Windows Server 2008 R2Customer Solution Case Study

Wholesaler/Retailer Switches from VMware to Hyper-V for Application Agility, Lower Cost

OverviewCountry or Region: AustraliaIndustry: Retail

Customer ProfilePacific Brands, based in Melbourne, Australia, makes and markets popular consumer brands throughout Australia, New Zealand, the United Kingdom, China, and Indonesia. It has 3,600 employees.

Business SituationAs the technology infrastructure at Pacific Brands grew, so did its challenges in delivering applications to the business quickly and cost effectively.

SolutionAfter virtualizing its server environment using VMware, Pacific Brands switched to a Microsoft virtualization solution based on Windows Server 2008 R2 SP1 with Hyper-V and Microsoft System Center.

Benefits Achieved reliability needed to support

business, renew trust in virtualization Avoided future significant costs of

physical servers Deploys applications in days, not

weeks

“Through our use of Microsoft virtualization, we’ve taken our IT infrastructure from a constrained environment to a strategic asset that Pacific Brands Integrated Services uses to support the business.”

Brent England, Technical Services Lead, Pacific Brands

Pacific Brands—the AU$1.6 billion (US$1.68 billion) maker and marketer of popular consumer brands throughout Australia, Asia, and the United Kingdom—didn’t like the technology growth that made its infrastructure costly and inflexible. After trying to manage its server computers using VMware ESX software, Pacific Brands switched to a Microsoft virtualization solution based on Windows Server 2008 R2 SP1 with Hyper-V technology and Microsoft System Center products. By going virtual and adopting Microsoft virtualization, Pacific Brands avoided capital costs to deploy new servers and replace aging hardware and annual operating expenses for that hardware. It also reduced its software licensing cost by not having to license VMware separately. The IT department now supports the business better—with more numerous and faster application deployments and greater system reliability.

SituationPacific Brands has grown from the Victorian-era maker of Dunlop bicycle tires to a master manufacturer and marketer of more than 200,000 consumer products that it sells throughout the “Australasian” retail marketplace and the United Kingdom. The company now sells more than 200 million units a year worth about AU$1.6 billion (US$1.57 billion).

The number of server computers at Pacific Brands continually increased to support business acquisitions and strategic applications. By 2007, the company’s IT infrastructure had grown to more than 70 servers in its data center, plus almost as many in its regional offices—and it kept growing.

Order, Receive, Configure, DeployEvery time the business wanted to adopt a new application, it had to order, receive, configure, and deploy additional servers to support it. Operating expenses increased with each new application, too. This made it difficult if not impossible to deploy new applications as quickly as the business wanted to use them. It often took more than six weeks to meet the hardware and related requirements for new applications.

“Delivering new infrastructure on a delayed basis was frustrating,” says Brent England, Technical Services Lead at Pacific Brands. “Businesses want to move quicker—and technology was keeping us from doing so. We needed a better way to serve the business.”

The lack of agility was a key concern for Pacific Brands, but there were other concerns. Servers were expensive to acquire—from AU$8,000 to $20,000 (US$7,900 to $19,700) each—and to support, maintain, and power. An application-per-server approach boosted reliability, but at the cost

of significantly underutilized compute resources. The company then added more applications per server, which made each server more cost effective, but at the cost of availability: when a server was taken out of service for maintenance, multiple applications, not just one, were rendered unavailable. The IT department was under continued pressure to manage an ever-growing number of applications. It needed a new approach in order to slow down, if not reverse, the proliferation of hardware.

A New Approach: VirtualizationAt first, England and his colleagues thought they had a new approach in server virtualization through using VMware. Virtualization offered the chance to run several virtual machines on each physical host, drastically reducing the count of physical servers in the IT environment and increasing the utilization of each one. They tried an isolated pilot project of VMware ESX software and were extremely pleased with the results, leading to a data center virtualization strategy.

The virtualization strategy offered many benefits for Pacific Brands including the agility to deploy operating systems, replace aging hardware with virtual instances (without ongoing lease costs), and create development environments. Pacific Brands was able to realize significant savings from the strategy and reinvest the savings in business-related projects.

