Outsourcing provider transforms business model

Italian ICT company Almaviva TSF adopts Cisco Data Center Business Advantage vision to create new, on-demand cloud services.

CHALLENGE

Almaviva TSF is one of the leading providers of ICT services to the transport and logistics industries in Italy, its biggest customer is the Italian State Railways Group . Almaviva TSF's goal was to build on a period of strong growth, widening its service portfolio to gain more market share.

"We believed that the time was right to change from a hosted service delivery model to pay-per-use," says Francesco Barbieri, Manager of Data Center Operations at Almaviva TSF. "This would enable us to lower our CapEx and OpEx, and sell new services at competitive prices to customers in a broader range of industries."  

To achieve all this, the company would have to adopt a new business model and transform its IT infrastructure from a cost center into a revenue generator. Almaviva TSF had built up five separate data centers, each dedicated to a customer portfolio or a major application such as railway ticketing. The silos needed large amounts of space, consumed huge quantities of power, and were costly and time-consuming to manage. Almaviva TSF would continue buying more devices until a data center was full and then open a new facility, which increased complexity and costs.

The company envisaged a virtualized data center where resources could be allocated to projects from a consolidated 'pool' in a flexible and scalable manner. This would enable Almaviva TSF to offer customers more competitive pricing, faster deployment, and new service options.

SOLUTION

Almaviva TSF developed a data center model based on a large, powerful core linked to smaller pods (pools of devices). Almaviva TSF's design was based on the ability to unify storage, computing, and networking capabilities in these pods and provide an integrated, consistent interface-abilities that are inherent to Cisco Data Center Business Advantage.

Almaviva TSF decided to base the architecture of its new network on the Cisco Nexus family of data center solutions, including:

• Cisco Nexus 7010 ultra-fast switches and Cisco MDS 9000 SAN switches in the network core which provide 10 Gigabit Ethernet and 8 Gigabit fiber channel connectivity to the access layer
• Cisco Nexus 5000 switches with Fiber Channel over Ethernet (FCoE)
• Cisco Nexus 2000 Series Fabric Extenders
• Cisco Nexus 1000V virtual switches with VMware vSphere integration.

The access layer is made up of standard, replicable pods which can be located in every room in the data center. Almaviva TSF built three types of pod, one of which is based on the Cisco Unified Computing System^TM and also includes the VMware vSphere virtualization platform.

The Cisco team worked closely with Almaviva TSF to help the company develop its data center vision and architecture, and then deploy the solutions that would realize the vision. The Cisco Services organization became involved at the deployment phase, providing assistance through its Advanced Services portfolio.

RESULTS

Building a completely different type of data center has enabled Almaviva TSF to achieve its objective of changing its business model. The company has developed a brand new portfolio, based on selling Infrastructure as a Service (IaaS), which includes services such as Internet connectivity, storage, archiving and back-up, and virtual computing power. Almaviva TSF has identified a strong demand in the enterprise and medium-sized business markets and expects revenues from the new services to reach 2-3 percent of total revenues and 20-28 percent of current revenues from infrastructure services.

Almaviva TSF has structured its pay-per-use model for maximum simplicity, convenience, and flexibility. It gives customers several different options on pricing, configuration, and capacity; for example, there are six tiers of storage services graded by cost and performance. Almaviva TSF does not charge set-up costs; instead each service is built around a monthly fee, and customers pay nothing further as soon as their service is terminated.

Combined with real-time provisioning, this transparent cost structure makes the service model very attractive to customers whose requirements are short-term, unscheduled, or difficult to predict, and to any companies that do not wish to purchase equipment for whatever reason.

Almaviva TSF benefits from the new model as much as its customers. Having invested in a scalable and agile architecture, the company is now in a position to grow its business at minimal extra costs. In addition to reducing CapEx in the long-term, Almaviva TSF has significantly lowered its OpEx from day one. For example:

• Power consumption has fallen by about 60 percent
• Cabling costs have dropped by about 70 percent
• The total cost for provisioning a new server has fallen by about 25 percent.

NEXT STEPS

Almaviva TSF will continue to develop its business and its infrastructure in parallel, starting with a massive project to virtualize 70-75 percent of the company's servers. The company also plans to address automation, first in its data center operations to help manage 3000 servers and then to offer customers automated, self-service provisioning of non-custom services.

At the same time, Almaviva TSF is moving further into cloud computing by developing a Platform as a Service (PaaS) offering based on access to a shared database cluster. The company is likely to take a similar approach with middleware, developing services targeted at several industries as part of its PaaS portfolio. In the field of Software as a Service (SaaS), Almaviva TSF will probably focus on applications for transport and logistics, its core area of expertise.

"There is a huge market for cloud computing services from companies that do not want to manage their own IT infrastructures. We are one of the first companies in Italy to address this type of market, using an extremely scalable and agile infrastructure that adapts easily and quickly to the needs of many customers," says Barbieri.