The economic crisis in Europe is forcing Allianz Global Investors of America to reconsider its data center consolidation strategy. Daniel Stroot, CIO of Allianz, says the company considered opening two data centers in Europe and two in Asia, in addition to the two it maintains in the U.S., but is now planning to add just one more. “We had planned to have two in each region but now we’re thinking maybe we only need three globally,” Stroot told CIO Journal in an interview. “The crisis in Europe has continued to force us to look at being more efficient.”
At this point, the company no longer owns its own data centers, having in 2011 consolidated five data centers down to two private clouds operated by data center service provider IO. The original reasons for consolidation were as much circumstantial as a reaction to other changes in technology, namely software-as-a-service. The company was moving two of its offices into new buildings in New York and San Francisco that either wouldn’t support a data center, or where running a data center represented too great a cost from a power and cooling perspective. The new offices were “the trigger event to rethink what we’re doing and get out of the business” of maintaining data centers in-house, Stroot said.
The other factor driving this change was that the company had moved so many applications formerly managed internally to public cloud vendors such as Salesforce.com and SuccessFactors that its internal storage and processing needs had diminished. Moreover, Stroot no longer wanted to be in the business of managing data center infrastructure, and was attracted by the fact that costs could come down as he moves more applications to the cloud. “It was the strategic thing to do, and it also saves money,” Stroot said.
The private clouds leased by Allianz are located in Phoenix and Edison, N.J., where IO has recently opened a modular data center comprised of units a bit bigger than a standard shipping container. Stroot said the modularity was particularly attractive because it allows Allianz to dictate what equipment is used to manage its data, ensure that only authorized people can enter the module (which provides an extra layer of physical security), and even allows the company to move the entire module from one location to another. “Because it’s self-contained, if we had room inside a parking structure [at a new Allianz location], we could drop a module in a parking structure,” Said Stroot.
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According to the terms of the agreement, Allianz is charged based on power consumption, and after three years can see its costs reduced if it ends up using less power as it moves more applications to the cloud.
The company’s decision to use public cloud vendors for certain very time-sensitive applications, such as trading and settlement, while continuing to run less time-sensitive applications in the new data centers, also allowed Stroot to focus on leasing those data centers in different geographic regions. Spreading the data centers across the world provides greater assurance of disaster recovery than having them grouped close together, but would have created latency issues for time-sensitive applications such as delays between orders and fulfillment. “We couldn’t afford to lose any time when we were running trading in-house,” says Stroot. The applications Allianz still runs in the private cloud units, such as portfolio analytics and risk management, can be located around the globe. “Now we’re thinking about having fail-over capabilities between Phoenix and Frankfurt,” he said.