Customer Solution Case Study
/ / Rayovac Chooses Windows over Linux for Lower Cost of Ownership, Less Risk
Overview
Country or Region:United States
Industry:Consumer packaged goods
Customer Profile
Consumer products maker Rayovac Corporation is headquartered in Atlanta, has 9,300 employees worldwide, and generates approximately U.S.$2.5 billion inannual revenues.
Business Situation
Rayovac needed cost-effective, reliable, secure, and manageable server software on which to run its new SAP Advanced Planner and Optimizer solution.
Solution
Rayovac chose a server solution based on the Microsoft® Windows Server™ 2003 operating system and the Microsoft SQL Server™ 2000 database management system over one based on Red Hat Linux and Oracle.
Benefits
Nearly$1 million lower total cost of ownership over four years
Proven ability to help keep the solution reliable and secure
Reduced exposure to intellectual property infringement claims
Rapid integration of new acquisitions into IT infrastructure / “By choosing Windows over Linux for our new SAP APO solution, we’ll save an estimated $1 million in software, staffing, and support costs over the first four years.”
Rick Dempsey, Chief Information Officer, Rayovac
After deciding to run its SAP Advanced Planner and Optimizer (APO) solution on an Intel® Itanium™ 2–based Unisys ES7000 server computer, Rayovac had to choose between the Microsoft® WindowsServer™ 2003 and Red Hat Linux operating systems. Rayovac chose Windows Server based on advice from Microsoft Certified Partner Bedrock and because WindowsServeroffered the required performance and scalability at a much lower cost of ownership—an estimated U.S.$185,000 less in one-time costs and $185,000 less in annual recurring costs, or nearly $1 million in savings over the first four years. In addition, Rayovac can support its new SAP APO solution with existing processes, skill sets, and technology partners, all of which will help ensure that the solution remains reliable and secure as the company rolls it out across a global supply chain.
Note: Since the solution was deployed, Rayovac Corporation changed its name to Spectrum Brands.
Situation
Rayovac is a global consumer products company and a leading supplier of batteries, lawn and garden care products, specialty pet supplies, and shaving and grooming products. The company holds a leading market share position in a number of product categories, with an international brand portfolio that includes Rayovac, Remington, Varta, Schultz, Spectracide, Garden Safe, Nu-Gro, Hot Shot, Cutter, Repel, Tetra, Marineland, and others. Rayovac products are available in more than 1 million stores in 120 countries, including the world’s top 20 retailers.
When the Thomas H. Lee Company acquired Rayovac in 1996, the IT infrastructure was a mix of technologies including the Microsoft® Windows® operating system, Novell NetWare, Lotus Notes, and homegrown business solutions and mainframe applications. Over the next few years, Rayovac standardized on Windows for everything except its SAP R/3 enterprise resource planning (ERP) system, which runs on the HP-UX operating system.
The Rayovac business strategy calls for a combination of sales growth for existing brands and growth through acquisition, complemented by taking advantage of the company’s IT infrastructure, distribution channels, purchasing power, and operational structure to drive efficiencies and reduce costs. In support of that strategy, in early 2004, Rayovac decided to augment its existing SAP R/3 ERP system with SAP Advanced Planner and Optimizer (APO) software to help improve supply chain management.
While the ERP system ran on HP-UX on proprietary hardware, Rayovac wanted to deploy the new APO solution on less expensive hardware and software. After choosing an Intel Itanium 2–based Unisys ES7000 server computer, the company still faced a decision about which operating system and database were best. Rayovac examined two options: Microsoft Windows Server System™ integrated server software, including the Windows Server™ 2003 operating system and a SQL Server™ 2000 database; or Red Hat Linux and an Oracle database.
Important decision criteria included cost ofownership, reliability, performance, and security, all of which the company knew would depend on how easily it could assimilate the new solution into its existing ITenvironment and support it with existing processes and skill sets.
Solution
Rayovac selected Microsoft Windows Server System over Linux and Oracle because the Windows platform was more cost-effective and presented less risk. “By choosing Windows over Linux for our new SAP APO solution, we’ll save an estimated $1 million insoftware, staffing, and support costs over the first four years,” says Rick Dempsey, Chief Information Officer for Rayovac. “We needed performance, security, and reliability at a reasonable price, and Linux would have presented greater risk in all those areas. It may be interesting from a technical perspective, but Linux isn’t acceptable from a business perspective. I need a proven IT environment that I’m sure we can support.”
The company turned to trusted technology partner Bedrock Managed Services and Consulting to help validate its decision, relying on the experience of Bedrock President and Chief Executive Officer MarkBakken. “I assured Rayovac that Windows Server System running on the Unisys ES7000would work as expected, andthat it could deliver the same reliability and scalability as HP-UX running on proprietary hardware but at a much lower cost,” says Bakken.
Rayovac’s choice of Windows Server System as the foundation for its APO solution followed a number of successful implementations of SQL Server running on Windows fordata management within the company. Rayovac also uses SQL Server for its SAP Business Warehouse, corporate data warehouse, and business intelligence applications. Altogether, Rayovac maintains more than 2 terabytes of enterprise data in its SQL Server environment.
Implementation and Rollout
Rayovac implemented the APO solution in the10 months following its decision to use Windows Server System. The APO demand planning module was deployed in September 2004, and the APO supply network planning module was deployed in January 2005. “Our new SAP APO solution went live faster than expected—due in part to the fact that the Windows platform was stable from its initial installation,” says Dempsey.
