Customer Solution Case Study

Telecom Firm Saves Energy, Reduces Server Costs by Four Times with Virtualization

OverviewCountry or Region: UkraineIndustry: Telecommunications

Customer ProfileKyivstar is a mobile communications operator with offices and subsidiaries throughout Ukraine. The company has approximately 5,000 employees and serves more than 25 million subscribers.

Business SituationFollowing tremendous growth, which resulted in server sprawl, Kyivstar wanted to reorganize and optimize its IT infrastructure with a goal of improving efficiency and reducing costs.

SolutionKyivstar virtualized part of its infrastructure by using Windows Server 2008 R2 Hyper-V. It manages its environment with the Microsoft System Center family of products.

Benefits Reduced costs by four times Improved business continuity Increased IT efficiency Reduced energy consumption by up

to 40 percent

“By using Hyper-V, we spent four times less than we would have had to spend to purchase physical servers in order to deliver new services.”

Andrey Shapoval, Infrastructure Department Manager, Kyivstar

Kyivstar is a telecommunications leader in Ukraine with a network that covers 99.9 percent of the country. After a period of tremendous growth and an increased number of subscribers, followed by a global economic downturn, Kyivstar made optimization and efficiency the top priorities for the company’s IT department. The company decided to use Windows Server 2008 R2 Hyper-V to virtualize a portion of its distributed IT infrastructure, consolidating 65 servers to only 25. It also implemented the Microsoft System Center family of products to help manage and maintain its virtual environment. As a result, the company can continue to deliver new services, but at four times less the cost of an equivalent physical server environment. Kyivstar also improved business continuity and IT efficiency, and it plans to reduce energy consumption by up to 40 percent.

SituationKyivstar is a national mobile operator and a leader in the Ukrainian mobile communications market with more than 25 million subscribers. The company covers 99.9 percent of Ukraine—its network serves all cities, towns, more than 28,000 rural communities, major national and regional roads, and most of the country’s sea and river coasts. In addition to covering a vast majority of the largest contiguous country in Europe, Kyivstar also offers roaming services in 188 countries on five continents.

Leading up to 2008, Kyivstar experienced fast business growth, stretching its sprawling server infrastructure, which runs on the Windows Server 2008 R2 Enterprise and Datacenter operating systems, to near capacity. Coupled with the pressures of a declining economic climate, Kyivstar developed a new IT strategy that involved large-scale reorganization to optimize business processes and improve IT efficiency. For instance, it wanted to better manage broad cluster solutions, including those distributed within city limits, for its geographically dispersed IT environment. “Cluster solutions were labor-intensive and time-consuming for us to manage,” says Dmitry Peshy, Department Manager of Server Platforms Support at Kyivstar. “We specifically wanted to improve load balancing and reduce faults for business-critical applications.

Kyivstar wanted to consolidate its server resources as part of its reorganizational efforts. “The need to consolidate servers and better utilize server resources was key,” says Peshy. The company hoped that by consolidating its infrastructure it could

better control costs, including minimizing capital expenses for new server hardware and reducing operational costs, such as those for power consumption and IT labor.

In addition, the telecommunications provider wanted to transition its IT organization to a services-oriented model, where the IT department delivers services that support the business. “Kyivstar has always been, and wants to remain, on the frontline of modern technologies,” explains Peshy. “We look to new technologies to help us meet the requirements of the business, to protect it, and to optimize IT costs.”

SolutionExecutive management at Kyivstar decided that server virtualization was an obvious choice to help it cost-effectively optimize its IT infrastructure. The company considered two virtualization offerings, Microsoft virtualization and VMware, and chose Windows Server 2008 R2 with Hyper-V technology along with Microsoft System Center Virtual Machine Manager 2008, Microsoft System Center Configuration Manager 2007 R2, and Microsoft System Center Operations Manager 2007 R2.

“We chose a virtualization solution from Microsoft based on several things,” recalls Peshy. “First, we already use several Microsoft technologies across our server and desktop infrastructure. Second, our IT personnel have expertise with Microsoft virtualization technology. Finally, we wanted to take advantage of our existing Microsoft Services Premier Support contract, which offers additional expert guidance.” The company chose Hyper-V

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over VMware after comparing the ease of operating and managing virtual servers, operating systems, applications, and services by using a solution based on Microsoft technologies. After selecting Hyper-V and the System Center family of products, Kyivstar decided to work with a third-party solution provider to help with the virtualization project. It evaluated several providers and chose Microsoft Gold Certified Partner BMS Consulting, an experienced system integrator also based in Ukraine. Kyivstar chose BMS Consulting because it provided impressive examples of completed work that demonstrated its ability to execute a virtualization strategy based on Hyper-V and ensure long-term project success.

