Case Study – Information System Infrastructure

Summary:

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Please use the attached case study. Students will answer the “Discussion Points” at the end of the case study.

Note that the requirement here is to write a 2 – 3 (750 – 1000 words) page paper. Be sure to include at least two reference sources. APA rules for formatting, quoting, paraphrasing, citing, and listing of sources are to be followed.

Case 07 Data Center Consolidation at Guardian Life

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  • CASE STUDY 7
  • DATA CENTER CONSOLIDATION AT GUARDIAN
    LIFE

    As one of the largest mutual life insurance firms in the United States,

    Guardian Life (www.guardianlife.com) has more than 5000 employees and

    over 3000 financial representatives in 80 agencies. Guardian and its

    subsidiaries provide almost three million people with life and disability

    income insurance, retirement services, and investment products such as

    mutual funds, securities, variable life insurance, and variable annuities. The

    company also supplies employee benefits programs to six million

    participants, including life, health, and dental insurance, as well as qualified

    pension plans. In addition to regional home offices in New York City;

    Bethlehem, Pennsylvania; Spokane, Washington; and Appleton, Wisconsin,

    the company has 55 remote sales offices and 80 remote agency offices.

    Like other insurance companies, Guardian Life is an information

    intensive organization where data processing and communications network

    infrastructure have consistently been important contributors to its success.

    Guardian Life’s IT organization has earned numerous accolades including

    multiple CIO100 awards from CIO magazine [PRNE11]. According to Dennis

    Callahan, Executive Vice President and Chief Information Officer for,

    Guardian Life, “A strong partnership between IT and the businesses enables

    http://www.guardianlife.com/

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    Guardian to deliver cost-effective technology services that facilitate world-

    class customer service, product innovation, and operational efficiency.”

    Ensuring alignment between business and IT is important to Guardian Life

    and provides a consistent theme for many of the insurance companies IT

    projects including its data center consolidation initiatives [CIOZ12].

    Data center consolidation has been an ongoing concern at Guardian for

    more than a decade. Guardian’s IT governance structure is team-oriented

    and the company’s data center consolidation initiatives are overseen by it

    Infrastructure team. The Infrastructure team is primarily co-located in New

    York, and Bethlehem, Pennsylvania but it has key support teams in Spokane,

    Washington, Appleton, Wisconsin, and Pittsfield, Massachusetts.

    Guardian Life began taking a serious look at data center consolidation in

    2000, but in the aftermath of the September 11, 2001 terrorist attack,

    Guardian also became more concerned with business continuity issues.

    Guardian had four significant data centers, at its four home offices, but the

    primary data center was in New York City. After 9/11, Guardian wanted

    make infrastructure changes to ensure business continuity across its existing

    data centers and made plans to add two more data centers to the mix.

    Guardian performed an assessment of its data centers to provide a basis

    for planning on the location of data processing resources. One surprising

    outcome of this assessment had to do with utilization. The assessment

    revealed that the four data centers had about 1000 UNIX and NT servers,

    with an average capacity utilization of 10%. Even at peak demand, only 25%

    of the processing power of the servers was being used [MUSI02]. Guardian

    responded to this assessment with a plan that included the following

    objectives:

    1. Move the primary data center from New York City to Bethlehem,
    Pennsylvania.

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    2. Improve the efficiency of its data centers, including server and storage
    utilization. Specifically, Guardian set a goal of reducing the number of
    servers supporting Guardian’s applications and databases by 40% and
    reducing the server support staff by 60%.

    3. Ensure a smooth transition to the new primary data center.

    The company chose IT consulting firm Greenwich Technology Partners

    (GTP) to help it design and carry out the transition. GTP began with an

    assessment of the company’s IT environment and looked at the impact of

    moving the data center from New York to Bethlehem. A major issue related

    to the move was that the largest number of data center users was located in

    the New York area. Thus, the new deployment needed to provide sufficient

    data transmission capacity to meet these users’ needs. Fortunately, the

    network infrastructure already in place was fairly standard and easily

    scalable (Figure C7.1).