Rayovac is using the APO solution for its Rayovac and Remington brands in the United States, encompassing some 2,000 stock-keeping units (SKUs), hundreds of suppliers, 4 distribution centers, 2 manufacturing plants, apackaging operation, and between 50 and 75 end users. The company plans to expand its use of the solution to cover at least 10,000 of its 15,000 SKUs by the end of 2006.
“We now have a vastly improved understanding of our supply chain—including visibility into the capacity of our suppliers,” says Dempsey. “We had a potential inventory issue brewing before the implementation of APO, and the solution allowed us to quickly understand and address the issue.”
Architecture
The SAP APO application layer, liveCache (similar to an in-memory database), and the SQL Server 2000 relational database run on the same instance of Windows Server 2003 Enterprise Edition, which resides on a hardware partition on the ES7000 configured with eight 64-bit Intel Itanium 2 processors and 64 gigabytes (GB) of RAM. A second similarly configured partition hosts a test environment.
External disk storage for both ES7000 partitions is provided by an EMC Symmetrix storage area network. Users remotely access the solution through a centralized server cluster. The SAP client runs on the servers, and software from Citrix Systems remotely transmits the client interface to user desktops—an approach that simplifies the management of desktop applications and allows Rayovac to easily extend them to newly acquired companies.
Benefits
Selecting Microsoft Windows Server System over Red Hat Linux and Oracle for its new SAP Advanced Planner and Optimizer solution is expected to save Rayovac close to U.S.$1 million in software, staffing, and support costs over the next four years. In addition, thecompany’s decision to go with a familiar platform allows Rayovac to support its new solution with the same skill sets, processes, and partners that the company relies on to keep its other systems running smoothly.
“Technologists who want to experiment with new things like Linux may call our Windows-based environment boring, but from my perspective as a businessman it’s highly efficient and reliable,” says Dempsey. “We’re able to achieve 99.99 percent uptime while keeping IT costs to 1.5 percent of revenues.”
Lower Total Cost of Ownership
A key reason for Rayovac’s decision to use Windows Server System was that it offered alower total cost of ownership than an approach based on Linux and Oracle—a difference of an estimated $185,000 in onetime costs and an estimated $185,000 in annual recurring costs, adding up to close to $1 million over the first four years.
Had Rayovac chosen Linux and Oracle, elements of the estimated $185,000 in additional one-time costs would have included licensing fees for an Oracle database, Linux connectors for the company’s network monitoring system, additional SAP consulting fees, and additional costs to cross-train employees on Linux. Elements of the estimated $185,000 in additional recurring costs would have included salary and benefits for a full-time Linux system administrator, and support and maintenance fees for Red Hat Linux, the Oracle database, and the new network monitoring system connectors.
Implementation of the APO solution on Windows Server System also provides evidence that the Windows platform presents a valid migration option for the company’s SAP R/3 system. “We’ve been looking at moving our enterprise resource planning system from HP-UX to Windows to decrease costs,” says Dempsey. “Successful implementation of SAP APO on the Windows platform is a large step toward that goal.”
Reliability and Security
Windows Server System will help Rayovac keep its new APO solution reliable and secure by allowing the company to support it with proven processes, skill sets, and technology partners. Since the solution went live, Rayovac has experienced no downtime due to hardware, operating system, or database issues.
“Linux presented unacceptable risk in the areas of reliability and security,” says Dempsey. “The ability to keep our systems reliable and secure depends on more than just the robustness of the software itself. It also requires an ability on our part to properly manage and support the solution, which in turn depends on the depth and capability of the vendor’s support organization—an area where Windows is a known good and Linux is a total unknown. In addition, with Windows, I know we’re in good shape from a Sarbanes-Oxley compliance perspective.”
Comprehensive Indemnification
By choosing Windows over Linux, Rayovac will reduce its exposure to legal risk. Unlike many Linux vendors, Microsoft provides strong indemnification against patent, copyright, trade secret, and trademark infringement claims without a monetary limit—part of its commitment to ensuring that licensing issues and questions of intellectual property do not present problems for customers. “Legal risk is another reason why Linux wasn’t right for us,” says Dempsey. “We prefer to keep things simple, and Microsoft’s strong indemnification gives us one less issue to worry about.”
Platform for Future Growth
With Windows Server System, Rayovac has aserver solution that can support both sales growth for existing brands and growth through acquisitions. A Windows-based infrastructure enabled Rayovac to assimilate all the business systems that came with its 2003 acquisition of Remington into its own ITinfrastructure in six months, significantly reducing the costs associated with a new line of business.
Rayovac recently improved its ability to manage its Windows-based systems—including the APO solution—by deploying Microsoft Systems Management Server 2003, an initiative (in which Bedrock assisted) that will help streamline the distribution of new software and software updates. The company now is working with Bedrock to deploy Microsoft Identity Integration Server, which will help Rayovac manage user identities, authentication methods, and access rights for its various Windows-based solutions across departments, offices, and regions. Rayovac also plans to evaluate the use of Microsoft Office SharePoint® Portal Server 2003 to facilitate communication and collaboration across its global enterprise.
“Executive management used to view IT as only a cost center, but now they’re seeing how it can provide a competitive advantage,” says Dempsey. “Windows Server System gives us the ability to easily assimilate new acquisitions and deploy new business capabilities, thereby facilitating our strategy for business growth.”
Microsoft Windows Server System
Microsoft Windows Server System is a line of integrated and manageable server software designed to reduce the complexity and cost of IT. Windows Server System enables you to spend less time and budget on managing your systems so that you can focus your resources on other priorities for you and your business.
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