1. IBM Systems and Technology Telecommunications
Case Study
China Telecom dials
up pressure on the
competition
With an innovative internal cloud computing model
based on IBM technology
One of only three telecommunications operators in China, China
Overview Telecom’s Jiangxi Subsidiary is a full-service integrated information
service operator and the world’s largest wireline telecommunications
The need
and broadband services provider, with 53 million broadband sub-
Operating in a highly competitive mar-
scribers at the end of 2009. Offering services including basic and
ket, China Telecom needed to reduce
time to market for new products and mobile telecommunications, internet access and information services,
services to seize greater market share. China Telecom has locations in ten provinces in China. 20,000 of
The high cost of floor space and power the company’s 312,520 employees work in the Jiangxi subsidiary.
in data centers was restricting growth.
The solution In the fiercely competitive telecoms market, innovation is everything.
Worked with IBM and Business China Telecom is constantly under pressure to bring new products and
Partner HCF to implement services to market faster than its competitors, to increase the chance of
IBM Power 570 servers, using
IBM PowerVM and IBM Systems garnering a larger market share.
Director VMControl to create cloud
landscapes and to manage virtual Dr. Lifeng Liu, Assistant General Manager in the Network
pools. IBM SVC is used to virtualize
Development Department explains: “Traditionally we followed a set
and manage storage.
process to launch a new business application. Our marketing depart-
The benefit ments would identify a potential customer need, define a response and
China Telecom slashed time to market pass this back to the back-end departments to assign the necessary IT
for new offerings from three or four
resources to turn this into a real product or service. We had a relatively
months to just two or three days—
representing a key competitive advan- mature and segmented workflow in place, which worked well—but we
tage. Improved utilization and cut felt it could be faster and more efficient.”
hardware costs by over 50 percent
while reducing power requirements
and CO2 emissions.

2. IBM Systems and Technology Telecommunications
Case Study
As the company continued to grow, it found scaling up its resources
problematic. The high cost of data center floor space and energy
“Our primary estimate is presented a further obstacle to speed to market, as China Telecom
that the IBM solution traded off the speed of new products going live against prohibitive
operational costs.
has improved hardware
utilization by over There is also an increasing demand for products which connect with
50 percent, although multiple services and devices, introducing a considerable challenge for
China Telecom.
this may in fact be
higher. Sharing “Because our departments each had their own pool of resources,
developing a product with numerous functionalities was often very
resources through the complex,” says Dr. Liu. “For example, we offer SMS services through
internal cloud has both our mobile telephone network and our website, but we had to
allowed us to consolidate exploit a lot of resources to get this up and running, as it involved two
separate departments.”
hardware, translating
into 50 percent cost sav- Selecting IBM
ings in terms of CPU China Telecom began to consider developing a private cloud comput-
ing model, leveraging virtualization to optimize use of resources.
and storage.” The Jiangxi subsidiary was one of four sites selected for the pilot
implementation.
—Dr. Lifeng Liu, General Manager Assistant
in the Network Development Department,
China Telecom
“Cloud computing is a very popular idea in the industry at the
moment: many companies are speculating about the benefits it
could provide, but are also worried about the risks inherent in new
technology,” comments Dr. Liu. “We knew, with the right partner, we
could seize the opportunity to get ahead of the competition, while pro-
tecting our shareholders’ investment.”
Following a lengthy exploration of competing offerings, the company
selected IBM technology.
2

