How Schwan's Foods Cashed In on Virtualization

John Mount's attitude toward server and desktop virtualization couldn't be more enthusiastic.

"If we can virtualize it, we will," says Mount, senior director of IS infrastructure for Schwan's Foods, a multibillion-dollar, privately-held frozen foods company with 22,000 employees, headquartered in Marshall, Minn.

Mount and Cory Miller, senior IT operations manager, are responsible for virtualizing more than 50 percent of the company's servers and desktops in the past six years. That's a lot of cost put on ice.

Schwan's virtualization project began in 2002, with the focus on reducing space in the data center and facilitating a disaster recovery plan.

"Both projects started out focusing on two different requirements," says Kathleen McNulty, senior VP of information services and CIO for Schwan's. "As we saw the values virtualization could provide our company, additional benefits were identified at that time, which expanded into our virtualizing many of the desktops in the company."

In 2002, Mount and Miller started by virtualizing 30 to 40 servers using VMware ESX Server.

And so far, Schwan's, having spent about $2.2 million on their virtualization projects, has realized a savings of over $900,000 by eliminating the need to buy 100 additional servers. Because they extended the life of their desktop machines by converting to Wyse thin client Windows appliances, they also saved more than $1.5 million on the purchase of new PCs, according to Schwan's.

"We had a lot of hardware that was due to be replaced," says Miller. "In many cases, without virtualization, we would have to rebuild and reinstall the software and operating system and go through the testing process. Since we were virtualized, we were able to just move the hardware onto the VMware platform and save our operations and development teams a lot of time."

By consolidating servers, the company also reduced its electrical consumption, which resulted in a savings of $10,000 to $12,000 per month.

All these benefits grew out of Schwan's desire to extend the life of its data center and reduce its space requirements.

"Our data center was about 90 percent full at one point, so we saw ourselves growing beyond its capacity if we didn't do something," says Mount. "As we projected out three years and planned where we were going to put the servers and expand and what servers we were going to put in, we realized that we were going to run out of capacity in a very short period of time."

By reducing data center space, Schwan's IT team has been able to raise their air conditioning setpoint by one degree and reap the savings.

"Since we are in the middle of summer, we anticipate that in a month we'll be able to raise it another degree," says Mount. "This will save a lot in energy and extend the life of air-conditioning units themselves."

Schwans has also been able, through virtualization, to reduce the amount of rack space consumed by network gear. And, the company, through attrition has been able to reduce staffing as well -- "We'll see an annual savings of $350,000 over the next two years," says Mount.

What else is innovative about Schwan's virtualization project? Virtualization has transformed the company's disaster recovery plan, Mount says.

"By using virtual desktops we can virtualize a lot of their environments and transfer them or copy them to the DR site, so when our infrastructure is up, many of the key individuals can be up and running and able to meet our recovery time objective much quicker," says Mount.

"The last time we tested our disaster recovery plan, we brought up 150 servers in 3 to 4 hours," Mount says.

By virtualizing the servers, Mount is able to replicate them to the disaster recovery site located 600 miles away in Chicago.

"With virtualization, we are able to buy less physical hardware at our disaster recovery site and are able to bring up more systems on the same amount of physical hardware," Mount says.

Mount and Miller have seen the benefits of consolidation in other parts of their data center, as well.

"We've reduced the number of servers in our environment by 33 percent," says Mount. "Just two months ago, we removed 54 physical servers." The company has virtualized 460 physical servers.

For all these reasons, Schwan's virtualization project has been a success on levels that go beyond saving space.

"We've been able to reduce space in the data center and make management easier, as well as create a disaster recovery site that provides a cleaner, simpler and more effective solution," Mount says.

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