May 25, 2006

Tasked with handling the business processing for parent First National Bank of Nebraska ($16 billion in managed assets) and its 10 subsidiary banks, First National Bank of Omaha (FNBO) was burdened with a complicated back-office IT environment. The enterprise's 60 different Web sites were hosted on Sun Microsystems (Santa Clara, Calif.) Solaris servers running multiple operating systems, and Web-based applications were run on nearly 600 Wintel servers, according to Ken Kucera, SVP, FNBO. Meanwhile, Kucera adds, the Omaha-based bank's IBM (Armonk, N.Y.) zSeries mainframe was sitting underutilized with only three of 32 nodes in use.

Maintaining the complex IT environment was costly, Kucera says. "We were growing the number and size of the Web sites and applications, so we were replacing 30 percent of our machines each year, and we were increasing the number of [support] people by 30 percent per year," he explains. Further, FNBO did not have the technology to run a virtual environment, so it was using only a small fraction of the Sun servers' capacity, Kucera notes. "Every time we needed more capacity for a Web site, we had to get a new Solaris box," he says. "We wanted to get our expanding infrastructure under control."

To enable a virtual computing environment and tap unused capacity, in late 2002, the bank began exploring options for running Linux on the mainframe. "We already had the mainframe on the floor and wanted to use more of its processing power," Kucera says.

Virtual Solution

At the time, only Novell (Waltham, Mass.) SUSE Linux servers had the capability to run in a virtual environment and integrate with the IBM mainframe, contends Kucera, who adds that Microsoft (Redmond, Wash.) and Sun have since added this capability. Still, Kucera stresses, he researched the performance of SUSE servers in live environments before FNBO signed a contract with Novell in late 2003.

Installation of five Novell servers began in mid-2004. The conversion took a year because each Web site had to be coded and tested in the new environment, Kucera explains. Utilizing virtualization, FNBO was able to replace 40 Sun Solaris servers with the five Novell machines using the Integrated Facility for Linux, a central processor dedicated to Linux workloads, on the IBM zSeries mainframe running SUSE Linux. No other hardware or software changes were needed.

The five virtual SUSE Linux servers now run all of FNBO's online banking applications, and call center and branch automation services. Kucera notes that non-Web-based applications, some of which could not run in the Linux environment, were ported over to IBM blade servers, enabling the bank to maintain a combined Linux-Microsoft OS environment and scale down its physical servers.

The migration from a distributed server infrastructure to the mainframe and blade server architecture resulted in consolidation of the bank's hardware by more than 95 percent, according to Kucera. Additionally, the bank reduced its administrative costs by nearly 70 percent and reduced software licensing costs by more than 90 percent. Overall, the bank saved $1.8 million in operating expenses its first year and estimates a savings of $9.6 million through 2011.

Infrastructure

***Institution: First National Bank of Omaha (Omaha), a subsidiary of First National Bank of Nebraska.

***Assets: $16 billion in managed assets (First National Bank of Nebraska).

***Business Challenge: Simplify infrastructure and improve scalability.

***Solution: SUSE Linux servers from Novell (Waltham, Mass.).