Running the nation’s largest freight railroad requires sophisticated technology. Union Pacific wanted to expand the use of virtualization to curb physical server growth and better meet business needs. The railroad had deployed VMware virtualization technology in its data center to reduce server sprawl but decided to switch to the Windows Server 2008 R2 Datacenter Hyper-V technology to provide a more familiar tool for Windows-trained staff. By using Hyper-V, Union Pacific has been able to extend virtualization to production workloads and aims to virtualize more than 50 percent of its 1,000 Windows-based servers, saving thousands of dollars in the process. The IT staff can more easily manage Hyper-V host servers and ensure higher performance and availability. By meeting new server requests with Hyper-V, the IT staff can respond more quickly to business needs.

Situation
Union Pacific operates a major North American railroad franchise, covering 23 states in the western two-thirds of the United States. This Fortune 500 company links every major West Coast and Gulf Coast port and provides service to the east through its four major gateways in Chicago, St. Louis, Memphis, and New Orleans. Union Pacific has one of the most diversified freight portfolios in the industry, carrying chemicals, coal, food, forest products, grain, metals, minerals, automobiles, and more for 25,000 customers. Union Pacific is headquartered in Omaha, Nebraska, has 45,000 employees, and posted 2009 revenues of more than U.S.$14 billion.

Customer service is critical to Union Pacific’s success, and the railroad has achieved record levels of customer satisfaction during the past year. The company’s IT organization stepped up its efforts to meet business needs to facilitate increased customer service expectations, but with demand for IT services gaining steam, it was a tough job. “Our IT requests were growing steadily, even during the down economy. We are continually asked to do more with no increase in resources,” explains David Schmitz, Senior Manager of the Windows Server Group in the Union Pacific IT organization. “Now that the economy is turning around, we’re getting even more requests for more servers, applications, and IT resources.”

We would not have been able to proceed as aggressively with virtualizing our Windows production workloads without the move to Hyper-V. Alan Fisher General Director, Distributed Systems Engineering, Windows Server Group, Union Pacific

By 2008, the company’s main data center in Omaha was filling up and could not handle the current rate of growth indefinitely. At that time, Union Pacific had approximately 2,500 servers, nearly 1,000 of which were running the Windows operating system. The company’s “one application per server” deployment model had resulted in a proliferation of servers, with many of the servers’ resources barely utilized.

Union Pacific had been an early adopter of virtualization technology, deploying VMware virtualization software in 2004 for running test and development servers. However, because VMware was written on a Linux kernel and ran on Linux-based servers, the company’s Windows Server Group could not optimize the Windows-based virtual machines or troubleshoot problems without routing requests through other support groups. “We didn’t have root access to the VMware servers, so whenever we had a performance or hardware problem, we had to get other teams involved, which took time,” says Roger McCord, Team Lead in the Union Pacific Windows Server Group.

Union Pacific knew that to make inroads on server proliferation, and also to better meet the demands of business users who wanted new IT servers and services quickly, it needed to extend virtualization beyond test and development to production Windows-based workloads. However, the Windows team needed a virtualization technology that was more familiar and accessible.

Solution
In 2005, the company deployed Microsoft Virtual Server 2005, an early Microsoft virtualization application. Union Pacific virtualized many of its infrastructure applications, including Windows Terminal Server, web servers, database servers, and several third-party applications.

In 2008, the Windows Server Group decided to standardize on Windows Server 2008 Hyper-V virtualization technology for all of its virtualization needs. “The fact that Windows Server 2008 integrated the hypervisor into the operating system really brought the cost down, and we could not ignore the cost benefits of that,” Schmitz says. “We also liked the tight linkage between Hyper-V and the Microsoft System Center tools, which we use to manage the Windows side of our data center. Also, Microsoft had a solid feature road map planned for Hyper-V.”

Union Pacific worked with BT, a Microsoft Gold Certified Partner, to incorporate industry best practices and document the implementation and migration process.

Created 380 Virtual Machines on 40 Host Servers
Union Pacific started by deploying Windows Server 2008 Datacenter on 25 host servers—the 15 servers that were running Virtual Server 2005 plus 10 new ones. The first step was to migrate virtual machines from Virtual Server 2005 to Hyper-V using Microsoft System Center Virtual Machine Manager 2008, a quick and easy process. System Center Virtual Machine Manager includes physical-to-virtual migration templates and tools to make short work of creating virtual machines and migrating workloads.

In 2009, Union Pacific purchased three additional host servers and began migrating test and development servers from VMware to Hyper-V. At that time, the company also upgraded to Windows Server 2008 R2 Datacenter, which provided live migration, high availability, and management enhancements. The Windows team also upgraded to System Center Virtual Machine Manager 2008 R2 and used it to migrate VMware virtual machines to Hyper-V. “For the period when we had virtual machines running under both VMware and Hyper-V, it was nice to have one tool to manage all our virtual Windows servers,” McCord says.

We saved significantly on the 380 virtual machines that we have created so far. We will virtualize another 10 to 20 percent of our environment over the next two years. David Schmitz Senior Manager, Windows Server Group, Union Pacific

By late 2009, Union Pacific had created 380 virtual machines on 40 Hyper-V host servers (Dell PowerEdge R905 and 6950 servers powered by Quad-Core and Six-Core AMD Opteron processors). “We are replacing really large servers that take up half a rack with more powerful blade servers that take up a third of the space and pack 16 servers in the space previously consumed by one,” Schmitz says. The company’s Hyper-V virtual machine density averages 12:1 (12 virtual machines on one physical host server), although some development and test hosts contain up to 50 virtual machines per host. Plans are in place to have production Hyper-V virtual machine density in excess of 40:1.

