The Itanium Solutions Blog

For the electricity industry in India, managing customers is all about power and availability.

Yes, handling the ever-increasing energy production and distribution demands in a rapidly growing economy is a challenge, indeed. Along with that, however, comes a sometimes less discussed but no less critical problem: how to handle the explosive growth in IT infrastructure to manage the growing volume and complexity of its customer base.

In Maharashtra, the country’s third largest state in area and home of its largest city (Mumbai), this problem is massive. The good news is that business is booming, with over 15% of the India’s industrial output produced in this region and the state boasting India’s highest per capital income as well.

Power consumption itself is putting major strains on the region in many ways, as demand currently exceeds supply on a regular basis, and management of customer issues is also growing at a staggering rate. But thanks to Itanium and HP, Maharashtra Electricity State Distribution Company Ltd. (MESDCL) has found a way to handle both current IT demands more effectively and to establish a system with built-in capacity for expansion.

Every month MESDCL handles 15 million customers and the expected growth rate is at least 500,000 new customers to be added every year. Its annual revenues are currently just under $5 billion (U.S.), and the company itself has over 75,000 employees. To support its substantial client base MESDCL had originally written its billing system in Cobol, a workable system for a time but with significant limitations on managing large data arrays.

As capacity demands began to build significantly in the 1990s, MESDC realized it needed to replace its older software solution with a more modern one based on Oracle, which it completed in 2000. Although that helped, as customer growth continued MESDC quickly realized the hardware part of the solution also badly needed upgrading.

As just one example, MESDCL’s existing PA-RISC system, even with the power of Oracle behind it, took as much as 24 hours just to process 10,000 bills. There were other issues as well, including the need to handle a unique photo-based approach to recording electrical meter readings, something that added even more data management problems and was completely unmanageable within the existing IT environment.

MESDCL needed a system with much faster overall response times, lower IT costs that would scale even more efficiently as customer demand grew, and dramatically improved productivity on a grand scale.

Their final solution, which involved a complete re-engineering of their IT infrastructure (including a new picture-processing capability for the photo-based meter readings), used 12 HP Integrity rx3600 servers and 10 HP Integrity rx6600 servers, all driven by dual-core Itanium microprocessors.

With this solution in place, MESDCL has seen its billing processing time for those 10,000 bills drop from 24 hours to only one hour. In addition, because of the increased processing speed, MESDCL was able to roll out its new photo-based meter reading systems for approximately half of its 15 million customers – in the first six months of system deployment.

The solution also offers a far more energy-efficient hardware environment than before, along with a less costly IT support environment as well. Both will provide MESDCL with the “power” to scale their mission-critical computing needs for many years to come.

With the economic problems around the world right now, you might wonder how that is affecting the IT industry — and the server market in particular. Would companies retrench and hold back on spending? The answer is that, with results counted from the first six months of an admittedly challenging 2008, the server business is apparently doing quite well. And Itanium fared well, too — with results that may suggest some of what is happening behind the scenes.

The results, which were summarized in a recent survey released by Gartner, Inc., include an interesting statistic: that worldwide server shipments in Q2 2008 were up 12.2 percent over the same quarter last year. Revenues were up as well, but by a smaller amount, 5.7%. This more-than-reasonable performance in a tough economic climate was driven by a combination of a “continued upswing in x86 server replacements” plus “Web center build outs” and growth in emerging markets.

That refers to the entire market, but how did Itanium fare in the same period? From one respect, raw shipments, not as well, with Gartner reporting that “RISC-Itanium Unix Servers” saw a 7.9 percent drop from the same quarter a year earlier. However, revenues for this server category were growing at a rate of 9.4%. As Jeffrey Hewitt, research vice-president of Gartner said, this indicated “that higher-end systems were the hardware platforms that drove sales in this space.”

One conclusion behind all this is that, even in a tough economy, IT executives continue to make the decision to upgrade their systems to increase productivity through performance improvements, higher availability and lower cost-of-ownership. Good tactics, under the circumstances.

The investment in higher-end Itanium systems at a considerably higher rate than in previous years suggests a more strategic move is also taking place as well. With major enhancements introduced for Itanium this year with emphasis on Virtualization, plus a number of developments that make Itanium-based server solutions more dynamically configurable on the fly, my guess is that you are also seeing an increased rate of server consolidation for companies that can afford to do so. All of which positions those companies even better when the overall economy begins its upswing, hopefully sometime in the near future.

Not a bad strategy, and the revenues are high enough to suggest that far more than just a few good companies are making this change. It is something for all IT organizations out there to consider as the economy continues to navigate the current doldrums and charts a course for a stronger recovery path ahead.

So stay tuned. My guess is that data for the third quarter will show even more of this trend.