Kyivstar worked with BMS Consulting to consolidate one set of 30 servers to only 15 physical servers—a 50 percent reduction. It completed the first phase of the project by the end of 2009. During the second phase of the project in 2010, the company consolidated another group of 35 servers, which support critical business operations, to only 10 physical servers—a 71 percent reduction. In total, the company consolidated 65 servers to only 25, which represents an almost 40 percent reduction. Kyivstar deployed Network Load Balancing in Windows Server 2008 for its virtual server clusters to help balance network traffic across the distributed environment.

The telecommunications company also implemented several technologies from the System Center family of products to help manage its virtual infrastructure. Kyivstar uses System Center Virtual Machine Manager 2008 to centrally manage its

virtual servers across its geographically dispersed IT infrastructure. By using Virtual Machine Manager, the company can consolidate multiple physical servers onto virtualization servers running Hyper-V. In addition to reducing the sheer size of its physical server infrastructure, the company optimizes server resources with Virtual Machine Manager through dynamic resource allocation capabilities.

Kyivstar also uses System Center Configuration Manager 2007 R2 to centrally configure its virtual machines and deploy server updates across its distributed environment. It monitors the state, health, and performance of its virtual machines by using System Center Operations Manager 2007 R2, which provides end-to-end service management.

BenefitsAs a result of implementing a virtualization solution based on Windows Server 2008 R2 with Hyper-V and the System Center family of products, Kyivstar reduced costs, improved its ability to provide services for better business continuity, increased IT efficiency, and reduced its energy consumption.

Reduced Costs—Up to Four Times LessBy using Hyper-V to consolidate its physical servers, Kyivstar reduced a portion of its server infrastructure by almost 40 percent—from 65 servers to only 25 physical servers, each hosting multiple virtual machines. As the company continues to expand, it can deploy additional virtual machines to its host servers, avoiding the need to purchase new server hardware each time. Thus, the company optimized its

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“By using a Microsoft virtualization solution, we increased work efficiency many times over.”

Ivan Ivchenko, Grade 1 Engineer, Server Platforms Support Department, Kyivstar

computing resources and significantly reduced capital expenses. “By using Hyper-V, we spent four times less than we would have had to spend to purchase physical servers in order to deliver new services,” says Andrey Shapoval, Infrastructure Department Manager at Kyivstar.

Improved Business ContinuitySince implementing its virtualization solution, Kyivstar is better able to meet business requirements and help to ensure continuity. Now, IT technicians can distribute server loads in a timely manner. They use Network Load Balancing clusters to direct idle server resources to process an increased number of server requests across its distributed server infrastructure. As such, the IT department substantially reduced the effect of infrastructure faults on the company’s business-critical software applications—lessening disruptions to business operations. As a result, Kyivstar improved the quality and reliability of the services it provides to Kyivstar subscribers.

Increased IT EfficiencyKyivstar can now centrally manage and monitor its physical and virtual servers. By using System Center to monitor the state, health, and performance of its servers, Kyivstar increased server usage and optimized server load. “It was important for us to reduce the amount of time needed to complete routine administration tasks,” explains Ivan Ivchenko, Grade 1 Engineer in the Server Platforms Support Department at Kyivstar. “By using a Microsoft virtualization solution, we increased work efficiency many times over. Now, we can use System Center to focus on automation and quality control.”

Improved Energy Efficiency by 40 PercentAs a result of reducing the number of physical servers by almost 40 percent, Kyivstar increased energy efficiency. This complies with the company’s “Green Office” program, a strategy that is focused on increasing the environmental safety of the business through the use of energy-saving technologies. Kyivstar expects to consume 30 to 40 percent less energy as a result of its virtualization efforts.

“Server platform virtualization technologies help us improve energy efficiency by significantly reducing power requirements and data processing surface areas,” explains Shapoval. “We are also improving environmental safety for our employees by decreasing hazardous emissions.”

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“Server platform virtualization technologies help us improve energy efficiency by significantly reducing power requirements and data processing surface areas. We are also improving environmental safety for our employees by decreasing hazardous emissions.”

Andrey Shapoval, Infrastructure Department Manager, Kyivstar

Microsoft Cloud Power Microsoft offers a complete set of cloud-based solutions to meet business needs, including solutions for advertising; communications (email, meetings); collaboration (document storage, sharing, workflow); business applications (customer resource management, business productivity); data storage and management; and infrastructure services. In addition, customers can take advantage of an entire ecosystem of solution providers and Microsoft partners.

For more information about Microsoft Cloud Power, go to: www.microsoft.com/cloud

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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 BMS Consulting products and services, call +38 (044) 499 69 69 or visit the website at: www.bms-consulting.com

For more information about Kyivstar products and services, call +38 (044) 466 0 466 or visit the website at: www.kyivstar.ua

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

Document published June 2011

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

Configuration Manager 2007 R2− Microsoft System Center Operations

Manager 2007 R2

− Microsoft System Center Virtual Machine Manager 2008

Technology− Hyper-V

Hardware HP ProLiant BL680 G5 servers

Partner BMS Consulting