Performance DeclinesInitially Pacific Brands deployed VMware ESX 3 on 5 hosts, and soon brought the number up to 17 hosts while upgrading to ESX 3.5. But it found that as the count of VMware hosts rose, so did the number of problems. Performance on the virtualized servers declined, leading Pacific Brands to add hardware—exactly the opposite of its goal in adopting VMware.

“Businesses want to move quicker—and technology was keeping us from doing so. We needed a better way to serve the business.”

Brent England, Technical Services Lead Pacific Brands

“We bought more hardware for the VMware environment; however, the issues were not addressed.” says England.

The performance issues in the virtual environment had the application owners and IT development teams questioning the suitability of virtual machines for their applications. “In one instance, we actually had to ‘un-virtualize’ an application to stop the noise,” says England.

A consultant advised that the company’s problems with VMware could be addressed by an upgrade to a new version. That would have required a significant licensing expense in any case but, as it turned out, Pacific Brands had more than doubled its server count to about 140 during its experience with VMware. Company managers were keen to renew confidence in virtualization even if that meant looking elsewhere for a solution.

SolutionWhile Pacific Brands was investigating alternatives, the company’s Microsoft Enterprise Agreement for volume licensing was due for its annual “true-up,” the point at which the amount Pacific Brands spent for Windows Server licenses was adjusted to reflect the number of licenses it actually used. Because of the large number of servers it had added within the previous year, the amount that Pacific Brands spent for those licenses was set to increase, too, by almost as much as the company would have to pay for new VMware licenses.

In talking with Microsoft consultants, England realized that Pacific Brands was not just obtaining the server software with those Windows Server licenses—it was also acquiring Hyper-V virtualization technology. By using Hyper-V, Pacific Brands could virtualize its IT environment

without the need for VMware—or VMware licenses.

Addressing the Performance IssuesPacific Brands realized that it would save money by moving from VMware to Windows Server 2008 R2, but wondered: would the move solve the performance problems that the company experienced with VMware? The IT department had traced those performance issues to the interfaces between the virtualization technology and the infrastructure’s storage arrays. When the company discovered that Windows Server 2008 R2 and Hyper-V technology included drivers that were designed to address precisely that problem, the issue was resolved.

“The performance concerns we had with VMware were addressed out-of-the-box with Hyper-V,” says England.

To design and implement the move to Hyper-V, Pacific Brands turned to its longtime technology provider, HP. The company has multiple relationships with HP, outsourcing IT management to it, buying its computers, and engaging it for major projects—such as the adoption of Hyper-V.

“HP hardware is completely dependable, which is good because, with the virtualization environment, we depend on it more than ever,” says England. “We’ve moved from standalone HP servers to the BL BladeSystem blade servers—and after a year in production, we haven’t had an issue with an HP server failing. However, engaging HP for service means we have a single vendor for resolutions should problems arise.”

Pacific Brands has nearly completed a 100 percent move from VMware to Hyper-V in its data center, which now hosts 210 virtual

“The performance concerns we had with VMware were addressed out-of-the-box with Hyper-V.”

Brent England, Technical Services Lead Pacific Brands

machines on 10 physical servers, compared to the previrtualization census of up to 140 physical servers. Pacific Brands uses the virtual environment to run the entire business, from infrastructure elements such as domain controllers and Active Directory services, to enterprisewide applications, such as Microsoft Exchange Server, Microsoft SQL Server 2008 R2 database management software, Microsoft Dynamics CRM, and Microsoft SharePoint Server 2010. The virtual environment also runs third-party applications such as JD Edwards enterprise resource planning software, and specialized retail management software that includes applications running on Red Hat Enterprise Linux.

Monitoring and Managing with “Comprehensive” Set of ToolsBoth HP and Pacific Brands use Microsoft System Center products to monitor and manage the virtual environment. For HP, System Center is a comprehensive set of tools for speeding the deployment of virtual machines, upgrading physical servers, and monitoring and managing the health of operating system instances. HP uses System Center tools to move virtual machines from one physical host to another in order to maintain uptime during scheduled maintenance. It uses dynamic memory management to increase the density of virtual machines per host, which has risen from 9 to 20, an increase of 122 percent.

