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Going Green Saves Millions of Dollars for Nationwide
Nationwide is one of the largest insurance and financial services in the world. The company offers a full range of insurance products and financial services for home, car, and family. It has garnered over $161 billion in statutory assets.
With 36,000 employees managing 16 million policies, Nationwide requires a large data center to store and manipulate policy data. Actually, Nationwide has 20 data centers and a $250 million budget for its information system infrastructure. Nationwide’s primary data center in Columbus, Ohio, supports roughly 400 million transactions per month for activities such as calculating policy quotes; making policy additions, changes, and deletions; and processing claims.
Scott Miggo, vice president of Technology Solutions at Nationwide, manages the company’s data centers. Scott continuously monitors demand on the data center’s servers, power, and cooling. Scott has tracked a consistent 5 percent growth in data center processing from year to year. At this rate, he estimates that the data center demand will outstrip the power capacity of the company’s primary data center by 2013.
Scott had a number of options for developing systems to meet future demand. He might expand by building a new data center to add to the processing power of the current center. Many companies would choose to begin construction on a new data center, retiring the old equipment in favor of using the latest energy-efficient technologies. If Nationwide began construction immediately, they could have the new data center online by 2013. However, a new data center would cost Nationwide hundreds of millions of dollars. Scott tried to find a solution that might forestall the inevitable.
Scott and his team found several solutions that would buy them two or more years beyond 2013 without having to invest in major construction. First, they began using virtualization with VMware. VMware allowed one large mainframe server to act as 20 virtual servers. By implementing virtual servers, Scott reduced the numbers of servers in the data center from 5,000 to 3,500. The VM servers were running at 65 percent usage, up from 10 percent. In essence, virtualization allowed Nationwide to get more work out of each server—freeing up space and lowering power and air conditioning demands.
Secondly, Scott and his team began replacing the oldest, energy-intensive servers with green servers. The new energy efficient servers saved the data center $40,000 a year in electricity and cooling.
In another cost-saving effort, Scott and his team replaced tape silos with more modern, denser tapes and faster tape robots. The result was more efficient data storage and retrieval in a smaller amount of space. Although the savings from this upgrade were negligible compared to virtualization and server upgrades, every little bit helped. Scott says, “You’ve got to look at it holistically. We are looking at going to a massive array of idle disks that shut down and are brought up only when you need the data on a particular disk.”
The total upgrade of the main data center set Nationwide back $30 million. This is a small amount compared to the hundreds of millions they would have spent constructing a new data center. Space is no longer an issue at the data center. However, Nationwide eventually needs to build an additional data center. They don’t need the server space anymore, but the infrastructure of the building will no longer support the power and cooling needs of the growing number of servers—even the greenest, most energy efficient models. Nationwide plans to continue virtualizing servers and upgrading to more energy-efficient models in its 20 data centers based on the model that Scott Miggo created.
1. What issues did Nationwide face with their data centers? What considerations determined the data center’s processing capacity?
2. What three techniques did Scott Miggo implement to save Nationwide hundreds of millions of dollars?
1. Why was it good for Scott Miggo to anticipate the needs of data processing ten years in advance? What luxuries did it afford him, and how did it pay off for Nationwide?
2. What other green technologies might be used to further extend the usefulness of Nationwide’s primary data center and reduce the cost of operations?