4-page Case Study
Posted: 9/17/2010
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Childrens Hospital of Aurora Hospital Virtualizes Servers to Cut IT Costs by $1.8 Million, Simplifies IT Management

The Children’s Hospital of Aurora, Colorado, wants to direct as much of its nonprofit budget as possible to helping families rather than buying new servers. After using server virtualization to stem server proliferation, the hospital wanted to further lower data center costs, simplify a complex and expensive software landscape, and improve application availability. It deployed the Windows Server 2008 R2 operating system with Hyper-V technology as well as several Microsoft System Center data center solutions. By gaining an all-Microsoft server management infrastructure, The Children’s Hospital expects to trim U.S.$1.8 million from its IT budget in hardware, energy, and software licensing costs. Today, the IT staff is far more efficient—even with fewer people—and can spend more time creating new business solutions and ensuring high application availability.

As a private, not-for-profit pediatric healthcare network, The Children's Hospital is dedicated to caring for kids of all ages and at all stages of growth. It provides comprehensive pediatric care at its main campus in Aurora, Colorado, and at 15 Network of Care locations throughout north-central Colorado. The hospital employs more than 3,000 people, 1,000 of which are pediatric specialists. In addition to providing healthcare for children, The Children’s Hospital works hard at medical research and advocacy efforts.

Every area of the hospital aims to run as efficiently as possible, to optimize service, minimize operational costs, and maximize funding for healthcare services and research. The organization’s IT department is no exception. In 2007, when the hospital’s data center was overflowing with nearly 700 servers, many running under capacity, the IT staff used an early virtualization software product to eliminate about 250 physical servers. Every server eliminated delivered savings in hardware costs, operating system licensing, power and cooling, data center real estate, and management effort.

Despite having streamlined its physical server holdings, however, The Children’s Hospital IT staff had its hands full with routine infrastructure management tasks, which left little time to roll out new IT services that could benefit hospital staff and patients. “Our software imaging needs are quite diverse and complex,” says John Hall, Microsoft Engineer in The Children’s Hospital IT organization. “A full 60 percent of our server image deployments were done manually using a time-consuming and costly process.”

* [With System Center and Hyper-V] we can do more with a smaller staff; plus, we’ve been able to redeploy staff to higher-value projects. *

John Hall
Microsoft Engineer, The Children’s Hospital

Even after making a significant investment in a server deployment tool, Hall was personally spending 30 hours a month on server builds (2 hours on each server, with an average of 15 new servers deployed a month). “I had many other responsibilities, so I needed to get more efficient at this,” Hall says. Also, even with automated tools, software images were still quite diverse, and the inconsistent images created security concerns.

In addition to trying to reduce the cost and effort of managing a complex and expanding IT environment, The Children’s Hospital desired greater insight into the workloads running on its virtual machines so that it could maintain high availability of those applications. It could not get the insight it desired using its existing management tools, so it licensed a third-party monitoring solution. Still, the IT staff could not get the level of proactive insight into its virtual machines that it wanted, and thus the availability levels it desired. “The more dependent that we became on technology, the greater the need to keep IT services available all the time,” Hall says. “We were adding more monitoring and management tools, which made our environment more complex and expensive and required more staff time to manage.”

The time spent juggling multiple infrastructure tools and manually deploying new servers for new services left the IT team with less and less time to respond to business requests for new services. “We exist to help our healthcare professionals help our patients, and that priority was getting edged out by hours of routine data center infrastructure maintenance,” Hall says.

In 2008, when The Children’s Hospital began to upgrade its server operating systems from Windows Server 2003 to the Windows Server 2008 operating system, the local Microsoft account team encouraged Hall to investigate the Hyper-V virtualization technology that was built into Windows Server 2008 Datacenter and Windows Server 2008 Enterprise. “I could see that Hyper-V was going to be a very important player in server virtualization and was interested in seeing what it could do for us,” Hall says. “The best part was that it was included as part of the operating system. Also, we were very impressed with Microsoft System Center Virtual Machine Manager 2008 R2, which has powerful virtual machine management capabilities. With the economy ailing and the hospital looking for ways to save money, it was a deal we just couldn’t pass up.”

