Information Technology Reference
In-Depth Information
ETHICAL AND
SOCIETAL ISSUES
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, Nation-
wide 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 pri-
mary 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 Nation-
wide, 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 com-
pany'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 condi-
tioning 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 lit-
tle 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, Nation-
wide eventually needs to build an additional data center. They don't
need the server space anymore, but the infrastructure of the build-
ing 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.
Discussion Questions
1.
What issues did Nationwide face with their data centers?
What considerations determined the data center's pro-
cessing capacity?
2.
What three techniques did Scott Miggo implement to save
Nationwide hundreds of millions of dollars?
Critical Thinking Questions
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 cen-
ter and reduce the cost of operations?
SOURCES:
Bartholomew, Doug, “Refurbishing Old Data Center Provides Big
Savings,” CIO Insight, September 11, 2007,
www.cioinsight.com/c/a/Case-
Web site,
www.nationwide.com,
accessed July 19, 2008.
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