Virtualisation nets million-dollar savings for tax firm

H&R Block now finds hardware costs less taxing since it rolled out the technology last year.

Deploying virtualisation software from EMC subsidiary VMware has saved H&R Block, a global tax planning services provider, an estimated US$1 million (NZ$1.6 million) on hardware purchases.

The savings have been realised since the company rolled out the technology last year, says Ron Rosenkoetter, senior systems engineer at the firm.

“When I came on board, H&R Block had heard about virtualisation and was looking to do server consolidation because, like a lot of companies, they had big server sprawl. About six years ago they only had 80 servers and now they’re up to 600 or 700 servers, so they were adding a hundred servers every year,” Rosenkoetter says. With servers dedicated to single applications, many of the machines were under-utilised, he says.

Two years ago, the firm started testing VMware’s ESX Server virtualisation software as a way to consolidate servers. After a successful test during last year’s US tax season, the company deployed the software in June.

“After the tax season, in June, we found a couple of apps on 27 old physical servers that needed to be upgraded anyway — they were six years old,” Rosenkoetter says.

H&R Block now has about 25% of its datacentre virtualised and has completely virtualised its in-house timesheet application, which gets heavily used during the tax season, when seasonal employees come on board and the company’s ranks swell to 100,000.

The tax specialist is looking to expand its virtualised environment even further, but won’t extend it to all components of its IT infrastructure — its larger databases and Exchange servers won’t be virutalised, for example.

“At this time I don’t see a need for it. Email servers need a lot of power and they use it. If email is using about 60-70%, then I’m OK to just leave it on a physical machine,” Rosenkoetter says.

One area where Rosenkoetter sees room for improvement is in VMware’s monitoring capabilities.

Although VMware issues alerts to IT if there are dramatic spikes in CPU or memory usage, Rosenkoetter would like to have a more holistic awareness of how machines are performing over time.

“I don’t care if a machine hits 99% for a minute. I’d rather have it take a sample over time, because machines do jump up every once in a while,” he says.

Market research firm IDC estimates that spending around server virtualisation will increase to nearly US$15 billion worldwide by 2009. Many organisations are now starting to explore how to extend the use of virtualisation beyond servers.

VMware, which has dominated the virtualisation software market for several years, now faces new competition from products based on the open-source Xen hypervisor project and from Microsoft, which recently said it would provide its Virtual Server 2005 R2 as a free download. The move followed VMware’s announcement in February that it will offer its VMware Server for free.

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