IT taps new source of savings for Bank of New Zealand

IT taps new source of savings for Bank of New Zealand

Linux solution helps maximise space, keep costs down and reduce carbon footprint.

A Linux solution from Red Hat helped the Bank of New Zealand (BNZ) to maximise space, while keeping costs down. The company also managed to reduce carbon emissions. BNZ was the first bank in New Zealand to use Red Hat for mainframe consolidation.

“The issues we were dealing with were not necessarily unique, but a reflection of the current business climate,” says BNZ infrastructure architect Lyle Johnson.

“BNZ had defined two important goals for the future, both of which relied heavily on IT. The first was for the organisation to become carbon neutral by 2010 and the second was to explore open source opportunities through the adoption of Linux.”

Another challenge the bank faced was to create a disaster recovery solution. Its datacentres were in different countries – in Auckland, New Zealand; and Melbourne, Australia.

In 2007, BNZ overhauled its front-end IT environment, including the bank’s internet banking and back teller functions through to backend data. It migrated systems to Red Hat Enterprise Linux 5, running under z/VM on the mainframe.

According to the company, the combination of z/VM and Red Hat Enterprise Linux 5 enabled BNZ to virtualise a largely distributed Sun environment, which incorporates all of its front-end systems, down to just one box.

A critical component in the ongoing management of its new systems, BNZ also incorporated Red Hat Network Satellite. This system provides BNZ with the ability to combine provisioning, updating, patching and maintenance into a single function. By doing this, the bank was able to re-provision its entire teller platform development environment in approximately two hours.

“When it came to selecting a Linux provider, the choice to invest in Red Hat was largely based on its commitment to the ongoing development of the platform and its strong support capabilities, particularly in reference to supporting Red Hat Enterprise Linux on the mainframe,” says Johnston.

BNZ’s first production load on the new system went live in August 2008.

Johnston says deploying IBM mainframes with Red Hat Enterprise Linux to address its carbon footprint and cost savings concerns was considered critical, especially at the senior management level.

“It provided us with the opportunity to take a very serious leap into Linux and that was exciting for everyone in IT and beyond,” he says.

To date, the bank has consolidated 131 Sun SPARC systems to the new system.

While the move to Linux represented a major shift from traditional banking systems, for BNZ the migration to Red Hat Enterprise Linux on IBM System z platforms produced impressive returns.

After just three months the project was ahead of schedule and on budget. BNZ was able to consolidate its servers and reduce its front-end systems datacentre footprint by 30 percent. The bank also noted cost advantages with 20 per cent ROI expected over the life of the platform.

According to Johnston, BNZ also managed to reduce its front-end power consumption by nearly 40 per cent.

“This means we are well and truly on our way to becoming carbon neutral by 2010.”

The bank also recorded a 33 per cent reduction in heat output and a 39 per cent reduction in carbon dioxide emissions for its front-end systems.

The new virtualised platform has also boosted the speed of new deployments. Instead of taking days, a new environment can be deployed in just minutes. With just one administrator needed per 100 virtual servers, BNZ is saving on resources used to manage the platform.

The banks’ move to Red Hat Enterprise Linux has attracted plenty of attention, with a number of banking counterpoints monitoring BNZ’s performance benchmarks with interest.

“There are a lot of reasons to consolidate with Red Hat on the mainframe and as we were the first in New Zealand to do it, this has attracted a lot of interest from the banking world,” says Johnston.

©CIO New Zealand

Fairfax Business Group

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Tags strategyopen sourcevirtualisationfinanceconsolidationGreen technologyeconomic crisis

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