3. IBM Systems and Technology Telecommunications
Case Study
“There were a number of reasons for China Telecom choosing to part-
Solution components ner with IBM on this innovative project,” explains Dr. Liu. “We were
impressed by their reputation, as they seem to be the leader in the field
Servers
of cloud computing, and we had access to many case studies and cus-
● IBM Power® 570
tomer references that confirmed this. Also, since they have a special-
Software ized telecoms unit, we felt that they truly understand the telecoms
● IBM AIX® business—better than HP or Microsoft—which is a great advantage.”
● IBM PowerVM™
● IBM Systems Director VMControl™
● IBM System Storage® San Volume Sharing resources with virtualization
Controller The company worked with IBM Lab Services and IBM Global
Technology Services and IBM Business Partner HCF to deploy
Services
IBM Power® 570 servers at four sites including Jiangxu. IBM Systems
● IBM Lab Services
● IBM Global Technology Services – Director VMControl™ is used to help China Telecom simplify the
Advanced Technical Support build-up and deployment of virtual servers, manage the virtual pool as
a single system, and move workloads and adjust resources dynamically.
IBM Business Partner
IBM PowerVM™ Enterprise Edition is used to divide the servers into
● HCF
multiple virtual partitions, creating a private cloud.
“Ultimately, virtualization gives us the tools to transform our rigid
workflows into a much more fluid and flexible business model,” says
Dr. Liu. “We can efficiently form shared pools of resources, dynami-
cally adjusting the server capacity assigned to each department to meet
changing workload demands.”
China Telecom also chose IBM System Storage® SAN Volume
Controller (SVC), which provides highly flexible access to storage
resources. SVC allows storage from multiple devices, including
non-IBM systems, to be pooled and presented as integrated volumes
to applications.
“The IBM SAN Volume Controller gives us complete control over our
storage environment,” comments Dr. Liu. “It has really impressed with
its reliability and security, leading us to believe it is truly an enterprise-
level storage product. It enables us to move data within the virtual
space without the need to stop operations, leading to greater continuity
of service.”
3

4. IBM Systems and Technology Telecommunications
Case Study
IBM Power 570 servers provide industry-leading performance at a rea-
sonable price point, with superb availability and scalability enabling
China Telecom to do more.
“The performance-price ratio of the IBM Power 570 servers is very
impressive,” says Dr. Liu. “We have experienced increased availability
and reliability since deployment, as well as improving response speed
of the system. It is also highly scalable, enabling us to grow efficiently
and without disruption to services.”
Significant savings
China Telecom has achieved considerable cost savings since imple-
menting the new solution, generated through higher utilization of
hardware resources.
“Our primary estimate is that the IBM solution has improved hardware
utilization by over 50 percent, although this may in fact be higher,”
comments Dr. Liu. “Sharing resources through the internal cloud has
allowed us to consolidate hardware, translating into 50 percent cost
savings in terms of CPU and storage.”
The increase in consolidation has led to China Telecom requiring less
data center floor space and power. Built-in energy-saving technology in
the IBM Power 570 servers helps to lower energy costs without sacri-
ficing performance or business flexibility.
“The built-in load balancing and energy-saving capabilities in the
IBM Power 570 servers enable us to use resources as efficiently and
effectively as possible with minimum effort,” says Dr. Liu. “The cen-
tralized cloud computing model also allows us to take a more economi-
cal approach to maintenance, using virtual teams of just three to four
people to manage the entire system, whereas before this took at least
ten people. Consequently, labor costs have reduced considerably.”
4

5. IBM Systems and Technology Telecommunications
Case Study
Opening up new markets
By leveraging an innovative cloud computing model, China Telecom
has gained a key competitive advantage, accelerating the time to mar-
ket for new products and services.
“As far as we know, we are the only company in our market to adopt
this kind of approach to infrastructure,” says Dr. Liu. “This made it a
risky endeavor, but one we feel has paid off, giving us a real edge over
the competition.”
“It is so much easier to get new products through the pipeline now,
since different departments can work together and get access to the
capacity they need pretty much as soon as they want it. It used to take
us three to four months to develop a new business application, now it
is only two to three days, giving us a much better chance to corner the
market before our competitors have a chance to enter the fray.”
Looking to the future
Currently, the internal cloud is only in use at four pilot sites, including
Jiangxu—although the success of the project has led to plans to extend
its use throughout China. Furthermore, there are plans to exploit idle
resources by introducing a new “resource rental” service to other
companies.
“Embracing cloud computing has opened up many new opportunities
for China Telecom, which we are keen to capitalize on,” says Dr. Liu.
“We really feel it is the future of computing, and are proud to have
worked with IBM to deploy this solution while it was still relatively
new and innovative.”
5

6. For more information
Contact your IBM marketing representative or IBM Business Partner,
or visit the following website: ibm.com/systems
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November 2010
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