Quelle: CIO, Asia
For Hong Kong-based ISP PCCW Ltd, there is no better way to staunch the flow of total cost of ownership dollars from an IT budget than through standardisation. A standardised environment costs less to install and maintain than a heterogeneous one. According to Chan Wing Wa, managing director of PCCW's technical services subsidiary Cascade Ltd, the ISP has derived huge benefits from a ruthless standardisation project. "We foresaw the rapid growth of our Netvigator.com business - our current growth rate is 20 percent - and we wanted to embark on a server consolidation strategy that standardises platforms to lower total cost of ownership," he says. PCCW needed a more reliable and scalable platform to support its business strategy of developing its value-added services, which includes Netpass (that provides single sign-on), NetAlbum (video streaming and photo sharing) and NetBanner(portal personalisation), in addition to existing ISP services.
PCCW incurred annual maintenance costs of hundreds of thousands of U.S. dollars for its more than 300 Sun servers, which include lower-end models (e.g. Workgroup Ultra Enterprise 2 and Enterprise450/420), midrange machines (e.g. Enterprise 3000/6500) and higher-end ones (E10k). These were acquired over a period of five years since PCCW began operations in 1998.
Last year, the ISP made a bold decision to consolidate its 300 servers comprising about 10 Sun models that run five versions of Sun's operating systems, into just 20 machines of two models - Sun Fire 6800and V880 - that run one operating system, Solaris 8.
The project has paid dividends. With standardisation of hardware and software, PCCW has reaped savings of 35 percent in floor space - which in Hong Kong can translate to a substantial reduction in rental fees - and 15 percent in manpower costs.
Thanks to standardised hardware and software configurations, systems are also more reliable. For instance, the mean time between failure of the new platform (Sun Fire 6800) is 45,000 hours, an improvement over the 25,000 hours of the old platform. The time taken to deploy new applications has also decreased by five times. "If deploying an application took us five days in the past, it will take us only one day today," says Louie Man Tat, senior vice president, Network Development, Cascade Ltd. "It also facilitates us in another way: In designing and deploying new applications for our 500 key customers, we don't have to consider how to port these applications to five different types of operating systems and hardware to maintain our services seamlessly. This gives us greater flexibility and efficiency."
Buy or lease?
PCCW evaluated three options: maintaining its status quo, pumping in capital expenditure to replace its old platform, or work with Sun Microsystems Finance on a "Maintenance to Lease" financial solution that enabled it to utilise its existing maintenance budget for the server consolidation project (including hardware, professional services and support services). "We evaluated the three options and found the leasing option to be most cost-effective," says Louie.
Sun Microsystems also put in place a technology refresh option starting from the eighth quarter, providing PCCW the option to swap the equipment for the latest Sun technology and enter into another lease. This, says Adrian Pang, Sun Microsystems Finance Asia Pacific managing director, ensures clients like PCCW have the flexibility to scale their infrastructure needs as their business grows. In addition, the deal for PCCW also caters for asset disposal with end-of-lease options to migrate to new Sun equipment with a new lease, return the equipment without further obligation, or purchase the equipment at the then-prevailing market value.
As for the possibility of being locked into a cycle, Louie says this is not a downside. "We believe that our other options do not prevent us from being locked in to a vendor for four years. The truth is, our ISP business is not going to vanish in four years, and we need to have a platform to run our services."
Banking on flexibility
Pulling the plug on its legacy platform - and banking on new technologies to lower total cost of ownership - is also the logic pursued by the Bank of New York Company, Inc., a commercial bank founded in 1784 but has since transformed itself to a premier global securities service provider by focusing on high-growth, fee-based business.
Alan Goldstein, senior vice president, Messaging Software Division, Bank of New York, says that the bank leverages technology to more effectively meet client needs and improve productivity while developing new products. IT investment increased from US$308 million in 1997 to US$655 million in 2002. Of course, it also keeps an eye out for new technologies that can give it a competitive edge and reduce the cost of delivering services. "We understand that to keep pace with the change in the banking world, our IT infrastructure must provide a high degree of flexibility and reliability at the lowest possible cost," says Goldstein.
With the goal of increasing performance and flexibility at a significantly lower cost in mind, the Bank teamed up with BEA Systems Inc., Intel Corp., Microsoft Corp. and Hewlett-Packard Company to examine the cost-effectiveness of migrating a core mission-critical application, INFORM, an online information-delivery and transaction-processing system for the institutional investment community built on BEA WebLogic, from a RISC environment to a BEA, Intel, HP and Microsoft platform.
Goldstein explains the shift to the new platform: "The old IT infrastructure focused on the IT environment itself - keeping hardware and operating systems up, stable and running. The new IT model builds up on that, as well as on the fact that businesses are now defined by the effect they have on, and the value they add to, their customers. IT has to be tied to the business so that it can anticipate and adapt to changing business requirements dynamically - while reducing costs."
Goldstein adds that the RISC environment was also high-cost in terms of the actual cost of hardware and ongoing maintenance, layered software, and the implications for availability and upgrades. "Due to the high cost of the servers, applications are typically deployed over only two boxes. We need more flexible solutions to adapt to new business needs," he says.
Right On
Confirmation came with the results of porting the INFORM application from the RISC-based architecture to an Intel-based architecture. Goldstein says the latter offered improved price-performance metrics over the former. "Test results indicate that Intel provided a 78percent performance over the RISC architecture. While the RISC architecture was able to complete 21,253 total script iterations in 10minutes, Intel was able to complete 37,798. We also completed the price-performance evaluation. All things being equal, the BEA/Intel/HP solution demonstrated 70 percent higher transaction throughput, 50percent better response times and higher CPU utilisation," he adds. While offering better throughput and response, the Intel-based solution also offers significant cost savings of 46 percent over the RISC architecture, he says. The new platform used six HP ProliantDL580 G2 4-way servers with Intel Xeon processors MP, BEA WebLogic Server 7.0 as the application server upon which the test application was deployed, BEA JRockit as the Java Virtual Machine for the Intel-based system and Microsoft Windows 2000 Advanced Server as the operating system.