BCBS Minnesota achieves a significant TCO reduction with virtualized Linux on IBM System z

Blue Cross and Blue Shield of Minnesota (BCBSM) is the largest health plan in the state, providing health coverage to more than 2 million members. With headquarters in Eagan, MN, and branch offices in Arrowhead and Rochester, BCBSM employs 3,800 people and operates as a not-for-profit, taxable organization: more than 90 percent of the premiums it receives are paid back out for health care claims.

To maintain this high ratio of payouts to premiums and provide the best possible value to its members, BCBSM puts continual downward pressure on its operational costs. In the IT department, this translates into a strategy of doing more with less—choosing the hardware and software that will drive business optimization while reducing acquisition, implementation, support and maintenance costs.

A new platform

“For several years, we had been running our IBM DB2® databases on the IBM System z® platform—but our applications servers, including those for SAP ERP, were running in a Microsoft® Windows® environment on Intel® processor-based hardware from HP,” explains Ted Mansk, Director of Infrastructure Engineering and Databases at BCBSM.

“Since Microsoft releases patches for Windows about once a month, we needed to invest a sizeable amount of time to keep the operating systems current. This caused downtime for the business as well. We decided to investigate some other options and see if we could find a cost-effective solution that would avoid these issues.”

BCBSM evaluated various UNIX® options, and also looked at Linux® on the IBM System z mainframe platform.

“We did our due diligence and spoke to a lot of other companies about how they constructed their application server landscapes,” comments Ted Mansk. “The feedback we received was that Linux on System z was one of the most stable platforms imaginable: none of the references had ever experienced a serious outage. Our own experience of running DB2 on z/OS® on the System z platform bears this out—you don’t have to worry about it, it just works.”

Finding the most cost-effective option

BCBSM then performed a five-year TCO study to see if Linux on the System z platform could deliver comparable price-performance to a distributed Windows or UNIX-based server landscape.

“Even without factoring in the maintenance and support costs—which would be considerable for a large estate of physical servers—we found that running a virtualized Linux environment on System z would be somewhere between 30 and 50 percent less expensive than a distributed architecture,” says Ted Mansk. “Suddenly, the choice of infrastructure had become an easy decision.”

Pulling out all the stops

Working with IBM, BCBSM migrated around 140 application servers from the HP hardware onto six new Integrated Facility for Linux (IFL) processors installed in its System z9® Enterprise Class mainframe. The IFLs have enabled the organization to decommission almost all of the old physical machines.

“We had to start the project after the annual financial close in December, and we needed to complete it within two months to avoid delaying a number of other strategic projects,” comments Ted Mansk. “IBM showed extraordinary dedication to help us complete the project within an extremely tight deadline. The project team worked seven-day weeks over the winter holiday season to get the job done.”

Advantages of virtualization

For BCBSM, running the application servers on virtual instances of SUSE Linux Enterprise Server in partitions on the IFL processors delivers several advantages.

First, the lead time for server provisioning has been reduced by more than 99 percent. When the business requires a new test or development environment, the IT team can deploy a new Linux virtual server within 20 minutes. There is no longer any need to source a new physical server, wait for delivery, then install and configure it—a process which could take six to eight weeks.

“Since the move to Linux on System z, we’ve received some really positive feedback from the business,” comments Ted Mansk. “Users really appreciate the fact that when they need something, we can now get to work on it at once, instead of having to wait weeks for new hardware to arrive. Equally, because the System z platform is so much more reliable than our previous infrastructure, we no longer get any complaints about performance and availability issues.”

Availability and disaster recovery

In fact, since the new infrastructure went into production, BCBSM has not experienced a single incidence of unplanned downtime or underperformance. Equally, the company’s disaster recovery capability has been improved dramatically by the new solution.

“With the old distributed architecture, we would have struggled to restore our application servers within 48 hours,” says Ted Mansk. “With all these servers running on System z, we can perform a full disaster recovery at our secondary data center within 90 minutes—an improvement of nearly 97 percent. In addition, the ease of maintenance also contributes to improving availability.”

With Linux on IBM System z, BCBSM can achieve near-continuous availability by reducing the need for planned downtime. It is possible to perform nearly all maintenance to the hardware, z/OS and DB2 while all systems are up and running—a feature unparalleled in the industry and a specific design goal of the platform.

Realizing the cost savings

Finally, BCBSM expects the new infrastructure to deliver cost savings over and above the predicted TCO savings in the initial cost-benefit analysis.

“When we performed the initial cost-benefit calculation, we did not factor in the maintenance and support costs, or the cost of power, cooling and server room space,” comments Ted Mansk. “The savings in these areas are likely to be considerable. For example, we only need 1.5 full-time employees to manage the entire System z Linux environment—which would be unthinkable if they were looking after 140 physical servers.”

“Equally, in terms of energy efficiency, the System z not only enables cost savings—it also helps us reduce our impact on the environment. We take a lot of pride in being good corporate citizens, so anything we can do to make the organization more sustainable is a major benefit.”

Looking to the future

In mid-2009, BCBSM migrated its database to DB2 version 9, and upgraded its hardware platform to z10™ Enterprise Class. The new, more powerful z10 quad-core processors should deliver a considerable improvement in performance, helping the organization handle its rising application and database workload without increasing hardware licensing costs.

“From every perspective, running applications under Linux on System z makes sense for our organization,” concludes Ted Mansk. “Performance, reliability, disaster recovery, server provisioning and cost efficiency have all seen dramatic improvements—helping BCBSM deliver better service and better value to its members across the state.”