Queensbury Union Free School District

O FFICE OF THE NEW YORK STATE COMPTROLLER DIVISION OF LOCAL GOVERNMENT & SCHOOL ACCOUNTABILITY Queensbury Union Free School District Server Virtualization Technology Report of Examination Period Covered: July 1, 2010 June 30, 2011 2012M-10 Thomas P. DiNapoli

Table of Contents AUTHORITY LETTER 2 Page INTRODUCTION 3 Background 3 Objective 4 Scope and Methodology 4 Comments of District Officials and Corrective Action 4 VIRTUAL SERVERS 6 Recommendation 8 APPENDIX A Response From District Officials 9 APPENDIX B Audit Methodology and Standards 11 APPENDIX C How to Obtain Additional Copies of the Report 13 APPENDIX D Local Regional Office Listing 14 DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 11

State of New York Division of Local Government and School Accountability May 2012 Dear School District Officials: One of the s primary objectives is to identify areas where local government officials can improve their operations and provide guidance and services that will assist them in making those improvements. Our goals are to develop and promote short-term and longterm strategies to enable and encourage local government officials to reduce costs, improve service delivery, and to account for and protect their entity s assets. Following is a report of our audit of the Queensbury Union Free School District, entitled Server Virtualization Technology. This audit was conducted pursuant to Article V, Section 1 of the State Constitution and the State Comptroller s authority as set forth in Article 3 of the General Municipal Law. This audit s results and recommendations are resources for district officials to use in effectively managing operations and in meeting the expectations of their constituents. If you have questions about this report, please feel free to contact the local regional office for your county, as listed at the end of this report. Respectfully submitted, Offi ce of the State Comptroller Division of Local Government and School Accountability 2 OFFICE OF THE NEW YORK STATE COMPTROLLER

Introduction Background The Queensbury Union Free School District (District) is located in the Town of Queensbury in Warren County and is governed by a ninemember Board of Education (Board). The District has seven buildings 1 in operation. District enrollment is approximately 3,750 students. The District s 2010-11 budget was approximately $53.4 million, of which $693,000 was for information technology. The District currently has 12 physical servers, three of which are virtual host servers that host 26 different virtual servers 2 (virtual machines). In most common use, a server is a physical computer (a hardware system) dedicated to serving other computers by running one or more services to meet the needs of users of the other computers on the network. Depending on the computing service that it offers, it could be a database server, file server, mail server, print server, web server, or other. In general, most school districts utilize a client/server computer network configuration to handle the essential services of daily operation. This type of network works by allowing the end user (the client) to make requests of a server or host computer. In turn, the server performs some computational task on behalf of the client and sends the results to the client s computer. Due to the fact that servers are generally always powered on and require a significant amount of energy to operate and cool, energy costs to a district can be substantial. In addition, the equipment replacement costs of many physical servers can be expensive. Server virtualization is a cost savings alternative that may be beneficial to many districts. In a traditional server approach, each server is a separate physical device that functions independently, providing services to a district s clients (students and staff). Using virtualization technology, the independent physical servers can be virtualized and consolidated onto host (physical) servers. Multiple physical servers can be replaced by significantly fewer host servers. The New York State Energy Research and Development Authority contends that virtualization has enormous potential to reduce energy consumption. Reducing physical servers can generate cost savings for 1 Four school buildings, administration building, buildings and grounds building, and transportation building 2 One of the 26 virtual machines manages the virtualization software and would not exist in a purely physical server environment. DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 33

