BCBS Minnesota achieves a significant TCO reduction by virtualizing SAP applications on IBM System z

Published on 11 Jan 2010

Even without factoring in the maintenance and support costs... we found that running a virtualized Linux environment on System z would be significantly less expensive than a more traditional distributed architecture.

Ted Mansk, Director of Infrastructure Engineering and Databases, BCBS Minnesota

BlueCross BlueShield of Minnesota


Deployment country
United States



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 Minnesota’s Arrowhead region and Rochester, BCBSM employs 3,800 people and operates as a not-for-profit, taxable organization: more than 90 per cent of the premiums it receives are paid back out for health care claims.

Business need
As a not-for-profit healthcare organization, Blue Cross and Blue Shield of Minnesota (BCBSM) continually strives to reduce operational costs and deliver better value to its two million members. Its existing Microsoft Windows and Intel processor-based server landscape for SAP was costly to operate and maintain, and BCBSM began looking for a better solution.

Working with IBM and SAP, BCBSM consolidated 40 HP Intel-architecture servers to a single IBM System z server with IBM Integrated Facility for Linux (IFL) engines. The SAP ERP applications now run in a virtualized SUSE Linux environment. The IBM DB2 database supporting the SAP applications runs under z/OS on the same System z server.

With System z, total cost of operations will be reduced significantly over the next five years, compared to the cost of a distributed infrastructure. Reductions in space, electricity and cooling requirements are helping BCBSM to achieve its green computing objectives. Virtualization has cut server provisioning times by 99 per cent, enabling the IT team to respond faster to requests. Availability has improved significantly, and disaster recovery can be achieved 97 per cent faster than before.


IBM products and services that were used in this case study.

DB2 for z/OS, Tivoli Storage Manager, z/OS, z/VM

z Systems : z10 Systems Enterprise Class (z10 EC)

IBM-SAP Alliance

Energy Efficiency, Server Consolidation, Service Management, System z Software, Virtualization

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