With HP committed to service-level agreements for system uptime, Pacific Brands might appear to have no need to use System Center itself—but it does. “We don’t look at the operating system, but we do care about our apps, whether they’re running, and how well they’re running,” says England. “System Center Operations Manager management packs were a pleasant surprise to us, giving us instant

visibility to core applications. We now use the System Center dashboard as a ‘single pane of glass’ into our application environment.”

As a second phase to its adoption of virtualization, the company now is rolling out the technology to its approximately 30 regional offices, which house servers for file/print, email, and specialized local applications. For example, the payroll application for Pacific Brands workers in Hong Kong needs to reside in the local branch office, for legal reasons. “By using Hyper-V, we can address unique needs in our branches, wherever they are, without having to ship out additional physical servers—and then having to support them,” says England.

BenefitsPacific Brands now deploys applications faster, spends less on both capital and operating costs for its infrastructure, and operates its virtual environment with confidence.

Achieved Reliability Needed to Support Business, Renew Trust in VirtualizationPacific Brands sees reliability as the key to providing the business with the support it needs. Microsoft virtualization delivers that reliability, according to England. Performance and stability of the Hyper V deployment exceeded Pacific Brands expectations. Pacific Brands IT was able to use the new infrastructure to regain the trust of application owners and developers in virtualization. Now, the company’s business managers see virtualization as an asset, too.

“The difference between VMware and Hyper-V is that now I’m not answering calls all the time with complaints about applications not running because of virtualization,” says England. “Before we

started using Hyper-V, I had to defend virtualization to our internal customers every week. Now, no one complains. I don’t have those fires to put out any more.”

Avoided Future Significant Costs of Physical ServersPacific Brands adopted virtualization partly to lower costs. Then it moved from VMware to Microsoft virtualization to decrease them further. That effort has been successful.

England estimates that the infrastructure growth at Pacific Brands since it began virtualization would otherwise have required a significant capital expenditure investment to support additional physical hardware. The company also reduced its licensing cost for operating system and virtualization software by 50 percent by moving from VMware to Windows Server 2008 R2 and Hyper-V.

“We would not have built the infrastructure we have—and be able to support our business as well as we do—without our use of Microsoft virtualization,” says England.

Deploys Applications in Days, Not WeeksOne of the most pressing needs at Pacific Brands was to regain the agility it had lost to a physical infrastructure in which every new application required one or more new server computers. The company has met this need through its virtualization strategy, which is strengthened by the use of Hyper-V technology and System Center tools.

Without having to acquire new computers for new applications, Pacific Brands has shaved six weeks from the typical time to deploy applications, reducing that process to two days, a significant increase in speed to market. Not only has the application deployment process been expedited through the use of Microsoft virtualization, so have application management processes

such as creating additional virtual machines to handle increases in demand or for test and development. Such virtual machines can be taken down as soon as they’re no longer needed, which boosts cost-effectiveness and agility.

“Through our use of Microsoft virtualization, we’ve taken our IT infrastructure from a constrained environment to a strategic asset that Pacific Brands Integrated Services uses to support the business’s strategic projects,” says England. “The retail marketplace is only getting more competitive, and it’s not going to wait for us to deploy the applications that the business needs. Now, there’s no wait.”

The ability to deploy applications much faster than before removes a considerable workload from the shoulders of England and his colleagues. They reinvest the newly available time into deploying additional applications that might otherwise be delayed for months.

“We would not have built the infrastructure we have—and be able to support our business as well as we do—without our use of Microsoft virtualization.”

Brent England, Technical Services Lead Pacific Brands

Windows Server 2008 R2Windows Server 2008 R2 is a multipurpose operating system designed to increase the reliability and flexibility of your server and private cloud infrastructure, helping you to save time and reduce costs. It provides you with powerful tools to react to business needs faster than ever before with greater control and confidence. For more information, visit:www.microsoft.com/en-us/server-cloud/windows-server

For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about HP products and services, visit the website at:www.hp.com

For more information about Pacific Brands products and services, call (61) (3) 9947 4900 or visit the website at: www.pacificbrands.com.au

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published June 2012

Software and Services Microsoft Server Product Portfolio− Windows Server 2008 R2 Enterprise

SP1− Microsoft System Center

Technology− Hyper-V

Hardware HP BL BladeSystem servers

Partner HP