Is Insurers' Resistance to Virtualization Fading?
Insurance Networking News, January 1, 2009
Far from being passe, virtualization is still a vital concern among IT professionals these days. While there are many instances of carriers that have virtualized everything from their desktops to their servers to their entire office staff, there are just as many insurers, if not more, still holding back on some level. And while their reasons for abstaining are no doubt legitimate, maybe carriers should reassess whether the risk/reward ratio has changed.
There are a number of different ways virtualization is currently being employed in the insurance industry, with server virtualization probably the biggest technology trend of the last few years, according to Andrew Reichman, senior analyst with Forrester Research Inc., Cambridge, Mass. Server sprawl, he believes, is a major issue for most insurers, with each department and application team deploying new services and, generally, doing it with physical servers. As a result, there's little ability to keep track of all the servers, with many having low-utilization of CPU, cache or disk space that might be on board. Additionally, the mix is difficult to manage, inefficient and costly, says Reichman.
Andrew Reichman
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"Server virtualization allows you to have a big server that can be partitioned into many virtual servers," he explains. "When a team deploys a new service or new application, they'll typically just create a single partition, and put that out there rather than buying a new physical server and configuring and running it. What virtualization gives you is faster time to provision, so you don't need to wait for shipping or physical implementation (racking, stacking, plugging it in, etc.). You have a physical machine that's there ready to go, and you just create a space on it."
Typically, between 10 and 40 physical servers can be converted to virtual images within one large physical server, Reichman says. Doing this allows you to use more of the CPU, cache, IO and disk resources on the virtualized server, as well as realize major power savings.
"It's generally more efficient to do each of those images on a single physical server," he continues, "as you're sharing power supplies across each of the images. Before, every small server would have two power supplies and would draw a good amount of power. So with virtualization, you're using far less power."
One insurer capitalizing on these benefits is Nationwide Services Co., Columbus, Ohio, which began its virtualization push in 2004. With more than 5,000 servers running with 10% or lower utilization, there was an easy business case to be made to virtualize the seemingly endless stacks.
Scott Miggo, VP, technology engineering for Nationwide, says the company started with two types of virtualization - working with Xilinx Inc., San Jose, Calif., solutions on the mainframes, and Palo Alto, Calif.-based VMware Inc. on the Intel-based servers.
Leveraging VMware, Miggo's goal was to eliminate from 500 to 700 servers each year for the next three years. So far, his team has pared the data center down to about 3,500 physical servers, including about 100 that are running around 1,000 virtual servers. They plan to eliminate another 800 physical servers in the next year, and add about 40 virtual servers to handle the additional workload.
Scott Miggo
"As a result of our efforts, we've freed up a ton of space in our data center, and are seeing a great reduction in power consumption," Miggo says. "We have a large data center that was running near maximum capacity on power, and there wasn't really space to put in any more back-end power systems. While we're still looking at potentially having to build another data center in the future, we've been able to delay that. When we initially thought we were going to run out of power by 2012, it's now going to be closer to 2014 or 2015 before that happens."
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