Virtualizing More Workloads
In mid-2009, The Children’s Hospital deployed a mix of Windows Server 2008 R2 Datacenter and Windows Server 2008 R2 Enterprise on 17 physical host servers. The Children’s Hospital upgraded to Windows Server 2008 R2 for its live migration feature and reliability improvements. The Enterprise edition provides licensing for the host server and four virtual machines, and the Datacenter edition provides licensing for the host server and an unlimited number of virtual machines. The hospital’s Hyper-V hosts are Dell PowerEdge R710 servers containing two Quad-Core Intel Xeon processors. Virtual machine density varies from 4 to 25 virtual machines on each host. The hospital is gradually migrating all of its VMware workloads to Hyper-V.

To date, it has created 76 virtual machines on its 17 hosts:

  • Six hosts are configured as a cluster and run Windows Server 2008 R2 Datacenter. This cluster hosts domain controllers, the hospital’s time-and-billing system, fax servers, and several clinical applications.

  • Nine hosts are stand-alone servers and run Windows Server 2008 R2 Enterprise. These computers host the hospital’s Microsoft Exchange Server 2007 messaging infrastructure and multiple databases running Microsoft SQL Server 2008 and Microsoft SQL Server 2005 data management software.

  • Two hosts are standalone servers and run Windows Server 2008 R2 Standard. Their virtual machines are used for new application testing.

Simplified Management Using Connected Tools
At the same time that it deployed the Hyper-V hosts, The Children’s Hospital purchased the Microsoft System Center Server Management Suite Datacenter license to gain cost-effective access to a suite of Microsoft System Center data center solutions. These programs help IT staffs simplify management of physical and virtual infrastructures by using a set of tools. “The Microsoft licensing model makes it very attractive to license the entire suite of Microsoft management products,” Hall says. “We also liked the idea of using Microsoft software end to end, for monitoring, reporting, virtual machine management, and backup. A single-vendor solution is more solid and makes for easy management.”

* We were adding more monitoring and management tools, which made our environment more complex and expensive and required more staff time to manage. *

John Hall
Microsoft Engineer, The Children’s Hospital

To manage both the 17 host servers and all the virtual machines running on them, Hall uses Microsoft System Center Virtual Machine Manager 2008 R2. “Being able to use virtual-machine templates to quickly set up virtual machines, and having a single console to manage the host servers running both our hypervisors, are real timesavers,” Hall says. “I can assign access to certain teams, such as an operations or test team, so that they can securely gain access to virtual machines needed to do their jobs. Administering the mixed virtual and physical server environment is incredibly easy, and migrating virtual machines from our other hypervisor to Hyper-V is simple and fast.”

The IT staff uses Microsoft System Center Operations Manager 2007 R2 to monitor all its virtual machines and, eventually, all its physical servers. “System Center Operations Manager routes virtual-machine data into System Center Virtual Machine Manager so I can monitor the health of all 76 virtual machines from one console,” Hall says. “For example, I can see the amount of memory that a server is using, the CPU cycles it’s drawing, and its performance.” The hospital is moving toward monitoring all physical servers, virtual machines, and applications with System Center Operations Manager.

Microsoft System Center Configuration Manager 2007 is used to deploy applications and security updates to servers and to its 5,500 desktop computers. Eventually, Hall will replace another program with System Center Configuration Manager for the server-build process and eliminate that extra licensing fee.

The hospital was also able to use Microsoft System Center Data Protection Manager 2010 to replace expensive backup programs. “There’s no better solution for backing up and restoring virtual machines in a Hyper-V environment,” Hall says of Data Protection Manager. “We’re using it to back up our Exchange Server 2007 environment, our databases, and all our other Microsoft workloads.”

By using System Center solutions, the hospital has a single familiar tool set that offers integrated lifecycle management across its physical and virtual infrastructure, including operating systems, applications, and hardware. The IT staff can create software images, deploy software, monitor all software assets, create and manage virtual machines, monitor and manage both physical and virtual servers, and back up physical and virtual workloads, all using a common framework and interface.

By adding Hyper-V and licensing System Center management solutions to its data center mix, The Children’s Hospital has trimmed hardware and software costs by U.S.$2 million and boosted the availability of key applications. The IT staff is more efficient by using automated deployment, management, and monitoring tools, and has more time to meet the IT needs of hospital staff.

Anticipated Savings of $1.8 Million
To date, the Children’s Hospital has virtualized 40 percent of its server holdings and aims to have 60 percent virtualized by the end of 2010. “Once we utilize the full potential of our Hyper-V hosts, we will be able to avoid purchasing 200 servers at around $7,000 apiece, which is a $1.4 million avoidance,” Hall says. “Power, cooling, and software savings bring total savings to around $1.8 million.”