school districts in energy, equipment, and maintenance savings. The energy savings are achieved through operating and cooling savings because there are not as many servers to power and cool. Equipment and maintenance savings are achieved because there is a reduced number of servers to purchase and maintain. In addition to the cost savings, by not having as many servers, a district does not have to dispose of as many servers, which is more environmentally friendly. Objective The objective of our audit was to determine the potential cost savings related to the implementation of server virtualization. Our audit addressed the following related question: Has the District realized cost savings by implementing a virtual server environment? Scope and Methodology We examined the technology plan, server inventory, and relevant cash disbursements of the Queensbury Union Free School District for the period July 1, 2010 to June 30, 2011. We extended our scope to include dates from July 1, 2007 for the purpose of gathering historical cost data to make cost comparisons. We also extended our scope to cover June 30, 2012 for the purpose of calculating potential cost savings. We interviewed various staff from the Department of Instructional Technology to determine the District s IT environment and server specifications. We also examined the District s electricity bills to determine the average cost per kilowatt-hour of electricity. Our audit procedures also included steps to determine if the District was saving costs by implementing a virtual server environment. We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). More information on such standards and the methodology used in performing this audit is included in Appendix B of this report. Comments of District Officials and Corrective Action The results of our audit and recommendation have been discussed with District officials and their comments, which appear in Appendix A, have been considered in preparing this report. District officials generally agreed with our audit findings and indicated that they will continue to use virtual technology. 4 OFFICE OF THE NEW YORK STATE COMPTROLLER The Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General Municipal Law, Section 2116-a (3)(c) of the Education Law, and Section 170.12 of the Regulations of the Commissioner of Education, a written corrective action plan (CAP) that addresses the findings and recommendations in this report must be prepared and forwarded to our office within 90 days. To the extent practicable, implementation of the CAP must begin by the end of the next fiscal year. For more information on preparing and filing

your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. The Board should make the CAP available for public review in the District Clerk s office. DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 55

Virtual Servers School districts are responsible for providing educational services in the most cost effective manner. It is essential for school districts to actively seek opportunities for providing the same level of services at lower costs. School districts also are responsible for minimizing utility expenditures. These objectives can be achieved by implementing cost saving opportunities that arise from emerging technologies that have equal or greater capabilities. The District currently uses a virtual configuration for most of its server needs. There are 12 physical servers at the District. Of those 12, there are three virtual host servers that host 26 different virtual machines. By changing its server set up, the District was able to realize almost $98,000 3 in cost savings over its five-year replacement 4 period for its computer resources. According to District officials, each year of the replacement period is devoted to replacing the technology equipment in one of the four District school buildings. The fifth year of the cycle is devoted to infrastructure upgrades. Officials indicated they plan to replace all of the District s servers in that year. The District began the server virtualization process in 2008. It purchased two host servers and virtualized 15 servers, which eliminated the need to purchase physical servers. That same year, the District also purchased a storage area network (SAN) to act as storage for the virtual server farm. According to District officials, this is necessary for the virtualization process. In 2009, the District converted an additional 10 servers and purchased another host server to handle the new workload. In 2010, the District did not purchase any additional equipment. In 2011, to increase storage and provide a backup to the original SAN in the event that the first one failed, the District purchased an additional SAN. We compared the costs the District incurred to implement the virtual servers to the estimated costs if it had instead purchased and run 25 servers over this period of time. 5 6 OFFICE OF THE NEW YORK STATE COMPTROLLER 3 This number does not include potential savings in maintenance and repair costs. District officials were unable to provide data to allow for cost savings because the District does not track time spent on server repairs and maintenance. 4 Per District officials, the District plans to replace servers every five years. This cost savings assumes a load of 75 percent of the average load balance calculated. The load of the server depends on the number of the applications running. 5 The District currently runs 26 virtual machines on its three virtual host servers. One of the applications would not be needed if the District converted to a physical server environment; therefore, we calculated cost comparisons by using 25 servers instead of 26.

By switching to virtual servers, the District has reduced its equipment and energy costs as follows: Equipment The District spent almost $121,500 on virtual servers and related equipment 6 from 2008 until present. 7 If the District had purchased traditional servers, we estimate the District would have spent $91,600. This resulted in an excess cost of $29,900 to the District by purchasing virtual servers over the five-year replacement cycle. Had the District not purchased the additional SAN at a cost of about $44,500 in 2011, the District could have realized equipment savings of $14,600 by purchasing virtual servers over the five-year period. Energy The cost to the District to power and cool the virtual server network was about $30,800 over five years, compared to an estimated $158,700 if the District had powered all physical servers over the same period. Based on calculations that assume the District used 75 percent of the stated wattage per the equipment s product specifications rate, the District would have saved approximately $127,900 over five years, or $25,580 annually in energy costs. 8 This is equal to a total of 852,667 kilowatt-hours (kwh), or 170,533 kwh per year. If the servers ran at 100 percent of the stated product wattage, the District could have saved approximately $170,500 (1,136,667 kwh) or $34,100 (227,333 kwh) annually. If the servers ran at 50 percent of the stated product wattage, the District could have saved about $85,250 (568,333 kwh) or $17,050 (113,667 kwh) annually. Maintenance and Repair Costs District officials told us that they do not track time spent on the installation and maintenance of servers. However, because the District does not have as many servers to maintain, it has achieved additional savings because it has had to purchase fewer replacement parts, and spend less time to set up, repair, or update the servers. This category of cost savings is not shown on the table below because District officials could not provide us with information to quantify the savings. 6 Related equipment includes the software, installation, support and storage of all things necessary to achieve virtualization. 7 District officials did not anticipate any additional purchases in 2012. Therefore, we did not include any equipment costs in our calculations for 2012. 8 This assumes that the servers and all related equipment are running 24 hours a day, every day of the year and are using 75 percent of the stated wattage per the equipment s product specifications. In addition, we assume a 1:1 ratio to power and cool the servers. We used the average cost per kilowatt-hour for the District for the last consecutive 12 months to calculate savings. That amount was equal to $0.15 per kilowatt-hour. DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 77

