Lakeland Dairies reduces TCO

12 Mar 2010

Virtualisation moves IT from cost centre to value contributor.

Successful implementation of virtualisation and the achievement of anticipated benefits are dependent on matching an organisation’s goals and inherent strengths with available technologies.

The melding of these components requires an experienced partner that has a comprehensive understanding of their client’s needs and strengths and an understanding of the technology deliverables. In this case study we show how Lakeland Dairies achieved the “perfect match” by building on their inherent key strengths combined with realistic objectives and flexible Microsoft technologies that enabled major improvements in their IT infrastructure, substantial improvements in TCO and IT simplification.


Lakeland Dairies is a food and beverage co-operative that processes about 1 billion litres of quality milk annually into a range of value-added dairy food service products and functional food ingredients. It is the second-largest dairy co-operative in Ireland with a turnover of €435 million in 2008. Its main area of operation is in the northern half of the island of Ireland with operations in the UK and the US. Complex systems include full traceability from the farm gate to the ultimate consumer. 

Lakeland Dairies grew out of amalgamations and acquisitions that involved the unification of geographically dispersed organisations. In the IT data centre, the number of servers grew to 35, each requiring manual management and tasks. There were too many servers and storage devices that could not be efficiently managed. Microsoft partner Origina, in a pre-implementation audit, established that server CPU utilisation for 21 servers was 11pc and memory utilisation for these servers was relatively low at 27pc.

Tape-based disaster recovery (DR) required careful and costly management. The RTO (Recovery Time Objective) took up to five days and RPO (Recovery Point Objective) was between 12 and 24 hours. DR was usually an intensive management process that involved days and data storage was dispersed across a broad range of devices. Apart from server power consumption, cooling required even more power.

Like many large organisations’ IT departments, Lakeland Dairies’ IT was viewed as a cost centre. Turlough Farrelly, Lakeland Dairies IT manager, and his team established that a technical refresh was required to provide a more effective cost base that would turn the IT infrastructure from a cost centre into a value contributor. A virtualised IT infrastructure would be capable of providing new services, responding more quickly to commercial requirements and would be a business enabler for Lakeland Dairies.

The more complex a system becomes the more costly it is to maintain and the corollary is that system simplification simplifies management requirements and reduces costs. A key objective for Lakeland Dairies was the simplification of IT operations and management with the aim of deploying IT personnel in more commercially productive areas.


In 2008, Lakeland Dairies saw virtualisation as a way to simplify its IT environment and reduce server sprawl. The firm received several proposals that offered expensive solutions for live migration – that is, the ability to move applications across server platforms with minimal disruption.

In contrast, Microsoft’s Windows Server 2008 R2 has Hyper-V virtualisation built in, that provides live migration and management of physical and virtualised servers and multiple hypervisors. All of this can be tightly integrated with Microsoft System Centre Suite and is much more cost effective than other solutions in the marketplace.

The key driver for most industries today is competitiveness, efficiency and better deployment of resources. Rowan O’Donoghue, Origina development director, said, “It is very commonplace today for IT systems to be a hog on resources, with up to 80-90pc of IT time spent fire fighting or managing overly-complex IT infrastructures.” Origina understood the key issues that needed to be addressed to bring a high level of value to the project.

Lakeland Dairies had built up a significant level of expertise in Microsoft products and server platforms that was easily transferable to the newer Microsoft platforms. It also became apparent that switching to other competing platforms would have required significant staff retraining with its associated learning curve and additional costs.

About Windows Server 2008 R2 version of Hyper-V

The Windows Server 2008 R2 version of Hyper-V has been significantly improved with additional features, including direct communication with the processors and the ability to support Live Migration. Microsoft’s System Centre Suite includes four main tools – Data Protection Manager (backup and DR), Virtual Machine Manager (provisioning hardware and workload), Configuration Manager (patching etcetera) and Operations Manager (monitoring performance). Compared to its competitors, Microsoft’s combined offerings cost much less and support management features, such as multi hypervisors, application and physical management that are not available in competitors’ products.

The combination of these technologies with the deployment of high availability clustering enables Lakeland Dairies to avail of immediate local failover to protect against equipment failure. Remote failover is provided by Compellent SAN that replicates boot images via IP over a 10mb VLan to the DR systems. Compellent has close ties with Microsoft and supports the movement of blocks of data based on its business access-patterns onto the appropriate storage-tier. The Compellent system only requires about three hours of management per week.

