case study Virtualizing its IT infrastructure was more than just a technical transformation for ABN AMRO, as it also gleaned "enormous" benefits such as greater savings on capital expenditure and faster disaster recovery, said a company executive.
Dirk Sibiet, country technology officer of ABN AMRO Singapore and United Arab Emirates (UAE), said the decision to adopt virtualization sprung out of its need to integrate the two distinct IT environments of ABN AMRO and Fortis Bank Nederland. The two institutions merged into a single entity in July 2010.
Once the merger was legally ratified, the next step was to integrate both banks' business and infrastructure into one single platform, he noted. To pave the way for the integration, the ABN AMRO management team decided against buying more servers, opting to fully virtualize its two data centers in Singapore instead.
Thus, Project Sivia (Strategic Integration Virtualized Infrastructure for Asia) was borne, the executive said. Virtualization vendor VMware oversaw the migration, which began in April 2011 and completed by mid-September last year. The investment was a "six-figure sum", he added.
Virtualization to overcome challenges
According to Sibiet, only part of ABN AMRO's IT infrastructure was already virtualized before Project Sivia, as some applications were running in a virtualized environment while others were still on physical servers. The heterogeneity caused inconsistencies with regard to data synchronization across the two data centers, he noted.
The data inconsistencies also meant failovers took a tedious amount of manual configuration that lasted between 4.5 and 5 hours, which in turn hindered disaster recovery, he stated.
In addition, the bank was running applications on a number of operating platforms, including SQL2000, SQL2005, Windows 2000 and Windows 2003. "So we were looking at five, six different flavors of operating systems and database environments which, from a management perspective, create enormous overheads," he said.
Project Sivia was thus conceived as a solution to resolve all these challenges at one go, Sibiet explained.
The bank was also able to build its new IT environment with just 10 physical servers using virtualization when it would have otherwise taken 110 servers, he revealed. With less hardware, it enjoyed other savings on rack space, electricity bills, and manpower to manage, he added.
Furthermore, the 10 servers run more efficiently at an average workload of 55 percent, as compared to 110 servers running at 1 percent, which meant better use of hardware resources, henoted.
FSI to "rekindle" interest in virtualization
Sibiet also pointed out that the banking industry benefits most from virtualization, even though the advantages mentioned earlier would appeal to various other industries as well.
One reason is because virtualization technology enabled ABN AMRO to have a faster, more seamless failover between its two data centers. Previously, it would need a team of 10 IT specialists "working frantically" to get the systems back up and running after 4.5 hours, but with virtualization, non-tech employees are able to do the same in just over an hour.
"[This] is an enormous benefit [for banks]," Sibiet emphasized.
A fully virtualized environment would also allow the bank to easily provision additional resources for applications to cover peak performance requirements, he said.
"In banking, as compared to say manufacturing, the workload on applications goes up and down as the market goes up and down", the technology chief explained. "If you go virtual, you can scale it down as long as you have capacity to quickly upscale the performance requirements as the market becomes more volatile."
At the same time, provisioning new applications can be done faster, Sibiet added. Where it used to take up to 10 days to build an environment for an app, it now takes just 15 minutes, which is another major benefit from a time-to-market perspective, he noted.
Since financial institutions have the most to gain from virtualization, Sibiet said the industry will "rekindle" the advancement and adoption of the technology. IT is a "self-fulfilling business model" in that when customer demand comes, vendors will rush to deliver, and the two sides push each other up, he stated.
"I think every bank worldwide has, to a certain extent, already adopted a virtualization roadmap. The next step is to be slightly more aggressive in the rollout of virtualization solutions because as the tooling around virtualization becomes more effective, you can do more within the same environment," Sibiet pointed out.