Insurer reaps $10M on storage consolidation

Less than a year after it spent about US$10 million to consolidate its storage-area network infrastructure, one of the nation’s largest Medicare carriers says that it’s beginning to reap a full return on its investment and has saved an additional 40 per cent on its hardware costs.

Wisconsin Physicians Service Insurance Corp. (WPS) processes about 369,000 claims each day for Medicare and military insurance accounts. In recent years, the Madison, Wis.-based insurer has added Illinois, Michigan and Minnesota to its Medicare rolls, which in turn has led to a leap in annual claims, from the US$840 million it was processing in 1997 to a little more than $7 billion last year.

Randy Lengyel, senior vice-president of information systems at WPS, said the increase in claims processing forced the company to revisit its business partnerships with technology vendors. That led to a major shift, as WPS replaced Hitachi Data Systems Ltd. equipment with IBM Corp. products in June.

The insurer had been using Santa Clara, Calif.-based HDS’s high-end 7700 disk array with 2.9TB of capacity, as well as four HDS midrange arrays with 1TB of capacity each. It replaced them with two IBM Shark Enterprise Storage System Servers with a combined capacity of 11.6TB. It also replaced HDS’s Pilot 77 mainframe with IBM’s z/900 model.

An HDS spokeswoman said the company’s choice of IBM technology had more to do with the insurer not being allowed to continue reselling HDS’s midrange RAID device, an accusation WPSI denied.

Jim Wang, director of enterprise network services at WPS, said HDS’s technology was dependable, fast and easy to manage, but IBM won out on price, speed and interoperability. “On the performance side, IBM has the same rating in MIPS as Hitachi, but while the new z/900 has the same number of MIPS, it’s running a lot faster, so our batch windows are a lot shorter,” Wang said. “Our technicians are a lot happier about this.”

The upgrade allows WPS to take a single “snapshot” of its mainframe, tape, LAN and open systems server environment in just under two hours using 30 tapes. Previously, it took the insurance company six hours and 430 tape cartridges just to get a snapshot of its mainframe environment each week, said Lengyel.