Co-op cuts Microsoft licensing bills by £1.5m

The Co-op has shaved £1.5m off its software licensing bill by centralising on a single version of SQL Server 2008 at its head office, and cut a further £500,000 off hardware upgrade and maintenance costs by using thin clients instead of PCs in its stores.

The retailer has replaced multiple instances of SQL Server 2005 licenses running at 800 pharmacy stores with a single copy of the database server that delivers its InControl Evolution store management and electronic point of sale (EPOS) application to each retail outlet.

"We started to centralise our infrastructure about two years ago, when we were really very much focussed around local versions of SQL Server," said Co-op development manager, Lawrence Freeman. "There were a number of enablers, one being the better reliability of DSL networks, but also a shift to service orientated architecture (SOA) that has given us the platform to support remote application delivery and a move away from fat client PCs."

The Co-op has so far only totted up software licensing savings from the SQL Server 2008 deployment – Freeman says it has not yet taken into account associated savings on Windows Server operating system (OS) licensing.

"This means we do not have to buy a server OS product for in-store deployment, and getting a desktop version of Vista instead is getting on for a fifth of the price of a Windows Server 2003 equivalent," he said.

Microsoft spokesperson David Hobbs-Mallyon denied that the software vendor had cut any special deal with the Co-op, which has effectively ceased to pay for 799 SQL Server 2008 licenses.

"It would depend on what licensing model that the Co-op was previously using, but a saving of £1,877 per site is in the right ball park [for a standard licensing package]," he said.

"Microsoft is putting more and more features into SQL Server 2008 to make that product more suitable for customers looking to consolidate their infrastructure, like high availability, database mirroring and backup improvements, which many other vendors charge for via additional products."

The Co-op's centralised application architecture also allows thin client computers to be used instead of PCs at many of its branches. This has already reduced overall hardware costs by up to £500,000 when both the initial purchase price and ongoing maintenance charges for PCs and servers at individual shops are taken into account.

"If you are supporting back office operations with a specific system, you have to buy a certain specification, perhaps with RAID arrays and redundancy features, which can cost about £4,000 a piece," said Freeman. "And now we can just buy a workstation equivalent to a desktop PC that costs around £400, and there is a similar percentage reduction in ongoing maintenance costs."

As well as being cheaper to buy and run, Freeman estimates that thin clients will need to be upgraded less often because local application processing workloads are reduced.

"You usually need additional hardware capabilities to support new software, but because we are now deploying applications from the centre, we are no longer in that rat race where we have to worry when performance requirements will tip the balance of the server's capabilities and force an upgrade," said Freeman.

Despite the downgrading of local in store hardware specifications, the Co-op says that the SQL Server 2008 upgrade has significantly improved the performance of both the mission critical InControl Evolution application and other operational processes.

"When you go to a centralised model, you need to have reliable and robust architecture because you are going to from 800 points of failure to one single point of failure," he said. "Therefore robust backups are very important to us, and with SQL Server 2005 we were struggling to get those to complete within the required four hour window – now they take four minutes."