Nomura's global head of IT infrastructure tells The Banker how a mammoth and swiftly completed datacentre migration project has saved the bank about £9m a year.

By the time The Banker’s July issue has rolled off the presses, Nomura should have completed the final stages of a massive datacentre migration project, which began in the midst of the financial crisis. In the process, the company fitted out two new facilities, halved power consumption and avoided £16m ($26.2m) in punitive charges.

Michael Fahy, Nomura’s global head of IT Infrastructure, describes the process as “an extreme programme requiring an extreme level of commitment”. Any suspicion of hyperbole should be easily dispelled by the fact that the bank sourced and equipped the new centres, then migrated applications from, and decommissioned two existing facilities in the space of 13 months.

The project's roots date back to the Tokyo-based bank’s 2008 purchase of Lehman Brothers’ Europe, Middle East and Africa (EMEA) investment banking and equities business. The acquisition brought with it some of Lehman’s IT infrastructure which, in combination with Nomura’s existing datacentres, created a costly, underpowered and inefficient amalgamation, producing a whopping 54,898 tonnes of carbon dioxide per year. In response, Nomura elected to build a new facility from scratch.

“We looked at what we had from Lehman, and what we had from Nomura, and came to the conclusion that none of the existing estate would be able to support the business,” says Mr Fahy.

A swift exit

Meanwhile, Nomura’s management decided to move the recently enlarged group’s EMEA headquarters to a new London address. Mr Fahy and his team faced a tough decision. The bank was scheduled to completely vacate its existing premises – which held two datacentres – by the end of September 2010. Failure to do so would result in an eye-watering £16m penalty.

Unless the lease was extended, which would also prove costly, this meant that much of Nomura’s IT infrastructure would have to be transferred to the new site in a little over a year. Before irrevocably embarking on this course of action, Nomura spoke with consultancies such as Deloitte and Gartner. It decided to press ahead.

“The feedback from everybody was that it was possible, but very ambitious and never done before”, says Mr Fahy. “There’s being ambitious and then there’s being reckless, and we made sure we were on the right side of that curve.”

Mr Fahy and his team then had to source and close out the negotiation on two datacentre sites, in what effectively amounted to a month. To achieve this, Nomura negotiated with two available facilities as if it was only in the market for one, maintaining commercial pressure in terms of price and necessity of swiftly securing an agreement. “It was very late in the day when we let them know we were executing both of them,” says Mr Fahy. “But that allowed us to complete the deal in pretty much record time.”

Securing supplies

It was essential that every aspect of the new datacentres was delivered in line with an aggressive schedule, as any slippage would cost Nomura dearly. As a result, the bank worked closely with its technology partners to ensure it knew precisely where each component came from, as well as how and when it would arrive. Supply routes were scoured for potential risks – delivery by road was preferred to ship for example, as it would be less prone to delays – and manufacturing guarantees were extracted.

Mr Fahy praises the close relationships cultivated with the 73 technology partners involved in the project, and their efforts to ensure it never slipped behind schedule. At one point, this involved the partners forming a human chain to unload a truckload of servers in the midst of snow so heavy that Nomura’s loading bay was out of action. On another occasion, a supplier chartered a helicopter to pick up a crucial network device component from Germany.

Nomura built a number of energy-saving measures into the new datacentres, such as enclosed aisles to improve cooling efficiency, an ambient temperature of 24°C instead of 19°C, and made use of optical fibre rather than copper cables where possible. The use of virtualisation was also increased, from 2% to 35%.

The two datacentres were duly completed by the end of May 2010, and applications were migrated by early September that year, allowing for an exit from the old datacentres by the end of the month. Phase two of the project, which is scheduled to be completed by June 30, was to relocate operations from two more of Nomura’s datacentres. Mr Fahy describes the operation as slightly more complex than the first big move, due to the nature of the applications involved. However, because this stage did not involve building new infrastructure, and the premises these facilities were located on would remain in Nomura’s hands, the deadline was not quite so extreme. 

Counting returns

The returns of Nomura’s efforts were significant. Normalised annual running costs were reduced by £9.1m annually, thanks to reduced energy consumption. Accordingly, Nomura’s carbon footprint was reduced by 44%, saving 24,399 tonnes of carbon dioxide a year. Anticipating future demands, spare server capacity was boosted by 51%, even though the number of physical servers was reduced from 7500 to 3300.

“You wouldn’t choose to do a project like this again in terms of absolute pressure,” says Mr Fahy. "But it’s amazing what you can do if you have enough of an imperative, a strong objective and you’re willing to work closely with your partners, and to trust and empower your people to make decisions.”

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