Peer-to-Peer

Biocon switches to Exchange

Migrating from IBM Lotus Notes 6.5 to Microsoft Exchange 2007 has helped Biocon in avoiding substantial license fee, upgrades and IT support costs, and has given it an architecture that seamlessly integrates with its other Microsoft applications, says Akhtar Pasha

The migration from IBM Lotus Notes to Microsoft Exchange Server 2007 has enabled 30% savings in operating and licensing costs to the pharmaceutical giant, Biocon. This mail-messaging solution offers easy and seamless integration with its core business applications, ERP, Office Communication and Live Meeting.

Headquartered in Bangalore, Biocon happens to be world’s seventh largest biotechnology firm, specializing in biopharmaceuticals, custom research and clinical research. The company has been growing at a CAGR of 25% YOY, and has increased its employee base from 870 in 2006 to over 2,200 people today.

The major challenges faced by Biocon’s IT department were—adoption of new technology, complying with regulatory norms and implementation of high adaptive sol-utions involving minimum training.

Migration from Lotus Notes to Microsoft Exchange Server

In 2007, the IT department of Biocon decided to review its overall email strategy as the per user license cost of IBM Lotus notes was quite high and support cost of new users and configurations costs were significant. While the challenges were growing at a rapid pace, Radhakrishnan G, General Manager-Systems, Biocon, wanted to provide superior IT infrastructure that required no additional IT/manpower investments. This apart, their email messages per user had grown from 1.2 per day in 2006 to 1.78 per day in the current context, and email storage had grown from 300 GB in 2007 to 500 GB by end of 2008—putting tremendous pressure on the IT infrastructure.

Radhakrishnan said, “We had been using IBM Lotus Notes 6.5 Version for quite sometime. While there have been some improvements, particularly since its 8.0 Version has additional features similar to MS Exchange Server, we found the licensing costs for Lotus Notes clients and recurring/operating costs to be prohibitory high compared to running the Exchange Server.” Additionally, he continued, “We had [Lotus Notes] integration issues with our other applications such as ERP, SharePoint, EPM and the like.”

The IT department and key members across the user community started evaluating the technology options. The selection team considered two options—one to consider alternate solutions such as Microsoft Exchange, Novell GroupWise, etc., independent of existing technology stack in the company. Second, evaluate technology options from the cost and other benefits that can arise at the stack level. After thorough deliberations, the team ruled out Novell GroupWise as an option because of substantial investments in user and IT skills.

Further, the team narrowed its decision to fresh deployment of Microsoft Exchange versus continuation of Lotus Notes 6.5 or later. After a detailed evaluation, the team decided to replace IBM Lotus Notes 6.5 with Microsoft Exchange.

Radhakrishnan explained and said, “We had an enterprise agreement (EA) with Microsoft covering about 1,137 Windows machines, 435 MS Office and other licenses such as SharePoint, EPM, ERP and Active Directory for managing user rights and authentication.

Moving to Microsoft exchange would require Biocon to purchase ‘only’ additional Mail Client and Exchange licenses thereby saving a significant chunk of money—Biocon could avoid purchasing/upgrading 2,200 IBM Lotus Notes user licenses, additional servers and the cost of supporting clients.”

The functionality and user interface of Microsoft Exchange

was much higher than Lotus Notes 6.5 and later versions, thus requiring no additional IT manpower to support the increasing users. Biocon had required Lotus Notes certified trained personnel to configure client node for each user and for server administration adding to the cost, mentioned Radhakrishnan.

Users who had tested Microsoft Exchange enabled push mail were happy and willing to move over from expensive BlackBerry national roaming plan to push mail service, thus saving cost.

Additionally, Biocon was looking for an easy integration of Office Communication Server and Live Meeting with Exchange Server to increase productivity and reduce traveling. While IBM Lotus Notes offers similar functionality, the team suffered with integration issues.

