize and simplify routine server management chores. It used Microsoft System Center Operations Manager 2007 to monitor physical servers and issue automatic problem alerts, and Microsoft System Center Data Protection Manager 2007 to automatically back up server workloads onto disks and tapes for improved data protection.
When TOTE deployed Hyper-V, it added Microsoft System Center Virtual Machine Manager 2008 to the management mix. System Center Virtual Machine Manager 2008 provides a single console from which the Infrastructure Team can create virtual machines and monitor and tune its virtual infrastructure. The team can proactively adjust processing and storage resources to maintain high performance and availability, monitor all backups, and move workloads between virtual machines and across physical hosts. TOTE also upgraded its Microsoft license to the Microsoft Server Management Suite Datacenter license, which enables the company to license all its System Center solutions more cost-effectively by packaging 11 popular Microsoft programs under a single licensing bundle.
“We didn’t have the personnel resources needed to recreate every one of our physical servers from scratch,” Howell says. “We had to use the P2V [physical-to-virtual] tool in System Center Virtual Machine Manager 2008 for this task, and I was very skeptical at the outset. I thought the capabilities as advertised sounded too good to be true, but it’s worked quite well, and it’s great knowing that virtualizing a workload is very safe, and easy to roll back.”
Deploying a new virtual machine takes just 20 minutes using the virtual-machine templates included in System Center Virtual Machine Manager 2008. Howell even uses virtual machines to simplify and safeguard physical servers. “When we have to upgrade an application running on a critical physical server, we use System Center Virtual Machine Manager 2008 to create a virtual copy of the server workload, test-upgrade the application to prove the process, and once the upgrade has succeeded on the physical server, erase the temporary virtual copy,” Howell continues. “Additionally, the virtual snapshot process gives us a fail-proof rollback path for virtual machines, and really reduces risk. I can now roll back any server workload to any point in time.”
Benefits
Using Microsoft virtualization and infrastructure software, TOTE was able to significantly reduce data center costs, reuse virtualized hardware at its disaster-recovery site, improve technology availability, heighten business agility, and support the company’s reputation for being environmentally sensitive.
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Previously, someone would come into my office and ask for new servers to support a project. It would take us a week or two to deliver that. But with Hyper-V I can say, ‘Sure. Give me 20 minutes.’ |
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Josh Howell
System Administrator, Totem Ocean Trailer Express |
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Reduces Capital and Operating Costs
“Since deploying Windows Server 2008 with Hyper-V, we have saved $80,000 in hardware costs,” Heitlauf says. “Plus, we will be able to repurpose virtualized hardware at our disaster-recovery site, which represents a cost avoidance. We will save an additional $30,000 over the next three years in licensing costs. For a company of our size, taking those kinds of cost out of our operating and capital budgets is a real win.”
Operating costs are also far lower with a virtualized infrastructure, because Heitlauf’s staff can deploy virtual machines so quickly. “I know when something is wrong with a virtual machine, because our monitoring software alerts me,” Brossard says. “We don’t have to stop virtual machines when we back them up, and I am confident that we can do bare-metal server restorations effectively, because virtual machines are so much easier to set up and provision than physical servers. Virtualization has made us much more efficient.”
In the first quarter of 2009, TOTE had to deploy a number of new servers to meet new business requirements and did so faster and more cost-effectively than ever with Hyper-V. “In just the first quarter, we saved $53,000 in hardware and deployment time,” Heitlauf says. “Hyper-V paid for itself that quarter.” TOTE also realized energy-cost avoidance with Hyper-V. Once it reaches its goal of eliminating 17 physical servers by the end of 2009, Microsoft estimates that TOTE will realize $10,600 in annual, ongoing energy savings.
Strengthens Availability
TOTE has also strengthened critical IT availability by using Microsoft virtualization and management software. Virtual machines are easy to transfer off failing physical servers. “Both times a physical server has failed, it was very easy and quick to restore the virtual machines to another host,” Howell says. “”Our restoration path is much more direct. I can restore a virtual machine to another host very quickly.”
With virtualization, TOTE also is better prepared for potential disasters. The Infrastructure Team can cost-effectively duplicate the company’s entire data center to its offsite location and transfer operations there if anything happens to the main data center. “Our cargo and entire business is safer because of our ability to move virtual machines around quickly and transparently,” Heitlauf says.
Increases Business Agility
TOTE has also realized increased business agility. “With virtualization, we have the ability to rapidly provision IT services so that the business can proceed with unique offerings or new opportunities,” Heitlauf says.
“Previously, someone would come into my office and ask for new servers to support a project,” Howell adds. “It would take us a week or two to deliver that. But with Hyper-V, I can say, ‘Sure. Give me 20 minutes.’”
For example, in a two-week period, the Infrastructure Team deployed four new virtual machines for a new project and migrated several physical-server workloads to virtual machines to free up space for another project. “We have a level of flexibility and responsiveness that we never had before,” Heitlauf says. “We can get a request in the morning and have a server up and running by noon. With Hyper-V, IT is no longer a bottleneck to business decisions and alacrity. It helps the whole business be more agile and responsive to customers and our market.”
Provides Environmental Benefits
By optimizing its infrastructure with Windows Server 2008 Datacenter, Hyper-V, and System Center programs, TOTE has been able to extend its environmental sensitivity to its data center. “We’re one of a handful of shipping companies in the world with ISO [International Organization for Standardization] environmental certification,” Simpson says. “We custom-designed our ships for the sensitive Alaskan environment, with double hulls and fuel tanks. We have very strict spill mitigation efforts and emission controls, and we don’t even use paper plates or cups in the company. By using virtualization in our data center, IT is able to be part of those efforts by reducing our IT energy footprint.”
Simpson concludes, “Virtualization has positive ramifications across our business. If we can cut our IT costs, that’s less cost that we have to push through 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 Totem Ocean Trailer Express products and services, call (800) 426-0074 or visit the Web site at:
www.totemocean.com