The company has virtualized a number of production Windows workloads, including BlackBerry Enterprise Servers, IBM Lotus Notes Domino, and about 150 databases running Microsoft SQL Server data management software. The company plans to run all 150 SQL Server databases on two clustered Hyper-V hosts.

The Windows Server Group staff uses the live migration feature in Windows Server 2008 R2 Datacenter to apply security updates to the host servers, mitigate many server hardware failures, and perform load balancing between clustered hosts. With live migration, an administrator can move a running virtual machine or application between different physical machines without disrupting the application service. By using Hyper-V support for clustering, Union Pacific is able to move workloads between host servers to perform routine maintenance chores and improve business continuity.

Optimized Server Management
In addition to using System Center Virtual Machine Manager, Union Pacific uses Microsoft System Center Operations Manager 2007 R2 to monitor both physical and virtual servers and applications and to issue alerts when performance thresholds dip below predetermined levels. It also uses Microsoft System Center Configuration Manager 2007 R2 to apply security updates to all host servers and obtain automated inventories of all the software running on both physical and virtual servers.

Union Pacific licensed its System Center tools by using the Microsoft System Center Server Management Suite Datacenter license, which provides an easy and economical way to get server management licenses for the primary System Center products. This license provides rights to manage unlimited virtual operating system environments plus the physical operating system environment.

Benefits
By switching to Windows Server 2008 R2 Datacenter Hyper-V technology, Union Pacific has been able to virtualize production workloads and extend server consolidation efficiencies. The company expects to virtualize 50 percent of its Windows-based server estate by mid-2011, netting great hardware savings. Because it can manage Hyper-V virtual machines without going through multiple

Today, we can meet many of our server requests significantly faster. This makes us look better as a service team and ultimately helps Union Pacific be more competitive, responsive to customers, and successful. Roger McCord Team Lead, Windows Server Group, Union Pacific

support channels, the Windows Server Group can more proactively optimize and troubleshoot the virtualized Windows environment, providing better performance to users and making better use of IT resources. With a “virtual first” deployment strategy going forward, the IT staff can deliver servers, and IT services, faster than ever before.

Faster Virtualization of Production Servers
Management has tasked the Windows team with virtualizing 50 percent of all Windows-based servers. “We would not have been able to proceed as aggressively with virtualizing our Windows production workloads without the move to Hyper-V,” says Alan Fisher, General Director of Distributed Systems Engineering in the Windows Server Group at Union Pacific. “Today, when business people request servers, we deploy virtual servers unless requirements indicate the need for a physical server.”

Significant Hardware Savings
Union Pacific saves over 60 percent on hardware costs every time it creates a virtual rather than a physical server. “Even though we had to buy 40 larger host servers, we saved significantly on the 380 virtual machines that we have created so far,” Schmitz says. “We will virtualize another 10 to 20 percent of our environment over the next two years, increasing our ability to better meet business needs while realizing additional cost savings.”

As a side benefit, the server virtualization effort has also been a key contributor to paring the company’s data center energy costs, which are down 10 percent in 2010.

Easier Server Management and Optimization
Managing the Windows-based virtual environment is much easier now that the Windows Server Group has direct access to the Hyper-V host servers. “We no longer have to involve other support groups in resolving Windows server issues,” McCord says. “We know Windows and can fix issues ourselves and do it faster. We’re way more efficient and can address performance problems in minutes instead of hours and, by using System Center, can often proactively make adjustments before performance problems occur.”

Schmitz adds, “We are able to manage a growing virtual Windows environment with no increase in staff. This is due both to our Windows Server expertise on staff and the great System Center tools.”

Increased Availability and Server Utilization
Union Pacific has also been able to improve the overall reliability and availability of its Windows-based servers by taking advantage of Hyper-V cluster support and the Windows Server 2008 R2 live migration feature. “Hyper-V cluster support and live migration have absolutely given us more redundancy and less outage during upgrades and maintenance,” McCord says. “We can promise our business users that no planned physical-server outage will take their applications down. It’s a big selling point.”

Union Pacific also is much better able to utilize its server investments. Server utilization previously languished in the single digits; today, it is 20 to 40 percent.

Prompter Response to Business Needs
With production Windows workloads running in a virtual environment, Union Pacific is able to meet business users’ requests for more IT services. “It can take six weeks to get a physical server ordered and up and running,” McCord says. “Today, we can meet many of our server requests significantly faster. This makes us look better as a service team and ultimately helps Union Pacific be more competitive, responsive to customers, and successful.”

Microsoft virtualization
Microsoft virtualization is an end-to-end strategy that can profoundly affect nearly every aspect of the IT infrastructure management life cycle. It can drive greater efficiencies, flexibility, and cost effectiveness throughout your organization. From accelerating application deployments; to ensuring systems, applications, and data are always available; to taking the hassle out of rebuilding and shutting down servers and desktops for testing and development; to reducing risk, slashing costs, and improving the agility of your entire environment—virtualization has the power to transform your infrastructure, from the data center to the desktop.

For more information about Microsoft virtualization solutions, go to:
www.microsoft.com/virtualization

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For more information about Union Pacific products and services, call (888) 870-8777 or visit the website at:
www.up.com