Tax office aims for virtualised data centre

The Australian Tax Office aims to virtualise 70 per cent of the servers in its data centre by the end of 2010.

Speaking at the Data Centre Summit in Melbourne, ATO Strategy and Architecture infrastructure manager Ross Smith said the tax office had mandated that all new applications be deployed on virtual machines, and had also set about porting existing applications across to the virtual environment.

Smith told delegates the ATO had identified 2500 existing servers to virtualise, but was taking a "crawl, walk, run" approach to the project.

"We've started with the less troublesome applications," Smith said. "Then we'll move to the more difficult ones. Siebel, for example, we let off the hook early. But there is [a] noose closing in on Siebel, on SQL, on SAP."

Smith said the ATO was about halfway through its server virtualisation journey, running 1000 virtual machines and 800 virtual desktops today.

The project was already yielding savings in terms of data centre footprint and power consumption. Smith estimated that the virtualisation of just 100 physical servers in late 2008 led to a two per cent decline in energy consumption and $42,000 in annual savings.

One of the main business drivers was the "self-service" nature of deploying applications on virtual machines, which allowed for far faster deployment of new services.  But the ATO has managed to achieve this flexibility while avoiding the oft-cited ugly side-effect - virtual machine sprawl.

"We don't have server sprawl problems because we introduced and stuck to an ITIL [Information Technology Infrastructure Library] process a long time ago," Smith said.

"It's not a free-for-all at the ATO and it never will be. Whether it's a virtual server or a physical one, nobody provisions it unless they have gone through those authorisation steps.

Read on to Page 2 for the challenges virtualisation presents in an outsourced environment.

Outsourcing challenges

The one big complication to the ATO's virtualisation project was that its IT infrastructure is managed by a third party.

The tax office's IT infrastructure is managed by EDS under a massive $2 billion, ten-year technology outsourcing deal, which was last week extended a further two years.

Smith said that no matter who the outsourced provider is, virtualisation presents several contractual challenges in an environment where IT infrastructure and services are outsourced.

The ideal for the virtualised data centre, Smith said, is to create an "elastic infrastructure" where new services can be deployed with relative ease and the infrastructure can 'self-manage'.

Using a technique known as Dynamic Resource Scheduling, virtualisation provides an opportunity to automate the means by which guests (applications) can be transferred between hosts (servers) according to loads on the systems.

The ability to manage resources in this fashion has "a profound effect on both the ordering and the managing of resources because a new function does not necessarily require new infrastructure," Smith said.

This presents a challenge to the outsourcer, he said, which needs to provide a price for the services it supplies. Traditionally the price model was based on a per-machine or per-employee basis.

But under a Dynamic Resource Scheduling model, it can be difficult to account for how many guests (virtual machines) will run on a given host server.

"We can't definitively say in advance, this piece of hardware will host this many guests," Smith said. "It's difficult to work out some price algorithm whereby you say, for example, there are twenty guests on every host, so divide the cost of the piece of hardware by twenty. It could be ten today, twenty tomorrow."

Smith said those negotiating outsourcing contracts have to consider more 'liquid' forms of pricing than today's fixed models.

The thinking that has dominated mid-range server computing needs to revert, he said, to how IT was managed during the age of the mainframe.

"What you need to do is measure how much memory and IO a given application uses in a given period of time," Smith said. "We're not used to that in the mid-range environment. We're used to saying, here is a box. But that is an outmoded way of pricing things.

"It might sound like a lot of work, but there are ways you can find out how much memory or IO an application is using. You can measure it."

Alan Bennett, government and defence industry leader for EDS Australia and New Zealand told iTnews the IT services giant "realises that the changing dynamics of the data centre require new, more flexible arrangements for both providers and clients."

"The recently-announced extension of EDS services to the Tax Office represents capabilities that will deliver a significant step towards this logical data centre direction and will achieve real benefits for both parties," he said.