In business since 1917, today Alecta is the largest occupational pension provider in Sweden. The company’s data center, located at headquarters in Stockholm, houses more than 100 older, underutilized servers. Alecta’s IT staff deployed a Microsoft® virtualization solution to improve hardware utilization, streamline server provisioning, and increase agility in responding to business directives. The team replaced aging machines with servers running the Windows Server® 2003 R2 Datacenter x64 Edition operating system. Taking advantage of the operating system’s unlimited virtualization rights, Alecta has increased the scalability of its virtualized infrastructure. Using Microsoft Virtual Server 2005 R2 and Microsoft System Center Virtual Machine Manager, IT staff now can provision servers in an hour instead of a week, providing unprecedented service levels to the organization.
With headquarters in Stockholm, Sweden, Alecta develops and manages pension plans for 28,000 client companies and 1.7 million individual customers. Alecta’s products ensure financial security during employment and throughout retirement. The company regularly achieves returns that outperform the industry average. Despite a growing competitive market in Sweden, Alecta achieved a 70 percent market share in 2006.
To ensure this level of success, Alecta works hard to maintain effective control of its data so it can be used to best support the company’s objectives. Alecta maintains a large, centralized server farm in its headquarters in Stockholm. The data center contains more than 100 servers. The majority of these servers were running the Windows Server® 2003 Standard Edition operating system and supported file sharing, e-mail, and collaboration applications. Other servers run the IBM AIX operating system for Tivoli Storage Manager and Red Hat Enterprise Linux for an in-house voice-mail solution. The data center is also home to Alecta’s test and development labs. Alecta’s business partner, LogicaCMG, hosts all the company’s pension and financial systems at a different facility. Branch offices that employ from 1 through 10 individuals are connected to headquarters via a virtual private network.
Aging Servers Increased Costs
At the beginning of 2006, more than 90 percent of Alecta’s servers were between 5 and 7 years old, with an average utilization rate of 15 percent. The existing servers also required a disproportionate amount of time to troubleshoot performance issues. For Alecta’s IT department, this situation provided an opportunity to develop a plan to cut costs and increase efficiency at the data center. Alecta’s success hinged on how best to spend a finite amount of money to replace the aging servers.
||With unlimited virtualization rights, Windows Server 2003 Datacenter Edition is the most scalable, cost-effective, and reliable server platform for Alecta’s large-scale virtualization project.
||Rikard Nilsson, Infrastructure Architect for Microsoft Products, Alecta
“We knew that we needed to replace at least 80 of our servers,” says Rikard Nilsson, Infrastructure Architect for Microsoft Products at Alecta. “We could buy all new hardware for every one of those servers, which is a large investment. Or we could put that money towards a blade server and storage area network solution and virtualize the servers for more efficient use. The second option gave us a window of opportunity to address a wide array of issues and that is the route we took.”
For Alecta, the most immediate issue was server sprawl. Alecta was running out of floor space at its data center and even if the company had wanted to replace each machine, there would not have been room to handle an additional 80 new servers during the transition phase. The proliferation of under-used servers required a disproportionate amount of electricity to power the data center’s cooling systems. As the number of servers grew, battery backup support diminished. Purchasing and installing cabling, wiring, and rack mounts also added to the cost of supporting Alecta’s data center.
Data Center Inefficiencies Impacted Agility
Beyond the relatively simple challenges of space availability, however, it was the IT staff’s inability to promptly comply with management’s business directives that worried Nilsson. It took weeks to acquire and configure new servers. “The biggest challenge in our data center was lack of flexibility,” he says. ”We had been running a large project for developing a new core system for handling the pensions. Directives from management changed all the time. They needed different environments for system and integration testing: it could be 5 servers for 10 weeks, and then it could be 4 different servers for 2 weeks.”
For the IT department, it cost too much money to buy the servers, and then it took too long to put the orders out, make the purchases, and install the machines. Nilsson adds, “This impinges on our ability to support Alecta’s business goals and address issues. Instead, we ended up paying for our partner to do it.”
The problem of frequent manual server maintenance, exacerbated by aging machines, wasted more time and caused disruptions to the business. It was clear to Nilsson that handling the servers, cables, wiring, racks, and disk enclosures consumed too much of the data center staffers’ time. He wanted Alecta’s IT staffers to be closer to the business.
“A big incentive for the virtualization project was to save time and labor for our IT staff. I wanted everyone to be more application aware. We are technicians, not experts on pensions. At the same time, we need to know how best to manage our infrastructure so that information flows quickly through our systems and keeps the business running smoothly.”