The hardware solution consists of three powerful 3850 IBM servers, each with eight Quad-Core processors and 80 gigabytes of memory. Two of these servers are clustered at the main production site while the third at a remote site is powered down in a “hot wait state” with attached Compellent storage that is continually updated with replicated data from the main site.


Simplification and improved management

The reduction in the number of servers across the various locations to one main site and a backup site has reduced the amount of travel, expense and time required to maintain the servers. The management of the three servers has been improved significantly by using Microsoft Management Suite. Lakeland Dairies has achieved improved deployment of IT personnel as a result of reducing the level of fire fighting-enabling personnel to spend more time enhancing the productivity and delivery of applications software. 

Farrelly said, “The change of emphasis away from fire fighting has enabled Lakeland Dairies to become more agile and flexible, thus changing the role of the IT department from cost centre to enabler allowing Lakeland Dairies to improve its competitiveness”. The level of payments to specialists has been reduced and Lakeland Dairies has been able to progress the development of other applications, such as unified communications, data management and reducing bandwidth links.

Disaster recovery

Disaster recovery is critical for all organisations but particularly for medium- to large-enterprise organisations. Cost, accuracy and speed of recovery are critical components of successful data recovery and Lakeland Dairies has reduced recovery times from five days to less than two hours from their remote site with RPO and RTO times having been reduced to less than two hours for all Lakeland Dairies Intel-based systems. A financial saving of €40,000 per annum was achieved as a result of reduced dependency on third-party DR services.

Hardware reduction and improved storage

The improved utilisation of hardware assets, such as the reduction in the number of servers from 35 to three has lead to many quantifiable savings. Energy costs for the servers alone have been reduced by €6,670 per annum and power, heating and cooling costs have been reduced by 70pc. Rack space requirements have been reduced by 44pc. Reductions in power requirements have enabled carbon dioxide emissions to be reduced by 22.6 tonnes per annum in keeping with Lakeland Dairies’ policy to improve its green credentials.

Microsoft System Management Suite and Compellent SAN for managing storage have been key components in the success of this implementation. The systems have been developed to work together, thus simplifying the overall management of the complete server/storage environment. Compellent enables dynamic allocation of data storage resources, automatically directing data to the most appropriate device thus saving expenditure on expensive storage devices that have been replaced by low-cost SATA devices that will be used for growth. Compellent uses virtual blocks, ensuring high levels of efficiency between 80-90pc. Another key benefit is the ability of the SAN to interpret Powershell scripting which allows the automation of storage and server provisioning.

Reduced capital and running costs

The Microsoft solution consisting mainly of Windows Server 2008 R2, Hyper-V virtualisation and System Management Suite cost significantly less than alternatives to purchase and required less server footprint. The reduced server requirement and powerful management tools means that the running costs and skilled IT staff requirement was lower for the Microsoft solution.

Server provisioning

In contrast to the more traditional hardware replacement, the new virtualised environment enables the installation of new or a replacement server to be accelerated and simplified through the use of the Hyper-V, System Centre Suite and Compellent’s thin provisioning technology. Provisioning servers in a virtualised environment enables the time required to be substantially reduced.

Farrelly said, “Once the required specification has been given to the IT operations team, the virtualisation administrator can have a server up and running in a matter of minutes and indeed this feature can be fully automated and deployed as a self-service option.” System alterations and new systems must be carefully tested and one of the key benefits of server virtualisation is the ease with which temporary test systems can be set up at minimal cost.


Virtualisation is often viewed as enabling significant costs, both capital and revenue to be reduced. Virtualisation can provide many more benefits as illustrated by this case study. This study shows that additional benefits include greatly improved disaster recovery, much improved IT management and simplification, greatly improved hardware utilisation and the move for IT from cost centre to enabler.

The pivotal role of IT in many organisations demands that the IT function must be capable of adding value and improving an organisation’s ability to respond to the needs of the marketplace. As Farrelly said, “Lakeland’s IT department has turned the corner and IT is now seen as an enabler rather than a cost centre”. Key to realising these benefits is the “perfect match” between an organisation’s objectives, skills and the Microsoft technology solutions that are available.