* Being able to use virtual-machine templates to quickly set up virtual machines, and having a single console to manage the host servers running both our hypervisors, are real timesavers. *

John Hall
Microsoft Engineer, The Children’s Hospital

Specifically, power and cooling savings on 200 servers amount to about $128,000 annually. Licensing Microsoft System Center solutions using the Server Management Suite Datacenter license saved The Children’s Hospital $200,000 over three years as opposed to licensing the programs separately, and operating system licensing is much more cost-effective using Hyper-V. “We pay $1,500 to license Windows Server on a single physical server but $2,300 to license Windows Server 2008 R2 Datacenter with Hyper-V, which supports 20 to 25 virtual machines,” Hall says. The hospital will also be able to eliminate many of its third-party management programs, which will provide an estimated annual savings of $130,000.

Optimized Performance and Availability
By using the monitoring and reporting capabilities of System Center Operations Manager and Virtual Machine Manager, The Children’s Hospital IT staff has much better insight into the workloads running on its virtual machines. “The detailed performance and system health data that we get from integrated System Center solutions enables us to be more proactive in managing our environment,” Hall says. “We can easily see if a virtual machine is getting overloaded so that we can move the workload to another host server before it causes the application to slow or fail. This ensures great performance and availability of applications on which the hospital staff depends.” In addition, more consistent server builds as a result of using System Center Configuration Manager means less opportunity for security breaches and better regulatory compliance.

IT Staff More Efficient with Simplified Infrastructure
With fewer physical servers and software programs to manage, and automated tools to help, the IT staff is more efficient and effective. “When we had a more heterogeneous software environment, it took time to determine the root cause of any problem,” Hall says. “Now, with the operating system, hypervisor layer, management applications, monitoring tools, and backup solution all from Microsoft, we have one place to call.”

Since virtualizing its servers with Hyper-V and deploying System Center programs, two individuals have left the hospital IT staff, but there has been no need to replace them. “We can do more with a smaller staff; plus, we’ve been able to redeploy staff to higher-value projects,” Hall says. “It takes 15 minutes to build a virtual machine as opposed to 2 hours to deploy a physical server. In server deployment alone, I’m spending only 4 hours a month, rather than the 30 hours a month I previously spent.”

Greater Business Agility
With the time it has freed up, The Children’s Hospital IT staff can better fulfill its primary objective of helping the hospital’s healthcare providers do their jobs better. “Now, when departments come to us with request for new services, we can take care of them a lot faster,” Hall says. “We can roll out a virtual machine in an hour instead of a week—or business users can self-service their own virtual machine needs—and we have more time to develop new applications that make the hospital a more modern, responsive healthcare provider. We can better take care of our internal groups, so they can take better care of kids.”

Microsoft System Center
System Center solutions help IT pros manage the physical and virtual information technology (IT) environments across data centers, client computers, and devices. Using these integrated and automated management solutions, IT organizations can be more productive service providers to their businesses.

For more information on Microsoft System Center please visit:

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:

For more information about The Children's Hospital, call (720) 777-1234 or visit the website at:

Solution Overview

Organization Size: 3000 employees

Organization Profile

The Children’s Hospital in Aurora, Colorado, provides comprehensive pediatric care to children throughout north-central Colorado. It employs more than 3,000 healthcare professionals.

Business Situation

The hospital wanted to lower data center costs and help its IT staff be more efficient. It also wanted to gain better insight into critical applications to avoid downtime, and speed new-service rollout.


The IT staff deployed Windows Server 2008 R2 with Hyper-V to virtualize servers, and Microsoft System Center data center solutions to simplify management of a physical and virtual environment.


  • Savings of U.S.$1.8 million
  • Improved availability
  • IT staff more efficient
  • Greater business agility

Software and Services
  • Windows Server 2008 R2 Datacenter
  • Microsoft Hyper-V
  • Windows Server 2008 R2 Enterprise
  • Windows Server 2008 R2 Standard
  • Microsoft System Center Configuration Manager 2007
  • Microsoft System Center Data Protection Manager 2010
  • Microsoft System Center Operations Manager 2007 R2
  • Microsoft System Center Virtual Machine Manager 2008 R2

Vertical Industries
Health Provider

United States

Business Need
  • Cloud & Server Platform
  • Cost Containment

IT Issue
Desktop, Device and Server Management