Long-Term Virtualization Wish List
Taking the multiple issues they faced into account, Alecta’s IT staff opted to pursue a virtualization solution. Instead of buying more servers to manage fairly low workloads, they wanted to save money on hardware acquisition and maintenance by consolidating servers on more robust machines running a more scalable operating system. Instead of causing unnecessary delays to the business, they wanted to drive business success by reducing the time required to test, develop, and deploy new software and systems. And to reduce the complexity of its overall infrastructure, they wanted the same toolset for both physical assets and the new virtual environment.
While Nilsson and his colleagues did not yet have a formal virtualization strategy, they knew that this would be the beginning of a long-term investment in virtualization technologies. They wanted to put in place a virtualization strategy that they could use to create a dynamic data center that would be more responsive to business goals.
“We were looking at a large investment for the future,” confirms Nilsson. “We wanted to start with server consolidation, then move to security and failover scenarios, and then on to application virtualization and presentation virtualization. We needed a long-term partner that could offer a suite of virtualization products to satisfy our evolving needs.”
Alecta’s IT staff chose a Microsoft® virtualization solution. It deployed Microsoft Virtual Server 2005 R2 to increase hardware utilization and enable IT staff to rapidly configure and deploy new servers. Alecta evaluated VMware; however, management chose a Microsoft virtualization solution to ensure compatibility with its Microsoft-centric environment. Alecta also wanted long-term support from a single vendor. “Compared to the other options, Microsoft virtualization technologies are extremely cost effective, while providing all the functionality we require,” says Nilsson.
Upgrade to a New System
Meanwhile, Alecta chose to upgrade the company’s aging servers with Hewlett Packard servers running the Windows Server® 2003 R2 Enterprise Edition (32-bit x86) operating system. During the upgrade—for each server and application—Nilsson and his colleagues asked the same questions:
- Can it run together with other systems on existing hardware?
- If not, can it be run in a virtual server?
- If not, can it be run in a Windows Server–based blade server?
- If not, run it in a standard server.
||Compared to the other options, Microsoft virtualization technologies are extremely cost effective, yet provide all the functionality we require.
||Rikard Nilsson, Infrastructure Architect for Microsoft Products, Alecta
The Microsoft Virtual Server 2005 R2 environment for the virtual instances run on Hewlett Packard Blade 460c blade servers running the Windows Server 2003 R2 Datacenter x64 Edition operating system. Alecta is taking advantage of this operating system’s 32 gigabyte of RAM and multiple processing capabilities. However, the main reason Nilsson and his colleagues chose Windows Server 2003 Datacenter Edition was for its suitability for scalable virtualization projects.
“With unlimited virtualization rights, Windows Server 2003 Datacenter Edition is the most scalable, cost-effective, and reliable server platform for Alecta’s large-scale virtualization project,” says Nilsson. “It will also simplify the process of licensing Windows Server.”
Alecta acquired Windows Server 2003 Datacenter Edition under its Microsoft Volume Licensing agreement. Any new server licensed with Windows Server 2003 Datacenter Edition has license rights to run an unlimited number of virtualized Windows Server instances. By simply licensing the servers’ processors with Windows Server 2003 Datacenter Edition, Alecta IT staff will be able to run Windows Server 2003 Standard Edition, Enterprise Edition, or Datacenter Edition—or a combination of the three—without having to track the number of virtual machines or pay for additional Windows Server licenses.
“Windows Server 2003 Datacenter Edition is definitely the most economical platform for data center virtualization,” says Nilsson. “We calculated that we would start to save money if we run more than 7.2 virtual machines on every virtual server. We are planning on running at least 8 virtual machines on each server. An added attraction is that under Software Assurance, which is part of our licensing agreement, we can upgrade to Windows Server 2008 and take advantage of its integrated hypervisor-based technology at no extra cost. We are looking forward to the increased scalability that product will bring, with even more virtual machines supported per server.”
Virtualization for the Long Term
Alecta worked with Microsoft Gold Certified Partner TrueSec during the deployment. TrueSec consultants provided expertise and hosted workshops to educate Alecta’s IT staffers about their new virtualized infrastructure. “They were extremely knowledgeable and we took the opportunity to ask many questions to ensure a complete grounding in the technologies,” says Nilsson. “This is just the first step in a long-term virtualization plan for the enterprise.”
In May 2007, Alecta installed its first three Windows Server 2003 Datacenter Edition–based servers, one each in its lab, test, and production environments. Since then, the company has added 4 more servers, with a total of more than 30 virtual machines. The first virtualized server in the production environment hosted a Web server running Internet Information Services 6.0. Today, other applications in the production environment that are hosted on virtual servers include Microsoft BizTalk® Server 2006 R2, file-sharing applications, Windows® Deployment Services, Microsoft Office SharePoint® Server 2007, Windows XP Professional, and Microsoft System Center Configuration Manager (formerly Microsoft Systems Management Server).
“So far, our experience running virtual machines in the production environment has been great,” says Nilsson. “We can have anywhere from hundreds to a few users accessing the applications, depending on the intended audience. We have been running with no problems.”
