Virtualization goes Nationwide

Nationwide Insurance and Financial Services, a $21 billion company with 30,000 employees, has turned to virtual servers running Linux to gain more control over computing power and expenditures.

Last year, Nationwide’s chief architect Guru Vasudeva tested Nationwide’s Unix and Windows servers and found that they were only using about 10% of the available CPU capacity. Multiple hundreds of servers meant high maintenance costs and lots of floor space that was being wasted. Adding to the problem was Vasudeva’s expectation that with Web site upgrades and growing internal business processes, he’d need another 400-500 servers by the end of 2006.

Vasudeva started looking for a way to cut costs and make more efficient use of the available CPUs. He discovered that virtualization could help Nationwide reduce the “server sprawl” it was experiencing, and also increase CPU efficiency while saving money.

Nationwide considered using Solaris on Sun hardware, but found that by using SUSE Linux to run the virtual servers, it could save even more money on licensing and hardware. But Vasudeva had to be sure they wouldn’t be taking on an inordinate amount of risk by using open source software.

“How do we take advantage of the open source movement?” Vasudeva says. “We felt that some of the tools coming out would benefit us. And increasingly, it would be impossible to avoid open source. But we wanted to see what we could do to manage the risk.” Vasudeva undertook studies to evaluate the possible legal, support, and technical risks of using Linux. “When we compared the economical benefit to the risk, we said we should go ahead and use Linux,” he says. “[It’s] an easy one because most of the legal and support risks are taken out of the picture.”

With the new system, Vasudeva put 400 CPUs on two IBM System z900 servers, a consolidation that is projected to save Nationwide about $15 million over the next three years. And instead of buying hundreds of new servers to handle anticipated growth, Vasudeva is simply virtualizing them, with a plan to continue the process as older physical servers are due for replacement.

With several mission-critical financial applications that only run on Windows, Vasudeva isn’t going completely open source anytime soon. “We need to figure out how to contain that server space,” he says, “so we’ve looked at VMware as a way to virtualize [them].”

Vasudeva advises other IT managers to look closely at risks before adopting open source software. “Define and establish a risk management framework,” he says. “Establish an initial proof-of-concept that demonstrates mission-critical applications can run on this technology, and then start moving them. Don’t buy into the myth that Unix admins cannot be easily trained to become Linux admins. We have found it takes hardly any time.”