Cigna goes virtual

Its cutting-edge virtual server deployment is on track to cut server operating costs by 25%

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."

So early last year, Cigna kicked off an aggressive migration to Microsoft Windows Server 2003. That project began even before the final version of the operating system was released. Cigna signed on to Microsoft's Rapid Adoption Program and in the process reduced its internal server certification time from 12 months to just 90 days.

Windows Server 2003 brings application partitioning and isolation capabilities to the .Net Framework development and management tools, allowing Cigna to run several similar applications concurrently on a single server. Its COM+ feature isolates versions of a component so they can run simultaneously on one server, and it allows Cigna to install multiple applications or versions on the same server without having to upgrade each one and then test it for the new environment. It also enables Web application "pooling," via Internet Information Services 6, for running multiple Web applications independently.

Earlier, six or more servers might be dedicated to a small application—one each for development, unit testing, system testing, end-user acceptance testing, preproduction and production. With partitioning, many of those functions can be performed on a single server. "Our entire server environment will be built out to Windows Server 2003 by the end of the year. That's a big deal," Flock says.

In a second major thrust, early this year Cigna joined Microsoft's Joint Development Program for Virtual Server 2005. That product takes a software approach to partitioning that, with Windows Server 2003, will let Cigna run multiple instances of the operating system simultaneously on one machine. "It allows us to split the hardware into logical partitions like we do on the mainframe," explains Larry Brandolph, enterprise technical architect at Cigna. "You get a base OS, then Virtual Server on top of that, and three, four or five 'guest machines' on top of that."

Cigna is testing a beta version of Virtual Server 2005 and is using an alpha version of the Virtual Server Migration Toolkit to migrate its applications to virtual machines. Microsoft says it will ship both products later this year.

Extending WebSphere

In parallel with its Microsoft migration, Cigna began an aggressive move from IBM's WebSphere Application Server 3 to Version 5. "We decided to go direct to Version 5 because of its clustering and centralized deployment and its better isolation and management of applications in a shared services model," Flock explains.

And early last year, Cigna began working with IBM in its High Performance On Demand Solutions lab to help define requirements for software code-named Cayuga. Now a beta product called WebSphere Extended Deployment (XD), it can partition jobs across multiple processors, databases and application servers.

Cigna is now using XD in a proof-of-concept test. The company hopes it will provide utilitylike compute cycles on demand so that every server doesn't have to be configured to handle peak loads.

As head of systems testing and quality control, Gerald McDonald is instrumental in proving out the new virtualization concepts at Cigna. But as the owner of 900 servers, he also wears a user hat. Some 300 of his Windows 2000 and Windows NT servers would have to be replaced in the coming year at a "refresh" cost of almost $9 million, he says. Now, with better utilization of his 600 other servers, he will have to buy far fewer replacements. "Up until the virtualization, we've never had any alternative but to replace those machines," McDonald says.

The Next Big Thing

Now on track to meet its server consolidation goals, Cigna is laying plans for the next big phase, in which it will augment the shared services capabilities in WebSphere 5, Windows Server 2003 and Virtual Server 2005 with new technologies for dynamic provisioning and on-demand computing. Cigna is looking hard at IBM's Tivoli Intelligent Orchestrator (TIO) and Microsoft's Dynamic Systems Initiative (DSI), both of which promise to "virtualize the data center," as Flock puts it. The idea is to make all servers available to all applications, with excess capacity anywhere acting as a buffer against unexpected demand peaks.

TIO, for example, would sit on top of all Cigna systems—mainframe, midrange and distributed, both IBM and non-IBM—spanning multiple boxes and subsystems. It would monitor the efficiency of the network and constantly balance the workload by sending peak workloads to underused hardware and software.

As for DSI, "Microsoft has not evolved that into a product strategy yet, but since we have worked very closely with Microsoft and done a lot of work applying Virtual Server, Windows Server 2003 and .Net technology to build out shared capabilities, we'll probably be one of the early adopters in that space," Flock says.

Corey Ferengul, an analyst at Meta Group Inc. in Stamford, Conn., says Cigna is a virtualization pioneer. "Most organizations in the next three to five years will be using virtualization in some major part of their organization," he says. "Most are deploying it in test and QA environments, and it's just beginning to make its way into production environments."

But there are risks for early adopters. "The biggest fear is that as you layer on different virtualization technologies, there are no clear interfaces between them. Management of the physical layer is pretty much figured out, but the virtual layer is still black magic," says Ferengul. "They need to think very carefully about how to do root-cause analysis, change management and so on."

Cigna's Shipley says IT initiatives usually focus on either "infrastructure efficiency" or "business solution effectiveness," but not both. Cigna is trying to address both objectives at once in its virtualization program, he says. Vendors like IBM and Microsoft are helping by integrating their application development and system management offerings, he adds.

Still, Shipley says he worries about his ability to integrate systems management software, such as the tools from IBM Tivoli, with software in the WebSphere and .Net application suites. "I know when a server is down, and I can have an engineer respond to that," he says. "But that engineer doesn't know that the server is part of your most critical business process. If I can instrument the business process, and I know that claims processing is down, now I can make a real good decision. You've got to move beyond just instrumenting the box."

Cigna's new software can do that, and Shipley is likely to get more help from XD and TIO. XD can give processing priority to WebSphere applications based on their designated importance or the priority of classes of users. And TIO can do the same things across all applications in the enterprise.

Shipley offers this advice to someone embarking on a big virtualization project: "Look for integrated product offerings, look for good vendor partnerships, and don't be bashful about giving them your requirements. Definitely don't try to roll it yourself."


Cigna's Server Virtualization Project

OBJECTIVE: Use virtualization technology to increase efficiency and reduce pool of 3,000 servers, running at just 10% utilization, by 25%.

CHALLENGES: Required executing multiple hardware and software projects in parallel and pioneering the use of new software in production systems.

PAYOFF: Lower cost from better server utilization, faster certification of new products and systems, and greater standardization of IT across the company.

Copyright © 2004 IDG Communications, Inc.

Shop Tech Products at Amazon