Bank of New Zealand Reduces Carbon Footprint with Red Hat on the Mainframe

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February 3, 2009

Customer: Bark of New Zealand

Geography: APAC
Country: New Zealand

Business Challenge:

Address environmental and space issues in the datacentre and achieve the corporate goal of becoming carbon neutral by 2010

Migration Path:

From distributed Intel and SUN SPARC servers to Red Hat Enterprise Linux 5 running under z/VM on IBM z9 and z10 mainframes


Red Hat Enterprise Linux 5, Red Hat Network (RHN) Satellite, Oracle database, WebSphere Application Server, ESB, Process Server, TX and MQ


1x IBM z9 and 1x IBM z10 mainframe (with 3 x IFL engines in each)


Recovered 30 percent of datacenter floor space Reduced power consumption by 38 percent 20 percent return on investment (ROI) over the life of the platform Simplified, more efficient deployment


For the last 150 years, BNZ (Bank of New Zealand), a subsidiary of the National Australia Bank Group, has helped individuals, farmers and businesses with their financial pursuits. Throughout this time, BNZ has evolved to meet changing customer needs and expectations, while continuing to deliver innovative new products and services. BNZ is focused on empowering its customers and prides itself on its flexibility, innovation, and corporate responsibility. It is also leading the New Zealand banking and finance industry in developing, and benefiting from, a more energy efficient, and#x2018;greenand#x2019; IT operation.

Business Challenge:

Like a large number of businesses in New Zealand and around the world, BNZ was close to reaching capacity in its datacenter and needed to determine how to maximise space while keeping costs down.

The bank’s corporate values also have a carbon neutral focus, which it was keen to put into practice across all aspects of its business operations.

“The issues we were dealing with were not necessarily unique, but a reflection of the current business climate,” said Lyle Johnston, Infrastructure Architect for BNZ.

“BNZ had defined two important goals for the future, both of which relied heavily on IT. The first was for the organisation to become carbon neutral by 2010 and the second was to explore open source opportunities though the adoption of Linux.”

Another challenge BNZ faced was to create a disaster recovery solution. Its datacentres – one in Auckland, New Zealand and the other in East Melbourne, Australia – are separated by the Tasman Sea.


In mid 2007, BNZ embarked on a bold mission to realise its corporate objectives. It overhauled its mission-critical front-end IT environment, including its Internet banking and bank teller functions through to core backend data. It migrated its systems to Red Hat Enterprise Linux 5 running under z/VM on the mainframe.

BNZ purchased one IBM z10 system for use in production, as well as one IBM z9 system for use as a disaster recovery machine. Both mainframes exclusively run Red Hat Enterprise Linux 5, IBM WebSphere application and IBM Process server, along with customised JAVA applications written by BNZ. Combined, these power BNZ’s customer facing banking systems, including Internet banking and teller platforms.

The combination of z/VM and Red Hat Enterprise Linux 5 enabled BNZ to virtualise and consolidate a largely distributed SUN environment, which incorporates all of its front-end systems, down to just one box and run it in a manner that didn’t present a significant change for administration staff.

A critical component in the successful deployment and ongoing management of its new systems, BNZ also incorporated Red Hat Network (RHN) Satellite. RHN Satellite provides BNZ with the ability to combine provisioning, updating, patching and maintenance into a single function for greater simplification. By utilising RHN Satellite, the bank was able to re-provision its entire Teller platform development environment in approximately two hours.

“When it came to selecting a Linux provider, the choice to invest in Red Hat was largely based on its commitment to the ongoing development of the platform and its strong support capabilities, particularly in reference to supporting Red Hat Enterprise Linux on the mainframe,” said Johnston.

BNZ’s first production load on the new system went live in August 2008, with high visibility across the organisation.

“Deploying IBM mainframes with Red Hat Enterprise Linux to address our carbon footprint and cost saving concerns was a very big deal, especially at the senior management level. It provided us with the opportunity to take a very serious leap into Linux, and that was exciting for everyone in IT and beyond,” said Johnston.

To date, the bank has consolidated 131 SUN SPARC systems to Red Hat Enterprise Linux on IBM System z. These systems include v440s, v280Rs and E10Ks on the high-end.


While a move to Linux on the mainframe represented a major shift from traditional banking systems, for BNZ the migration to Red Hat Enterprise Linux on IBM System z platforms produced impressive returns and exceeded expectations.

After just three months the project was ahead of schedule and on budget, and BNZ was already able to consolidate its servers and reduce its front-end systems datacenter footprint by 30 percent. Even in the project’s early days, the bank noted significant cost advantages with approximately 20 percent ROI expected over the life of the platform.

According to Johnston, “We have also managed to substantially reduce our front-end power consumption by nearly 40 percent, which means we were well and truly on our way to becoming carbon neutral by our 2010 goal.”

In fact, since migrating to Red Hat Enterprise Linux on IBM mainframes, BNZ has recorded a 33 percent reduction in heat output and a 39 percent reduction in carbon dioxide emissions, for its front-end systems.

The new virtualised platform has also boosted the speed and simplicity of new deployments. Instead of taking days, a new environment can be deployed in just minutes. Furthermore, with just one administrator needed per 100 virtual servers, BNZ can save on resources traditionally used to manage the platform, freeing them up to work on new innovative projects.

BNZ’s industry-leading move to Red Hat Enterprise Linux has attracted plenty of attention, with a number of banking counterparts monitoring BNZ’s performance benchmarks with great interest.

“The fact is there are a lot of reasons to consolidate with Red Hat on the mainframe and as we were the first in New Zealand to do it, it has attracted a lot of interest from the banking world,” said Johnston.

Looking forward, BNZ has adopted a long-term, strategic view of how Red Hat Enterprise Linux will continue to deliver value.

“What’s been truly remarkable has been the fact that introducing Red Hat Enterprise Linux into the organisation has breathed new enthusiasm and new life into the business and the people behind it,” said Johnston.

“This project has been a type of gateway for us, and working with Red Hat has opened our eyes to what’s possible with open source. From our perspective, the best is yet to come.”

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