Refurbishing Old Data Center Provides Big Savings

By Doug Bartholomew  |  Posted 09-11-2007

Refurbishing Old Data Center Provides Big Savings

Nationwide, a diversified financial services and insurance firm with 20 data centers and a $250 million budget for IT infrastructure, figured it would outrun the power capacity of its primary data center in Columbus, Ohio, by 2013.

Instead of building a new data center, Nationwide took a different tack. By reducing data center floor space needs and reducing power usage, the insurance giant has been able to extend the life of its main data center by at least two years.

That's no small accomplishment for an IT organization that projects 5 percent growth in processing year-to-year for the foreseeable future. Each month the company processes about 400 million transactions for such things as calculating policy quotes; making policy additions, changes and deletions; and processing claims for auto, property, boat, recreational vehicle, home, life and other policies.

"The cost to the organization of building another data center is in the hundreds of millions of dollars," says Scott Miggo, vice president of Technology Solutions at Nationwide Services Co., the company's shared services unit. By finding ways to extend the life of its main data center and postponing a huge capital outlay, Miggo, who is responsible for all IT infrastructure including data storage, servers, desktops and mainframes, is helping the company save money today.

Nationwide was able to forestall construction of a new data center by investing in a $30 million upgrade of its existing center in Columbus to a Tier 4 facility-- the most redundant and highly available as defined by the Uptime Institute, a consortium of companies concerned about infrastructure availability. The rating applies to the physical infrastructure of the building, including the ability of its power, cooling and other equipment to withstand natural disasters.

The data center was a Tier 3 before the upgrade, which was aimed largely at improving power and cooling redundancy.

Prior to the recent modifications, for every square foot of raised-floor computer space there was an equal amount of square footage dedicated to mechanical infrastructure for power, cooling and backup equipment. "We now have nearly 3-to-1 mechanical to raised floor," Miggo says.

A key piece of the upgrade was a boost of the facility's power capacity. "Three years ago, we calculated that we would not have enough power by 2013," he says. "And we had already started to run out of space."

The data center upgrade wasn't aimed at saving money; it was an effort to improve the company's risk posture and reduce the chance of system downtime by building in extra protection. An important piece of Nation- wide's solution to the space and power problem was a sweeping server virtualization program begun two years ago. The company uses software from VMware that allows numerous applications and operating systems to run simultaneously on one server.

"We've had a reduction of 80 percent of our floor space," Miggo says, offering an example of how virtualization provides leverage in processing. "By virtualizing an older, larger server, we've been able to get 20 virtual servers on that one, eliminating 19 physical boxes. This reduces our hardware and operating system costs."

The reduction in floor space is partially offset by a growth in mainframe, storage and network systems.

Although space is no longer an issue, according to Miggo, ultimately Nationwide will need a new facility because the present building's infrastructure can no longer be expanded to supply enough power and cooling.

"We will have enough physical space to add more systems in for a long time," Miggo says. "But we will not have the physical building infrastructure to supply enough power and cooling to the building." That's because the building cannot be upgraded further to handle the additional power and cooling without major investment, which has led Miggo and his team to consider building a secondary data center as an alternative.

Apart from the partitioning benefits of virtualization, Miggo found that replacing old, energy-intensive servers with new servers resulted in reduced energy costs, in addition to saving space. "The new technologies are a lot greene r than the old ones," he says. By replacing older Sun Micro- systems machines with the newer, energy-efficient Niagara models, the company saves $40,000 a year on these machines alone.

In another space-saving move, Nationwide swapped the existing storage tape silos with denser tape and faster tape robots. While data storage isn't typically the first thing on every CIO's mind when it comes to cutting space costs, Miggo figures that every little bit of hardware or software that can be modernized or improved upon helps.

"You've got to look at it holistically," he says. "We are looking at going to a massive array of idle disks that shut down and are brought up only when you need the data on a particular disk."

The biggest impact came from the CIO's campaign to implement virtual servers. Since embarking on a massive virtualization effort, Nationwide has reduced the number of servers to 3,500 from 5,000. One physical virtual server runs multiple virtual instances, each of which previously would have been a single physical server. The result is that average server usage has gone way up, to 65 percent from below 10 percent. "From an IT management standpoint, you do not want a bunch of small servers running at 10 percent utilization," Miggo says. "As a result, we are spending a lot more time on capacity planning."

Despite boosting server usage so much, though, the amount of heat expended by the chips in each machine is virtually unmeasurable. Nor does Miggo expect server usage to ever reach 100 percent, citing the inevitable spikes in loads.

Looking Ahead

Looking Ahead

On the virtualization front, Miggo is not done. His goal is to virtualize about 10 percent to 15 percent of the company's total server environment every year.

Another area where he is considering applying virtualization is the desktop. But that may pose a special challenge. "A successful implementation of virtualization on the server side, handled by the data center, is not a guarantee of success on the desktop side," says Theresa Lanowitz, analyst and founder of the research firm Voke.

Management support, a capable implementation team and clear communication about the need for desktop virtualization are essential, she says.

Nationwide's changes to the Columbus data center included a previously planned upgrade of the power backup systems. All of Nationwide's commercial power feeds through its battery and uninterruptible power source system. If there is a power failure, the backup battery starts the generators in seconds. "It's tested every week, and we have backups to the backup generators," says Miggo.

Now, that's planning ahead.

Nationwide at a Glance

Headquarters:
1 Nationwide Plaza,
Columbus, OH 43215

Phone:
(614) 249-7111

URL:
http://www.nationwide.com

Business:
Provides auto, homeowner, property and casualty insurance, as well as diversified financial services including annuities and asset management

VP, Technology Solutions, Nationwide Services Co.:
Scott Miggo

Financials in 2006:
$22.3 billion revenue; $2.1 billion profit

Challenge:
Reduce power and processing space needs sufficiently to postpone $150 million-plus investment in new data center