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New Zealand Post and Red Hat:
do more with less

Introduction

New Zealand Post is internationally recognised as one of the most efficient providers of inexpensive postal services in the world.

After incorporating in 1987, today the New Zealand Post Office is a profitable, state-owned business in which the New Zealand Government is its key stakeholder. It provides communications solutions for a wide range of people and businesses, using both people and technology to achieve long-term growth.

While it continues the tradition of carrying and delivering letters and parcels through its Letters, International, and Express Couriers businesses, New Zealand Post has responded to growing communication needs through innovation in the residential, business, and international markets.

New Zealand Post delivers a range of services in business and personal communications, physical goods distribution, banking and payments, and document and information management. It relies on its 17,500 employees to do this work.

With commercial business operations in over 35 countries, in addition to its 992 retail outlets in New Zealand, New Zealand Post is responsible for around one billion pieces of mail each year, delivered to over 1.8 million delivery points.

It also processes some 20 million financial transactions each year, from registering cars to handling telephone bill payments. In a single day, New Zealand Post has processed as many as 6.9 million pieces of mail.

Opportunity

With the sheer scale of its operation, New Zealand Post relied heavily on a robust technology infrastructure consisting of approximately 450 servers (including 100 Red Hat Enterprise Linux servers), 2,700 corporate PC users and two nationwide networks (enterprise and retail systems).

“Quoting extremely high operating costs, an inability to take new initiatives to market in a timely manner and likening the development department’s agility to that of an oil tanker, it was quite clear we needed to make some serious changes,” said Alan Roberts, Architecture and Operations Manager for the Postal Services Group IT at New Zealand Post.

New Zealand Post recognised the need to drive operating costs down by 50% improve performance, increase capacity and reduce its time to market.

“It came down to that age-old question of whether it’s really possible to do more with less and we had to prove that we could,” commented Roberts.

The organisation was faced with a number of obstacles that would ensure this would ensure this would be a genuine challenge.

New Zealand Post’s aging hardware incurred high maintenance costs and demanded a large number of CPUs to meet customers’ application performance expectations. Plus, inefficient license management also meant that a large number of Oracle ‘per CPU’ licenses were required to meet compliance requirements. Highly distributed applications made ‘named user’ licenses inappropriate.

Additionally, having database, file, and appllication services bundled on the same platforms and tightly coupled signifcantly increased the cost, development effort, and level of testing required to make even the smallest changes to the environment. It also compounded the inefficiencies of the company’s database licensing program.

While some applications were crammed onto single platforms, many others consisted of similar technologies isolated on platforms of their own, resulting in unnecessarily high administrative overheads.

Solution

New Zealand Post adopted the Service Oriented Shared Infrastructure (SOSI) philosophy developed to encourage the separation, isolation, and presentation of ‘application services’.

This would enable the consolidation of similar services, maintain clear separation between services, reduce administration overheads and tune each service environment specifically to maximise performance.

For SOSI to be a success, it was critical each service was based on ‘Best of Breed’ technologies with proven track records for supportability, reliability, scalability and compatibility.

After a rigorous evaluation of avilable technologies it was decided that a combination of Red Hat Enterprise Linux 3 and Red Hat Enterprise Linux 4, Oracle Application Server 10g and Oracle Database 10g Enterprise Edition would serve as the foundation of New Zealand Post’s adoption of SOSI, and would be used to support the initiation of an Oracle service.

According to Robers, “After confirming our commitment to the SOSI philosophy, we quickly realised that in order for it to be the best ‘band for our buck,’ it would have to be dedicated, enterprise-ready and able to cater for application and database services.

“We were confident this would yield the greatest return on our investment in the shortest possible timeframe.”

Benefits

Once the foundation services were implemented they were rigorously stress tested using duplicates of New Zealand Post’s mission-critical corporate applications.

This testing produced impressive conclusions. Specifically, the combination of Red Hat and Oracle services outperformed the organisation’s existing solution by over 500%, using less than one third of the number of CPUs (down from 30 to just eight).

Furthermore, it required a data centre footprint that was 90% smaller than the existing solution and was readily scalable at short notice. It required minimal effort and provided up to four times the performance of the original configuration (a total performance increase of 2000%).

Over the next 15 months, New Zealand Post proceeded with widespread adoption of the services with minimal disruption to customers. In total, over 23 applications migrated from the existing environment, including two of the company’s top five mission-critical applications.

Following the successful migration, a formal financial review of the project confirmed that the infrastructure costs had been reduced by more than 70%, and according to Roberts, this is just a taste of the savings that can be expected.

“As the service is extended, the intangible savings and total value of the solution is continuing to grow. So, it’s true, you can do more with less…we’re doing it now.”