Cigna goes virtual

Computerworld - It was obvious as 2002 drew to a close that Cigna Corp. would have to cut costs. Sales at the Philadelphia-based health insurance benefits company had risen for the year, to $19 billion, but earnings had plunged from $1 billion a year earlier to a loss of almost $400 million.

For Cigna's IT organization, one area for savings stood out. The company had more than 3,000 servers and was bringing in new ones by the dozen, but server utilization was inefficient. "If you had a new application project, you got your own boxes, bought your own servers and put in your own software," says Cigna Chief Technology Officer Marcus Shipley. "Everything, all the way up the applications stack, was a one-off just for you, and boxes would run at 10% to 15% utilization."

The way to get more out of its servers, Cigna realized, was by virtualizing them—enabling a single server to run multiple operating systems, applications or versions of an application—and by enabling dynamic load balancing of those applications across server farms. Cigna hoped virtualization would reduce the number of its file-and-print, database, application and Web servers by 25%.

But the company's multifaceted virtualization program became much more than a simple server consolidation project. It included aggressive operating system upgrades; moves to new hardware, including 64-bit processors, blade servers and storage-area networks; and, most important, adoption of nascent virtualization software from IBM and Microsoft Corp. "It's based on the 'on-demand' concept of IBM, or concepts of grid computing," says Benjamin Flock, Cigna's vice president for application frameworks and virtualization. "It's the separation of the application and the hosting service. So I've got an application, and as long as I have a service level defined and I manage that service level, it should be transparent where it runs." Flock says Cigna is on track to reach the goal of a 25% reduction in server operating expenses by year's end, and he expects additional savings in subsequent years.

Insurance companies aren't known for pushing the edge of the IT envelope, and until 2003 Cigna was no exception. Then the pressure to cut costs and the tremendous promise of several emerging technologies propelled the company into beta, alpha and even prealpha pilot projects with IBM, Microsoft and Intel Corp. "We tend to be on the trailing side, but now, with these activities, we've been on the leading edge," Flock says.

Microsoft Migration

In 2002, Cigna's systems built around Microsoft products were "in disarray," says Chris Cox, an enterprise architect. "We had two versions of Visual Basic that people were developing with, different versions of data access components, different versions of database technologies. Since everybody had their own machines, they just used what they were accustomed to using. And the production environment had every possible combination."