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Power plant and rail infrastructure builder Alstom may not be a household name, but plenty of households rely on its products: indeed, 20% of the world’s electricity is generated using Alstom equipment.

Supporting that global penetration is an IT organisation that operates as a service provider to all internal business units, offering them a set catalogue of services, each with its own pre-determined price tag. As Alstom’s director of technology in Northern Europe, Rob Jones, explains, that structure is designed to make IT costs as transparent, as manageable and, most  importantly, as low as possible.

The IT department at Alstrom is bound by strict service level agreements (SLA’s) that are defined in clear business terms. This places the focus of operations at Alstom’s 16 data centres around the world squarely on delivering core business applications.

A critical component in that approach has been the use of virtualisation technology sourced from EMC’s VMware subsidiary, which allows applications – principally SAP, Oracle and Siebel – to span different hardware units and which enable data centre managers to allocate spare capacity when and where it is needed the most.

“Data centre managers have traditionally struggled to provide flexibility and scalability,” explains Jones. But through the use of virtualisation technology in the data centres, the company can now cope with peaks of computing resource demand with ease, he says. “When our financial reports come out, for example, the traffic on our website will shoot up. With virtualisation, we can scale the website as we need to, and no longer need to predict traffic patterns way in advance.”

The paybacks have been anything but virtual. Virtualisation, which is run over IBM p570 servers, has cut data centre service costs by 20%, says Jones, and the data centres now have 40% spare capacity for expansion even though the demand for services has increased.

But shifting to a virtual application platform was not without its challenges. Indeed, many of the applications showed an initial reduction in performance when switched to the new, more flexible environment. In a virtual world, “you need to find the right level of tuning to get the application speed you require,” says Jones.

And that comes down to the way applications are put together. “Not all applications have been built to be robust when run across multiple servers,” he says. “We are still coming to terms with what kind of applications we can and can’t move to a virtual platform. Not all independent software vendors can provide that capability yet.”

Moreover, the software companies are still unsure of how they should price licences when their applications are spread across multiple processors. “Licence costs are extremely variable in this paradigm,” says Jones.

Notwithstanding such teething problems, Alstom’s business units have reacted positively to the virtualised data centre strategy. Seeing prices in the catalogue of services drop, business users have become keen to consume more IT services in this same way. The virtualisation project, says Jones, was “scaled as a community,” and now every department relies on virtualised applications in one form or another.

The next phase in Alstom’s data centre modernisation is to invest in the automation of provisioning. Currently, while re-allocating computational resources is simpler than ever, it is still a manual process. Jones believes that automating the allocation of processing power will drive further cost efficiencies in the data centre.