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1/23/2004
11:12 AM
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From Power On To Power Up

Think the Web is old news? Actually, it's just getting interesting.

Online shoppers rang up a record mass of purchases this past holiday season (yes, again--$18.5 billion worth, according to one recent survey), and all appeared to proceed without any big, embarrassing Web-site crashes. This online holiday nonevent raises a question about Web technology, though: Without the threat of a public outage, has doing business on the Web become business as usual?

Don't bet on it. Some companies continue lavishing attention on their Web sites, whether it's improving personalization, cutting costs from bloated operations, or applying the lessons of E-retail Christmases past. It's a learning process sure to serve up new, sometimes harsh lessons. "Everyone went through it the first time with their initial E-commerce sites," says Chris Dudley, an operating VP for software development at Federated Department Stores Inc., which owns Macy's, Bloomingdale's, and five other retailers. "But there are going to be other aspects where we get caught from a performance perspective."

Federated is using know-how from its Macys.com and Bloomingdales.com shopping sites to design a Web portal for employees to manage $1 billion in annual ad spending. Microsoft is pouring money into its flagship site to keep up with employees and customers who insist on ever-increasing depth of interaction. Cigna Corp. is striving to slash a quarter of its Web-site server budget. These and other companies show why the Web will be anything but boring in 2004.

The Cheapskate
Jeff O'Dell can be a bit of a risk-taker on technology, but he's a regular martinet when it comes to costs. The VP and chief architect for Cigna's technology group near Hartford, Conn., set a goal of eliminating 25% of the insurer's server operating expenses for the 37 applications that make up Cigna.com. These days, just keeping a Web site up and running with good response times doesn't impress anyone. "The question now is, can we do it for less?" O'Dell says.

Cigna was profitable in the first nine months of 2003 after a disastrous 2002, when it had $19.3 billion in revenue but underpriced health-insurance products, began laying off 3,250 people, and lost nearly $400 million.

O'Dell's group, which builds prototypes and proofs-of-concept for the company, is working with a team of about 100 IBM software engineers and researchers in what IBM calls its "high-volume Web sites lab" on early versions of software that can tie together online applications in ways that drastically reduce the number of computers needed to run them. "We're moving to a new level of maturity in high-volume Web sites," O'Dell says. "In the past, we threw cost considerations to the wind." Cigna is trying out IBM software code-named Cayuga that can add processors to applications as needed, reducing the need to buy more servers and software licenses to cover peak demand.

Cigna's Web apps, which include the widely used online pharmacy Tel-Drug, receive huge spikes during peak times such as benefits-enrollment periods and are nearly idle at others. They get about 80 million page views a year. "We're not the Victoria's Secret fashion show, but if you add it all together, we start looking like a really big Web site," O'Dell says.

Ben Flock -- Photo by Jason Grow

Cigna VP Flock is pushing vendors to help the insurer cut a quarter of its server expense.

Photo of Ben Flock by Jason Grow
Ben Flock, Cigna's VP of virtualization, isn't entirely sure the company can hit that 25% cost cut, but he's pushing vendors such as Microsoft to help. The company bought in early to Microsoft's latest server version of Windows in hopes of eliminating machines by doubling up applications on some servers. It's also trying to make its application code more independent of the Windows, Linux, and Solaris software on the machines that run them. That could give Cigna more leeway to bring platforms into its data center without the expense of porting code. It also could let Cigna salvage value from bound-for-the-dustbin servers no longer covered under a manufacturer's warranty by making them part of a cluster. In that scenario, if a server dies, the impact on Web performance could be a lot less than if it were dedicated to a single application. "The underlying hosting can be a collection of boxes, and it just looks like raw capacity," Flock says.

That kind of sophistication will let the best-run Web sites fine-tune their capacity needs. Says O'Dell: "For each app, we had as much capacity as we thought we'd need, and more. These sites cost quite a few million a year to keep going, and we're hoping to take a big chunk out."

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