Partnering with Microsoft
During the summer of 2007, Alecta decided to join the Microsoft Technology Adoption Program (TAP) for Microsoft System Center Virtual Machine Manager. With a growing number of virtual machines, IT management wanted to learn about this latest Microsoft System Center management product that facilitates the policy-based management of Windows-based virtual machines and physical computers.
“The TAP program gave us hands-on experience using this tool,” says Nilsson. “We were very impressed with its physical to virtual capabilities and the ability to move the virtual machines between two physical servers.”
Since deploying its Microsoft virtualization solution eight months ago, Alecta’s IT staff is no longer contending with server sprawl and inefficient server provisioning and management. With its virtualization solution based on Windows Server 2003 Datacenter Edition–based servers, Alecta has increased business agility, reduced data center costs, and simplified data center management.
Increased Business Agility
Alecta’s IT staffers are using Virtual Server 2005 to consolidate their test and development servers and to automate the provisioning of virtual machines. They are saving money by decoupling the addition of workload resources from the need to add hardware resources. “Virtualization improves our ability to respond quickly to business needs as they arise; a significant business benefit,” says Nilsson. “Before, it took weeks to acquire and provision physical servers. With Virtual Server 2005 and System Center Virtual Machine Manager, it’s down to hours. Now, Alecta’s IT department can contribute to business agility.”
Reduced Data Center Costs
Using Virtual Server 2005, Alecta’s IT staff has consolidated multiple workloads onto a unified Windows Server 2003 Datacenter Edition–based infrastructure. Alecta has achieved cost savings through lower equipment costs, improved hardware utilization, and reduced electrical consumption for server power and cooling.
||We are technicians, not experts on pensions. At the same time, we need to know how best to manage our infrastructure so that information flows quickly through our systems and keeps the business running smoothly.
Rikard Nilsson, Infrastructure Architect for Microsoft Products, Alecta
“The old 700-megahertz servers were running from 10 through 15 percent utilization with a one-application, one-server configuration,” says Nilsson. “Even though we are now running up to 15 applications per server, we are still at the same utilization rate with these more powerful machines. Ultimately, we hope to reduce the total number of servers in our data center from 100 to 50.”
With fewer physical servers to maintain, Alecta is enjoying a reduction in planned downtime. IT staffers are using System Center Virtual Machine Manager to move virtual machines from one physical server to another quickly and easily. The flexibility of moving workloads between physical servers with minimal disruption to their operation reduces disruptions to the business. “As far as business continuity goes, we are also looking at automating backups at the server level, not just the file level,” says Nilsson. “That way it’s much easier to recover from a failure.”
Nilsson is happy that the three or four staffers who spent part of every day on repetitive manual tasks including cabling, racking, wiring, adding memory, moving servers, and cleaning up drivers and disk enclosures are no longer wasting their time.
“We estimate that the time spent on provisioning servers has been reduced by 95 percent,” says Nilsson. “The actual installation plus deployment is now done in minutes instead of hours. Deprovisioning requires nothing more than stopping the server followed by a delete. Simple!
“As we progress with our consolidation plans, the savings will only increase,” he continues. “Now we can start to move away from wiring so we can work more on the applications that are most useful to the business.”
Simplified Virtual and Physical Asset Management
According to Nilsson, one of the most challenging aspects of managing a large data center is controlling its complexity. Using System Center Virtual Machine Manager, Alecta’s IT department is reducing the complexity of the data center’s virtual and physical environments.
“We are taking advantage of System Center Virtual Machine Manager to fully realize the potential of server consolidation that we get with Virtual Server 2005,” Nilsson adds. “The product simplifies management by giving us a consolidated overview of our infrastructure across production, test, and development environments. We are just beginning to look into using the intelligent placement features to maximize the utilization of our servers and we are looking forward to using the self-service provisioning capabilities.”
According to Mikael Nyström, the consultant at Truesec who worked closely with Alecta IT staff, Nilsson and his colleagues are correct in making management of their virtualized solution a top priority. “The need for management applications and end-to-end monitoring makes System Center Virtual Machine Manager a key piece of Alecta’s virtualization solution,” he says. “Many virtualization customers don’t really see that since you have added one layer, the importance of monitoring from the ground up becomes clear. Virtualization is an opportunity to work smarter and System Center Virtual Machine Manager helps customers do just that.”
When Alecta chose Microsoft virtualization technologies, it was as much to fulfill future plans as to answer immediate needs with a robust, cost-effective solution. The company’s overall strategy includes evaluating Microsoft application and presentation virtualization technologies.
“Microsoft offers a suite of virtualization technologies that complements our future plans, and we are looking forward to developing our partnership for the long term,” concludes Nilsson.
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.
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