Based on a 75 percent energy consumption rate and including the purchase of the second SAN, the District saved approximately $98,000, as illustrated in the table below: Traditional Servers Virtual Servers Annual Savings Table 1: Estimated Cost Savings Achieved by Virtualization 2008 2009 2010 2011 2012 Totals Equipment Costs $55,100 $36,500 - - - $91,600 Energy Costs $20,700 $34,500 $34,500 $34,500 $34,500 $158,700 Equipment Costs $50,500 $19,800 - $51,200 - $121,500 Energy Costs $4,000 $5,500 $5,500 $7,900 $7,900 $30,800 Equipment Savings $4,600 $16,700 - ($51,200) - ($29,900) Energy Savings $16,700 $29,000 $29,000 $26,600 $26,600 $127,900 Total Savings $21,300 $45,700 $29,000 ($24,600) $26,600 $98,000 The District also is being more environmentally friendly by using less energy and purchasing fewer servers to dispose of at the end of their lives. Based on the United States Environmental Protection Agency s Report to Congress on Server and Data Center Energy Efficiency concerning the Energy Star Program, there is an increase in electric companies offering rebates to school districts that use virtualization, which could result in even more energy savings. Another benefit of using virtual servers is that they may free up some space that the District could use for other purposes. The energy savings and the reduction in server waste are good for the environment and good models for educating students on environmental issues. Recommendation 1. The Board should continue to invest in virtual servers. 8 OFFICE OF THE NEW YORK STATE COMPTROLLER

APPENDIX A RESPONSE FROM DISTRICT OFFICIALS The District officials response to this audit can be found on the following page. DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 99

10 OFFICE OF THE NEW YORK STATE COMPTROLLER

APPENDIX B AUDIT METHODOLOGY AND STANDARDS During this audit, we examined the District s records for the period July 1, 2010 to June 30, 2011. Our goal was to determine if there were any potential cost savings related to the implementation of server virtualization and, if so, whether school districts could achieve cost savings by implementing server virtualization. To determine the District s IT server environment, we reviewed and discussed the District s technology plan with District officials. To determine the status of virtual servers, we had discussions with District officials and inquired about any cost savings related to using virtual servers. To determine the inventory of the servers, we obtained inventory reports. From the reports, we determined the make and model of the servers, the type of a server (physical or virtual), and the count of each server. We further tested the inventory reports to the actual asset to determine if the report was accurate. To determine cost savings, we first determined the replacement cycle of the servers through discussions with District officials. To determine the energy costs of the servers, we obtained electricity bills from the District for 12 consecutive months from July 2010 to June 2011 to determine the average cost per kilowatthour to the District. To determine the energy requirements for the servers, we obtained specifications from the server manufacturer s website. To calculate the energy savings, we divided the energy usage per specifications by 1,000 to give us a kilowatt of usage (specifications were in watts). We then took the kilowatts and multiplied them by 365 (days in a year) and by 24 (hours in a day) to get the number of kilowatt-hours in a year. We then took the average energy cost, in cost per kilowatt-hours, and multiplied by energy usage in kilowatt-hours to get an annual cost of electricity. This represents powering the server for the year. We assumed that the same power would be required to cool the server; therefore, for total energy, the annual energy would be double our calculated energy usage. We projected the energy cost over three server loads 100 percent, 75 percent, and 50 percent. Using the same methodology above for the energy costs, we determined the number of physical servers needed if the District switched back to a physical server configuration. We inquired with District officials to determine what make and model server would have likely been purchased in 2008 and 2009. We obtained specifications for the server to determine the energy specifications of the physical server. DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 1111

