Go Virtual, Stay Agile

After the design engineers, manufacturing operations, and test drivers have finished with a Volkswagen, it's up to the company's dealerships to sell the cars. A key component to closing deals falls to VW Credit Inc. and its business-technology staff. It's their job to give the company's 1,000 Audi, Bentley, and VW dealerships in the United States and Canada access to the latest interest rates and to let them run credit checks and make credit-approval decisions.

If VW Credit's systems are slow or down, business walks out the door. With stakes this high, VW Credit executives have taken the first steps toward utility computing, where data and computing power can be automatically moved through an IT infrastructure as needed. Major tech vendors such as Hewlett-Packard, IBM, and Sun Microsystems for the past few years have been pushing the virtualization of business-technology resources as the foundation of utility computing.

"Virtualization will let us make dynamic server allocations based upon the amount of power we need," says VW Credit CIO Jack Klosterman. "This lets us turn on servers as our applications peak while reducing the overall number of servers."

Having standardized operations on HP servers and desktops, Klosterman is most interested in Adaptive Enterprise, HP's name for utility computing. "We don't know when our network traffic will increase or decrease, so we have to be ready," he says.

Blade servers and PCs are the most logical way to start a virtualization strategy, says Gary Sheaffer, VW Credit's director of technical services. "Ramping up isn't an easy thing to do," he says. "But the concept is that these blades could be allocated to any of our applications when demand increases."

HP has offered blade servers for several years and recently unveiled blade-style PCs, which consist of an HP T5000 thin-client desktop device that connects via Ethernet to a rack of CPUs running Transmeta Corp.'s Efficeon processors and Windows XP Professional. Scheduled for availability during the first quarter, the blade PCs let users share CPU resources, regardless of a desktop's location. The combination of thin client, blade PC, network storage, implementation, training, and support is expected to cost an average of $1,500 per desktop.

Using blade PCs to deliver virtual desktop environments from the data center would let VW Credit cut the number of desktop PCs it uses by as much as 30%, Sheaffer says. Although the company's 1,000 call-center employees will each have a thin client on their desks, they wouldn't need 1,000 blades on the back end because not everyone on the staff uses a PC at the same time.

The first move in making virtualization a reality is to replace aging servers with blade servers during the normal replacement cycle. The next step is to figure out which applications are best suited to run in a blade environment. One application VW Credit has moved to its HP BL10e blade servers is LoanCenter from Appro Systems Inc. Beyond that, VW Credit is using HP Insight Manager software and F5 Networks Inc. load-balancing technology to manage the blades.

Not all of HP's financial-services customers are ready to move to utility computing. First Trust Corp. is standardizing its data center on HP Itanium-based Integrity servers but won't create a virtual environment just yet. As the business grows, utility computing could be a competitive advantage, says Jeff Knight, VP of technology and vendor relations for First Trust, a subsidiary of data-processing company Fiserv Inc. "First we would want to see it functioning in a real-life business environment," he says.

The virtualization of IT resources such as server and PC capacity also will satisfy the market's demand for flexibility, says Tom Bittman, a Gartner VP and research director. "A year ago, it was about cost for everybody," he says. "They would say, 'I don't care what you call it, as long as it cuts costs.' Today, however, it's also about agility."