First, a few background facts: SMC has an annual spend budget of around $2 billion to service the needs of 900,000 people. The IT budget within that is $70 million which covers both operating costs and projects. A handy chunk of change you might think until you realize that it is around 3.5% of what in business we would call revenue.
SMC uses a hybrid cost model it uses to recharge its costs which can be compared to the cell phone business. There’s a basic subscriber cost for each user to be on the network and everything else becomes an incremental cost. Walton believes that management is very forward thinking. "We have an agile workforce and yes, there are some traditional civil servants. About 25% of my workforce is now contracted. We will double or triple project staff as we transition to more value add."
When Walton was appointed, virtualization was one of the big areas where the team saw opportunities. They had 500 servers at the time but with data needs growing, they would have easily ended up with around 700 servers even with virtualization. "The cost of storage using the reference architecture we had at the time and likely growing storage requirements left us uncomfortable. There was also a desktop risk we needed to address."
The desktop risk came in two parts:
- Initial investment - how many to adopt and build and stay ahead? SMC saw they would end up over buying which was a huge capex spend it was uncomfortable committing to.
- Chicken and egg, Users were divided about persistent and non-persistent desktops. All users wanted persistence but there was a real need for more than a single image. At that point, it looked like going virtual could cost more than buying PCs.
On storage, they found that using Nutanix they could buy a block of storage at a time. "We liked that we could add blocks on an as needed basis but we were a little concerned. They were new at the time but all their promises turned out to be correct. From our standpoint, the Nutanix solution is easy to manage and scale out and it doesn’t consume much power. Right now it is only consuming 30% from that which we predicted if we had remained on the course we were on at the time."
For the desktop, SMC chose to go with Unidesk's management solution for VDI. "We could keep the management of the desktop simple enough and keep the desktop support staff. This was an alternative to managing and synching 60 or more systems. The complexity was too much. People can grab apps they want and virtualize. That reduced our risk."
Those benefits may seem good enough but Walton was able to make additional savings IT was then able to pass back to the various operational units within SMC. "We shifted support from high priced network engineers and dropped the support price from $45 per desktop per month to $35." On soft costs, Walton reports that procurement takes under 30 days and not the 90 days he had anticipated. "As you might imagine, we can be a lot more proactive and that means we have happier internal customers."
One of the risks with taking on these new classes of solution is that they do not have a well established track record. This was something that concerned the storage server management personnel who were far from convinced. "He didn't think it would work. Today - he is a very happy guy," says Walton.
We often see waste and profligacy in the public sector. This example indicates that by applying hard nosed principles drawn from the business world, it is possible to deliver significant benefits within a public sector context.
This is only the start. SMC is renovating its applications landscape and guess what - HR, which is one of its most important areas of management is going to the cloud. More on that at a later date. All I can say is that Walton is quietly confident.
Aside from these moves, it is interesting to see SMC making use of readily available open source CMS systems like Drupal as its citizen facing window to the world and with clear references to open data.