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Virtualization ROI: How One SMB Saved $814,000

Baldwin-Wallace College CIO finds benefits beyond dollars-and-cents, shares advice for IT leaders at other small and midsize businesses.

Baldwin-Wallace College's IT infrastructure--which supports some 600 full-time employees, not to mention 4,300 students--is almost entirely virtualized. But that's the snowball effect of a series of successful, piecemeal deployments rather than the original plan.

In fact, CIO Greg Flanik said the transformation that began two years ago as a whiteboard exercise was strictly a server virtualization project, driven in part by the school's growing data--around 12 TB and counting--and inefficient storage. Some of the school's 65 systems (at the time) were overloaded; others were underutilized resources. A key challenge for Flanik and his team is supporting the many disparate systems, applications, and user groups inherent in a university setting.

"When you're CIO of a college, it's almost like a small town," Flanik said in an interview. "We have foodservice, a bookstore, campus security, finance, facilities--and all that stuff is running over the network and utilizing a virtual server of some sort to get business done. The data is explosive." And that's just a short list of examples--he didn't even mention all those students.

The virtual server deployment, using VMware as the backbone, was quickly a success. Using NetApp, the project freed up some 3.5 TB of storage space via consolidation and deduplication. The light bulbs started going off for Flanik and his 29-person IT team.

[They recognize virtualization's benefits, but SMBs are moving slower on virtualization. Find out why.]

"We said virtualization is starting to work for us, let's up the ante," Flanik said. That meant moving the school's tier-one applications--email, learning management systems, databases, Web servers--into a virtual environment. With three people dedicated to the project full time and support from VMware and NetApp, the initial process was done in just a month. "It was so easy, some of my systems guys were saying we could just take one system at a time, schedule the downtime, and move it over," Flanik said. So that's exactly what they did over the next several months.

Fast forward to today: Baldwin-Wallace is 92% virtualized, and Flanik estimates virtualization and related efforts will net the school $814,000 in savings over three years. That comes from reduced electricity consumption and cooling costs, more efficient storage, and other areas. They've shrunk the physical space needed for the data center by 40%, and application availability is running at 99.95%, according to Flanik.

But the return on investment goes beyond dollars and cents. For one, Flanik said the change enabled him to simultaneously put a much better disaster recovery plan in place--he now believes Baldwin-Wallace's critical applications will remain available--or be back online quickly—in all but the most severe of disasters. The transition has also delivered a big boost to IT morale, thanks to the ability to do maintenance and upgrades during normal business hours.

"Staff morale definitely improved because I don't have to have these guys do late-night maintenance windows, which they had to do in the physical environment," Flanik said.

Though an overall success story, Flanik said his organizations path to virtualization hasn't been without a few speed bumps. Here are some key lessons the CIO has learned along the way that he'd pass along to fellow IT leaders at small and midsize businesses (SMBs).

-- Just because you can virtualize it doesn't mean you should. "Make sure the application you're going to virtualize is supported," Flanik said, adding that Baldwin-Wallace "forced the issue" with its campus transactions application even though the vendor, Micros, said it couldn't support a VMware environment. The college moved forward anyway, and while things ran smoothly for the first year, there was a "hiccup" around six weeks back that has caused some headaches. Ultimately, Micros has tried to help resolve the issue--Flanik suspects the vendor is starting to get more virtualization requests from much larger customers in the foodservice, entertainment, and retail industries. Nonetheless, if you go it alone in an unsupported environment, know the risks up front.

--Know what you want to virtualize and why. The speed with which Baldwin-Wallace shifted from physical to virtual environments caused occasional disk alignment, performance, and other issues, Flanik said. A clear, thoughtful plan--even if that requires slowing down a bit at the outset--can prevent problems along the way. Ultimately, this advice comes down to not simply following a trend but having a good business reason for making a change.

--Talk to your CFO. "[Virtualization] changes the balance sheet a little bit in your IT organization," Flanik said. "It's worth having that conversation with the chief financial officer." If finance was depreciating physical servers each year and IT suddenly stops buying and maintaining that hardware, there's an obvious accounting impact. The concept of virtualization might require some explanation.

"[The CFO] says, 'Well, you guys added 20 servers, how do I depreciate that?' Well, they're virtual machines. We didn't buy anything physical, so you're not going to depreciate it like you would traditionally," Flanik said.

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