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    An ATM WAN backbone linked the four regional home offices. Frame

    relay connections linked the remote sales offices and remote agency offices,

    and 100-Mbps and 1-Gbps Ethernet LANs provided connectivity within

    campuses. The Cisco Catalyst 5500 and 7200 series routers provided

    Ethernet support combined with a modular, easily scalable design. The Cisco

    IGX 8400 ATM switches could be scaled to support an ATM network service

    at any desired capacity. With three widely used networking technologies in

    place, some of the problems that might have been encountered in a more

    convoluted networking environment were avoided.

    GTP also looked at the application and database patterns. They

    determined that in addition to traditional applications such as file and print

    services, PeopleSoft, and Lotus Notes, Guardian also used a collection of

    applications to support its intranet. Then, as now, the site included

    marketing materials and sales tools for the firm’s agents, account profiling,

    and customer data. The company had also invested in a number of financial

    services applications, including applications for supporting its trading and

    securities functions. Due to their complexity and the amount of resource

    required to support them, many of Guardian’s applications have historically

    been supported by dedicated servers.

    The transition team, consisting of Guardian and GTP personnel, did

    extensive validation work and benchmarking to make sure the data they had

    gathered during the initial assessment were accurate. They measured

    network utilization at granular levels and modeled various consolidation

    scenarios for reducing server hardware.

    From this analysis, GTP proceeded to develop a plan for consolidating

    the servers, looking at both business and technology issues. For example,

    the team considered the criticality of the applications supported by the

    servers, as well as which business units they belonged to. Some servers

    were good candidates for consolidation; others were not; and others were

    out of warranty, which made them too expensive to keep. After the

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    migration plan was devised and the new architecture developed, more

    testing was conducted to ensure their viability.

    The team devoted much thought and analysis to the migration to the

    new architecture, so as not to disrupt day-to-day operations. The plan

    targeted the least complex opportunities first, starting with file and print

    services. Guardian initially had more than 30 servers providing file and print

    services. These were consolidated into just two servers clustered in a high-

    availability, fault-tolerant configuration. For more complex parts of the plan,

    the team opted to do some of the consolidation in New York, and only then

    move the servers to Bethlehem after the consolidation had settled down.

    The initial consolidation and relocation project yielded tangible benefits

    to Guardian in terms of reduced hardware and personnel requirements. But

    the benefits extended well beyond these initial objectives. The mindset of

    solving new problems efficiently and in the context of the existing

    infrastructure had taken hold. Guardian no longer automatically takes orders

    for new servers to support applications as it did throughout the 1990s.

    Instead, Guardian analyzes each new application requirement and attempts

    to support it with the existing hardware/software suite or with minimal

    upgrades and extensions.

    The total cost of the data centered consolidation project was $4.5

    million, but the company saved more than $3 million in 2002, offsetting

    much of that cost. Even greater savings were realized during each of the

    following two years.

    Further Consolidation
    In 2010, Guardian embarked on a second major data centered consolidation

    initiative. The maturation of virtualization technologies and evolution of high-

    bandwidth WAN connections encouraged Guardian to consolidate six data

    centers into two [MITC11]. This is illustrated in Figure C7.2. Guardian will

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    consolidate its mission critical data processing infrastructure into one

    primary data center that it will own. The company plans to lease a second

    modular pod for use as its second data center. Pod data centers can be

    thought of as data centers in a box. These can be configured by vendors to

    customer specifications and delivered as a container that looks similar to

    refrigerated box car or multi-modal shipping container stacked on ships or

    carried by tractor trailer trucks. Pods are energy efficient but can be a

    cramped for human movement.

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    In addition to moving to a much leaner data center infrastructure,

    Guardian is migrating from Unix to Linux. It has also started to move some

    of its applications to the cloud [MITC11]. By the beginning of 2012, Guardian

    had moved 18 back-end applications to SaaS and had begun transitioning e-

    mail, HRIS, and IT services into the cloud. The breadth of Guardian’s move

    to the cloud put the company on the leading edge among Fortune 250

    organizations [MITC12].