Smooth migration process

Biocon planned a Proof-of-Concept for readiness before migrating to Exchange Server. In May 2008, the migration to Microsoft Exchange began with a team consisting of the internal IT team and Wipro personnel. A two-phased roll out strategy was adopted, with core users moving first and then others. In July 2008, it used a third party migration tool from Quest for migration and completed the project well ahead of the scheduled—on August 15, 2008 as against the August 31, 2008 deadline, with minimal downtime. Radhakrishnan added that during the migration, they had 1,500 users and the migration was smooth. Today, about 2,200 users across various departments use Microsoft Exchange as the core messaging and groupware application.

Techno-commercial benefits

By migrating to Microsoft Exchange from IBM Lotus Notes 6.5, Biocon now enjoys many techno-commercial benefits. By consolidating the enterprise stack on Microsoft technologies, including Exchange, Microsoft operating systems, SharePoint and EPM, Biocon has leveraged its existing investments in Microsoft Enterprise agreement while avoiding substantial license fee of IBM Lotus Notes. Browne & Mohan, a management consulting firm providing advice on strategy, transactional services (M&A), operations, marketing and technology, got the detailing done for migration from Lotus Notes to Exchange Server and presented the end benefits. Browne & Mohan calculated a three-year TCO for both IBM Lotus Notes 6.5 and Microsoft Exchange 2007 for a user base of 2,000. They used Helfert (2001), present value-based management (VBM) approach to calculate the RoI.

As per their report, the three-year TCO of Microsoft Exchange was Rs 603.5 lakhs while that of IBM Lotus Notes was Rs 966.5 lakhs. Additionally, the RoI on Microsoft Exchange 2007 was 56% with a payback period of 1 year 9 months. The report pointed out that Biocon achieved a quick RoI, benefited from an integrated Microsoft Stack and avoided substantial license fee, upgrades and IT support costs.

The RoI story

To calculate the RoI, Radhakrishnan said, “We looked at a three-year investment scenario where Microsoft Exchange 2007 project with certain costs has both direct and indirect savings.” Direct benefits include IBM Lotus Notes 6.5 software license cost, hardware cost, and savings in telecom costs because of shift to push mail from Blackberry national

roaming services. Indirect benefits include the savings in time (and therefore cost) of configuration of client, new user training, and IT manpower for support and maintenance. Considering the cost of capital at 14%, the total direct saving for a three year horizon is Rs 544 lakhs, and total indirect saving is Rs 94 lakhs. Microsoft Exchange 2007 project RoI was 56%, with net cash flows after taxes at Rs 122 lakhs for a three-year period.

Lower TCO

For calculating the TCO, Browne & Mohan included hardware, software license cost, along with implementation, maintenance, support and training costs. For maintenance and support, cost of senior, middle and junior IT professionals, the actual CTC was used.

The TCO of Microsoft Exchange 2007 worked out to be 38% lower than IBM Lotus Notes, even if one considers cost of implementation. Microsoft Exchange 2007 scores not just because of low capex, but also low maintenance and support costs. This gain for Biocon is particular because of integration benefits of standardizing on Microsoft platform.

Indirect benefits

There were some indirect benefits. It reduced configuration cost by 55% and user training cost by 83%. Further, the improved use of collaboration and messaging tools increased employee productivity by 20%.

Radhakrishnan said, “Microsoft Exchange Server has given a new brand image for the company as 600 field staff use it for their emails.” Additionally, employees within the company can make use of the Web-based access for sharing calendar and scheduling of events without training. He added, “Since we abide by the strict regulatory and compliance bodies and policies, and as we deal with intellectual property, we were not allowed to consider Yahoo Messenger or Google chat for instant messaging and emails. Today different employees across cities can make use of secured instant messaging for chat. Select executives can make use of the Office Communication Server and Live Meeting for voice/video calls.”

Biocon has used an Intel Xeon-based blade server from HP ProLiant BL 680c for Microsoft Exchange Server 2007 deployment in cluster mode and the failover is planned using HP BL 680c server.

akhtar.pasha@expressindia.com