Through discussions with District officials and review of related documentation, we determined the cost of switching to a physical server configuration by obtaining specifications needed to run the physical servers. Using invoices provided by the District, we obtained the price of a non-virtualized host server in 2006 and 2011. We then used those amounts to generate the estimated cost in 2008 and 2009. We used that estimated cost to calculate the estimated equipment costs in both years. Through discussions with District officials and review of related invoices, we obtained the cost of the virtual servers, including support, storage, software, and installation costs. We compared the two costs the get the estimated equipment cost savings. We conducted this performance audit in accordance with generally accepted government auditing standards (GAGAS). Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. 12 OFFICE OF THE NEW YORK STATE COMPTROLLER

APPENDIX C HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT To obtain copies of this report, write or visit our web page: Public Information Office 110 State Street, 15th Floor Albany, New York 12236 (518) 474-4015 http://www.osc.state.ny.us/localgov/ DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY 13

APPENDIX D OFFICE OF THE STATE COMPTROLLER DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY Steven J. Hancox, Deputy Comptroller Nathaalie N. Carey, Assistant Comptroller LOCAL REGIONAL OFFICE LISTING BINGHAMTON REGIONAL OFFICE H. Todd Eames, Chief Examiner State Office Building - Suite 1702 44 Hawley Street Binghamton, New York 13901-4417 (607) 721-8306 Fax (607) 721-8313 Email: Muni-Binghamton@osc.state.ny.us Serving: Broome, Chenango, Cortland, Delaware, Otsego, Schoharie, Sullivan, Tioga, Tompkins Counties BUFFALO REGIONAL OFFICE Robert Meller, Chief Examiner 295 Main Street, Suite 1032 Buffalo, New York 14203-2510 (716) 847-3647 Fax (716) 847-3643 Email: Muni-Buffalo@osc.state.ny.us Serving: Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans, Wyoming Counties NEWBURGH REGIONAL OFFICE Christopher Ellis, Chief Examiner 33 Airport Center Drive, Suite 103 New Windsor, New York 12553-4725 (845) 567-0858 Fax (845) 567-0080 Email: Muni-Newburgh@osc.state.ny.us Serving: Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Ulster, Westchester Counties ROCHESTER REGIONAL OFFICE Edward V. Grant, Jr., Chief Examiner The Powers Building 16 West Main Street Suite 522 Rochester, New York 14614-1608 (585) 454-2460 Fax (585) 454-3545 Email: Muni-Rochester@osc.state.ny.us Serving: Cayuga, Chemung, Livingston, Monroe, Ontario, Schuyler, Seneca, Steuben, Wayne, Yates Counties GLENS FALLS REGIONAL OFFICE Jeffrey P. Leonard, Chief Examiner One Broad Street Plaza Glens Falls, New York 12801-4396 (518) 793-0057 Fax (518) 793-5797 Email: Muni-GlensFalls@osc.state.ny.us Serving: Albany, Clinton, Essex, Franklin, Fulton, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Warren, Washington Counties SYRACUSE REGIONAL OFFICE Rebecca Wilcox, Chief Examiner State Office Building, Room 409 333 E. Washington Street Syracuse, New York 13202-1428 (315) 428-4192 Fax (315) 426-2119 Email: Muni-Syracuse@osc.state.ny.us Serving: Herkimer, Jefferson, Lewis, Madison, Oneida, Onondaga, Oswego, St. Lawrence Counties HAUPPAUGE REGIONAL OFFICE Ira McCracken, Chief Examiner NYS Office Building, Room 3A10 Veterans Memorial Highway Hauppauge, New York 11788-5533 (631) 952-6534 Fax (631) 952-6530 Email: Muni-Hauppauge@osc.state.ny.us STATEWIDE AND REGIONAL PROJECTS Ann C. Singer, Chief Examiner State Office Building - Suite 1702 44 Hawley Street Binghamton, New York 13901-4417 (607) 721-8306 Fax (607) 721-8313 Serving: Nassau and Suffolk Counties 14 OFFICE OF THE NEW YORK STATE COMPTROLLER