    Guardian is using the IDEAS Advantage services from Ideas

    International to help it make decisions about remodeling its data center

    infrastructure [GOLI11]. These sophisticated tools in combination with

    Guardian’s commitment to cloud services indicate that the insurance

    company’s data center consolidation initiatives are far from over. Guardian

    has not yet moved its core ERP systems to the cloud, but even this is under

    consideration.

    Discussion Points
    1. Do some Internet research on the reasons why businesses generally

    invest in data center consolidation projects. What benefits do they
    commonly hope to realize? How do Guardian’s rationale for
    consolidating data centers compare to those of other businesses?

    2. Getting outside consultants to manage data center consolidation

    projects is a common practice. Discuss the pros and cons of using
    consultants to manage data center consolidation projects?

    3. How/why has virtualization fueled business interest in data center

    consolidation?

    4. Why is the availability of high-speed, high bandwidth communications
    an important consideration in data center consolidation plans and
    decision-making?

    5. Do some Internet research on modular (pod) data centers. Summarize

    the advantages of disadvantages of modular data centers.

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    6. Guardian is consolidating from six to two data centers supplemented
    with SaaS cloud services. As the company continues to move
    applications to the cloud, could it consolidate to zero data centers?
    Why or why not?

    7. Do you think that winning multiple CIO 100 awards has encouraged

    Guardian’s IT executives to recommend risky IT projects? Why or why
    not?

    Sources
    [CIOZ12] CIO Zone.”Guardian CIO on Aligning IT, Business.” Retrieved
    online at: http://www.ciozone.com/index.php/Management/Guardian-CIO-
    On-Aligning-IT-Business.html.

    [GOLI11] Golia, N. “Guardian Life Using Analytics to Assist Data Center
    Planning. Insurance Technology, September 1, 2011. Retrieved online at:
    http://www.insurancetech.com/architecture-infrastructure/231600651

    [MITC11] Mitchell, R. “Cloud to Lower Bar, Intensify Competition.”
    Computerworld, March 7, 2011. Retrieved online at:
    http://blogs.computerworld.com/17935/cloud_to_lower_bar_intensify_comp
    etition

    [MITC11] Mitchell, R. “Best Practices for Scaling up SaaS to the Cloud.
    Techworld, February 14, 2012. Retrieved online at:
    http://features.techworld.com/sme/3337405/best-practices-for-scaling-up-
    saas-in-the-cloud/

    [MUSI02] Musich, P. “Project Gets Helping Hand.” eWeek, November 25,
    2002. www.eweek.com.

    [PRNE11] PR Newswire. “Guardian Life Recognized by CIO Magazine for
    Third Consecutive Year in CIO 100 Awards.” Retrieved online at:
    http://www.prnewswire.com/news-releases/guardian-life-recognized-by-cio-
    magazine-for-third-consecutive-year-in-cio-100-awards-54985272.html

    http://www.ciozone.com/index.php/Management/Guardian-CIO-On-Aligning-IT-Business.html

    http://www.ciozone.com/index.php/Management/Guardian-CIO-On-Aligning-IT-Business.html

    http://www.insurancetech.com/architecture-infrastructure/231600651

    http://blogs.computerworld.com/17935/cloud_to_lower_bar_intensify_competition

    http://blogs.computerworld.com/17935/cloud_to_lower_bar_intensify_competition

    http://features.techworld.com/sme/3337405/best-practices-for-scaling-up-saas-in-the-cloud/

    http://features.techworld.com/sme/3337405/best-practices-for-scaling-up-saas-in-the-cloud/

    http://www.prnewswire.com/news-releases/guardian-life-recognized-by-cio-magazine-for-third-consecutive-year-in-cio-100-awards-54985272.html

    http://www.prnewswire.com/news-releases/guardian-life-recognized-by-cio-magazine-for-third-consecutive-year-in-cio-100-awards-54985272.html

      CASE STUDY 7
      Further Consolidation
      Discussion Points
      Sources

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