Shelter Mutual Insurance Company slashes costs and complexity

Shelter Mutual Insurance Company (Shelter) is headquartered in Columbia, Missouri and employs approximately 3,700 people across 14 U.S. states. As a multiline insurance provider, Shelter sells over 20 different lines of insurance, and also operates reinsurance services in 60 countries worldwide.

Shelter runs a very information-intensive business and relies heavily on IT to manage the vast amounts of information it collects on its insurance lines, claims and policy holders. In the last ten years, the company’s IT resources have more than tripled as it has undergone business growth and added new, more complex applications.

Bridging the gap
Shelter’s existing hardware infrastructure included a large number of x86-based servers running Microsoft Windows, on which the company deployed the majority of its applications. It has also relied on IBM System z® server technology for decades. As the company expanded its operations, it began to notice a growing gap between its different applications and hardware platforms.

Yvette Gonzales, Vice President of Information Services, explains: “We had developed some tactical frontline applications running on x86 servers, but these were not integrating seamlessly with our core applications on the IBM System z server. We wanted to find a way to bridge the gap so that we could provide more agile and strategic solutions for the business.”

Additionally, Shelter wanted to reduce the growing complexity and cost of its application and server environments.

“When you look at running a relatively small application, such as our Shelter Search program, on an x86 infrastructure, the costs add up very quickly,” says Mike Giglio, System Programmer. “The application had multiple servers for redundancy and for different environments, each with multiple cores. The more cores you have, the more money you pay, as software is licensed on a per-core basis. This meant that the cost of running just one, simple application could potentially explode.”

Extending investment in IBM technology
Faced with these challenges, Shelter drew up a strategy for containing its IT budget, aiming to keep IT costs within a target range of three to four percent of annual revenue. As part of this strategy, it focused on new ways to maximize resource efficiency through consolidation and virtualization.

Shelter decided to implement an IBM zEnterprise 114 (z114), replacing its existing IBM System z10® Business Class model. It is using IBM z/VM virtualization technology to consolidate its Linux workloads, and has activated two Integrated Facility for Linux (IFL) processors on the IBM z114. All of the IFLs run SUSE Linux Enterprise Server for System z.

Taking advantage of virtualization
Shelter teamed up with IBM Premier Business Partner Sirius Computer Solutions to build its Linux on System z environment. As Mike Giglio states, “We worked with Sirius to help us understand more about the technology. It was incredibly useful to have someone there to answer our questions and recommend best practices for the implementation.”

The IT team began by moving a copy of the company’s largest agent-facing application—a custom-built internal phone directory—from Windows to Linux on the central System z server. Giglio explains, “Our thought was if we can move our largest, most complex, most resource-intensive application over to this environment, then we should be able to move anything. This test case was a success, so our next step was to put together a virtual environment for our major e-commerce application on Linux on System z. No matter what we threw at it, the environment never failed.”

Motivated by this successful prototype stage, Shelter then decided to migrate its first production application, the Shelter Search application. It was able to create virtual development and production environments for the application on Linux on System z in roughly five minutes. This is a considerable improvement on the days or even weeks that it previously took the company to deploy a new physical server.

Shelter now has plans to progressively migrate more applications from its x86 systems to virtualized server environments on the IBM z114. The IT team anticipates that bringing its applications onto the IBM System z will form an instrumental part of its upcoming Service-Oriented Architecture (SOA) initiative.

“Leveraging the capabilities of IBM z/VM and SUSE Linux Enterprise Server for System z on the IBM zEnterprise 114 has really given us the opportunity to tighten the integration between different applications and our server environment,” states Gonzales. “Linux on IBM zEnterprise has created a middle ground that is helping us bridge the gaps between our System z platform and x86 environment.”

Impressive cost savings
Shelter expects the new solution to deliver substantial cost savings as it migrates more and more applications to virtualized Linux environments on the IBM z114. The highly virtualized Linux landscape on the IBM z114 offers extraordinarily high levels of processor utilization, because a single Integrated Facility for Linux processor is able to handle workloads equivalent to a large number of x86-based servers.

“Linux on System z is already saving us money on software licensing fees as the applications we have migrated are now running on fewer cores,” remarks Mark Workman, Systems Programmer. “As we move applications onto the System z, we are charged just for the number of IFLs. We can put as many servers out there as the IBM z114 can handle. So far, we haven’t bumped into that limitation yet, and we expect to save thousands of dollars a year on license costs as we move over more applications.”

Reducing complexity
Moving to a virtualized environment has also resulted in improved ease of management for IT administrators. By consolidating applications that had been running on physical x86 servers throughout its business units to virtual servers on the central System z platform, IT staff can now efficiently manage the applications from a single point of control.

“With Linux on System z, we can move workloads to the IBM z114, and then whenever we make the next System z platform move, all those workloads automatically move as part of that infrastructure," says Giglio. "There is no moving applications or virtual servers one at a time to a new platform.”

While Shelter is just at the beginning of its virtualization journey, with hundreds of applications still to be migrated, the IT team is enthusiastic about the future. Gonzales concludes, “Often it's difficult to predict what our customers want and to respond quickly to their demands, especially in an industry like ours where there’s a high degree of uncertainty. Linux on the IBM zEnterprise System is the technology of the future for Shelter because it helps us to be more agile and respond faster to changing demand."