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IBM Case Study

BCBS Minnesota achieves a significant
TCO reduction with virtualized Linux on
IBM System z

Overview

Challenge

The Microsoft Windows and

Intel processor-based server

landscape at Blue Cross and

Blue Shield of Minnesota

(BCBSM) was inflexible and

costly to operate and maintain.

Solution

IBM helped consolidate 140 HP

Intel-architecture servers to a

single IBM System z with six

Integrated Facility for Linux (IFL)

engines. Key applications now

run in SUSE Linux Enterprise

virtual servers, while IBM DB2

databases run on z/OS on the

same physical machine.

Benefits

BCBSM expects to reduce TCO

significantly over five years;

energy-efficient server platform

helps to achieve green comput-

ing objectives; virtualization cuts

server provisioning times by 

99 percent and provides 

enormous flexibility to meet

emerging business objectives;

full disaster recovery can be

achieved within 90 minutes—

97 percent faster than before.

Blue Cross and Blue Shield of

Minnesota (BCBSM) is the largest

health plan in the state, providing 

health coverage to more than 2 million

members. With headquarters in 

Eagan, MN, and branch offices in

Arrowhead and Rochester, BCBSM

employs 3,800 people and operates as

a not-for-profit, taxable organization:

more than 90 percent of the premiums

it receives are paid back out for health

care claims.

To maintain this high ratio of payouts to

premiums and provide the best possi-

ble value to its members, BCBSM puts

continual downward pressure on its

operational costs. In the IT department,

this translates into a strategy of doing

more with less—choosing the hardware

and software that will drive business

optimization while reducing acquisition,

implementation, support and mainte-

nance costs.

A new platform

“For several years, we had been run-

ning our IBM DB2® databases on the

IBM System z® platform—but our

applications servers, including those for 

SAP ERP, were running in a Microsoft®

Windows® environment on Intel® 

processor-based hardware from HP,”

explains Ted Mansk, Director of

Infrastructure Engineering and

Databases at BCBSM. 

“ From every

perspective, running
applications under
Linux on System z
makes sense for our
organization.
Performance,
reliability, disaster
recovery, server
provisioning and 
cost efficiency have 
all seen dramatic
improvements—helping
BCBSM deliver better
service and better
value to its members
across the state.”

Ted Mansk, Director of
Infrastructure Engineering and
Databases at BCBSM

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