Internal Code: IAH238
DATA CENTER CONSOLIDATION AT GUARDIAN LIFE
As one of the largest mutual life insurance firms in the United States, Guardian Life (www.guardianlife.com) has more than 5000 employees and over 3000 financial representatives in 80 agencies. Guardian and its subsidiaries provide almost three million people with life and disability income insurance, retirement services, and investment products such as mutual funds, securities, variable life insurance, and variable annuities. The company also supplies employee benefits programs to six million participants, including life, health, and dental insurance, as well as qualified pension plans. In addition to regional home offices in New York City; Bethlehem, Pennsylvania; Spokane, Washington; and Appleton, Wisconsin, the company has 55 remote sales offices and 80 remote agency offices.
Like other insurance companies, Guardian Life is an information intensive organization where data processing and communications network infrastructure have consistently been important contributors to its success. Guardian Life’s IT organization has earned numerous accolades including multiple CIO100 awards from CIO magazine [PRNE11]. According to Dennis Callahan, Executive Vice President and Chief Information Officer for, Guardian Life, “A strong partnership between IT and the businesses enables Guardian to deliver cost-effective technology services that facilitate world- class customer service, product innovation, and operational efficiency.”
Ensuring alignment between business and IT is important to Guardian Life and provides a consistent theme for many of the insurance companies IT projects including its data center consolidation initiatives [CIOZ12]. Data center consolidation has been an ongoing concern at Guardian for more than a decade. Guardian’s IT governance structure is team-oriented and the company’s data center consolidation initiatives are overseen by it Infrastructure team. The Infrastructure team is primarily co-located in New York, and Bethlehem, Pennsylvania but it has key support teams in Spokane, Washington, Appleton, Wisconsin, and Pittsfield, Massachusetts.
Guardian Life began taking a serious look at data center consolidation in 2000, but in the aftermath of the September 11, 2001 terrorist attack, Guardian also became more concerned with business continuity issues.
Guardian had four significant data centers, at its four home offices, but the primary data center was in New York City. After 9/11, Guardian wanted make infrastructure changes to ensure business continuity across its existing
data centers and made plans to add two more data centers to the mix. Guardian performed an assessment of its data centers to provide a basis for planning on the location of data processing resources. One surprising outcome of this assessment had to do with utilization. The assessment revealed that the four data centers had about 1000 UNIX and NT servers, with an average capacity utilization of 10%. Even at peak demand, only 25% of the processing power of the servers was being used [MUSI02]. Guardian responded to this assessment with a plan that included the following objectives:
1. Move the primary data center from New York City to Bethlehem, Pennsylvania.
2. Improve the efficiency of its data centers, including server and storage utilization. Specifically, Guardian set a goal of reducing the number of servers supporting Guardian’s applications and databases by 40% and reducing the server support staff by 60%.
3. Ensure a smooth transition to the new primary data center.
The company chose IT consulting firm Greenwich Technology Partners (GTP) to help it design and carry out the transition. GTP began with an assessment of the company’s IT environment and looked at the impact of
moving the data center from New York to Bethlehem. A major issue related to the move was that the largest number of data center users was located in the New York area. Thus, the new deployment needed to provide sufficient
data transmission capacity to meet these users’ needs. Fortunately, the network infrastructure already in place was fairly standard and easily scalable (Figure C7.1).
1. Do some Internet research on the reasons why businesses generally invest in data center consolidation projects. What benefits do they commonly hope to realize? How do Guardian’s rationale for consolidating data centers compare to those of other businesses?
2. Getting outside consultants to manage data center consolidation projects is a common practice. Discuss the pros and cons of using consultants to manage data center consolidation projects?
3. How/why has virtualization fueled business interest in data center consolidation?
4. Why is the availability of high-speed, high bandwidth communications an important consideration in data center consolidation plans and decision-making?
5. Do some Internet research on modular (pod) data centers. Summarize the advantages of disadvantages of modular data centers.
6. Guardian is consolidating from six to two data centers supplemented with SaaS cloud services. As the company continues to move applications to the cloud, could it consolidate to zero data centers? Why or why not?
7. Do you think that winning multiple CIO 100 awards has encouraged Guardian’s IT executives to recommend risky IT projects? Why or why not?
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