Changhong Group Effectively Consolidates CRM Systems with Red Hat Enterprise Virtualization

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August 2, 2011

Customer: Changhong Group, Sichuan

Industry: Manufacturing
Geography: APAC
Country: China


Business Challenge:

To improve the service level consistency and operational efficiency of the overall corporate customer relationship management (CRM) process by replacing 31 regional implementations with a single nationwide deployment

Solution:

Red Hat® Enterprise Virtualization to consolidate, manage, and support the assortment of CRM systems that service all 31 customer regions

Software:

Red Hat Enterprise Virtualization, Red Hat Enterprise Linux®, Microsoft Windows 2003, Microsoft Windows 2008, Novell SUSE 10, SUSE 11

Hardware:

Three Dell PowerEdge R910 four-way server with EMC CX4-240 storage array with fibre channel interface

Benefits:

Reduced costs by using fewer physical servers; improved manageability and productivity of IT staff; increased server utilization and flexibility of resource allocation; achieved a more consistent CRM process execution; and gained capability to easily expand to meet future demand

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Background:

Established in 1958, Sichuan Changhong Electric Co., Ltd. is a comprehensive multinational corporation involved in research and development, manufacturing, and sales of several products, including television, air conditioning, telecommunications, small household appliances, and video systems. With more than 20,000 sales and service outlets available worldwide, Changhong Group was ranked first in China’s domestic market for 15 consecutive years. With one out of every four TVs in China manufactured by the Changhong Group, the company has been given several accolades, including an award for the biggest color-TV customer base in China. In addition, since 2005, the company has been listed in the Global Fortune 500.

Business Challenge:

Among appliance enterprises in China, Changhong Group has accelerated its IT construction in the past several years with a total investment of more than one-third of a billion yuan (US $45 million). The company has created a manufacturing information system framework focused on its enterprise resource planning (ERP) and product data management (PDM) systems. In doing so, the company has realized normalization of the group’s modern management rules and processes, while improving its operational efficiency, delivering fast response to user demands, and improving its core competency. In addition to improving management and efficiency, Changhong Group’s IT construction provides an effective vehicle for recreation of its new enterprise culture.

As these IT projects progressed, Changhong Group began a new initiative focusing on the consolidation of its previous customer relationship management (CRM) database, which includes information on its direct-selling agents covering 31 regions in locations where Changhong Group’s subsidiaries are located. The implementation of this project will help the company conduct important business functions, such as unified deployment, monitoring, and management of its CRM. To make sure the project was successfully executed, Changhong Group designated Changhong Software, Inc. (referred to as Hongxin Software externally) to undertake the project’s overall planning, solution testing, and feasibility analysis.

In order for this project to be successful, all 31 of Changhong Group’s regions need to concentrate and consolidate their existing CRM systems due to various operating systems and versions, which included Windows 2003, Windows 2008, and Red Hat Enterprise Linux 5. The purchase of new servers for one-to-one installation and deployment would produce not only high costs, but it would also be very difficult to manage. In addition, most of the recent servers available were expected to cause compatibility problems in support of Changhong Group’s previous operating systems.

Changhong Group understood that mature virtualization technology was the key to its current project’s demands. In the beginning, VMware Vsphere 4 Enterprise Virtualization Platform appeared to be an optimal choice. However, the Hongxin Software project team raised internal concerns with VMware’s solution. First, the VMware Vsphere 4 virtualization environment would incur high costs in software and service purchasing. But most importantly, Changhong Group uncovered that the company’s past experiences with VMware illustrated that when its IT solutions were tied up by an application manufacturer, either prices or solutions thereafter would be dominated by the manufacturer, and the true users would lose control over the final solutions. Furthermore, one more virtualization hardware server for a horizontal extension would incur the cost of a new license, creating concerns for the Hongxin Software project team.

With today’s virtualization technology maturing, the project team reviewed additional technology providers’ virtualization solutions. Citrix Xen, Microsoft Hyper-V, Red Hat Enterprise Virtualization, in addition to VMware and other mature virtualization technologies, including in-use and upcoming successful cases, bolstered the confidence of the Hongxin CRM project team during the review process.

Solution:

After an in-depth analysis on various virtualization solutions’ feasibility and return on invest (ROI), Changhong Group compared virtualization technology from VMware, Citrix, and Red Hat. With the company’s key criteria, including successful cases of comprehensive input costs, overall ease of management, software/hardware compatibility, and operating system support, Changhong Group selected Red Hat Enterprise Virtualization.

The company installed Red Hat Enterprise Virtualization software on Dell PowerEdge R910 four-socket servers interfaced to EMC CX4-240 storage arrays using the fibre channel protocol. The installation consists of three servers, each running the Red Hat Enterprise Virtualization Hypervisor, and supporting 31 virtual machines (VMs). Each VM is configured with a version of either Windows Server 2003, Windows 2008, or Red Hat Enterprise Linux and is running one the CRM applications supporting a particular region. Red Hat Enterprise Virtualization Manager, the centralized graphical management console, is used to handle all virtualization management activities, such as configuration and monitoring, live migration, VM templating, load balancing, and high availability.

The company decided to partner with Red Hat based on its mature and stable core virtualization technology. In addition, Red Hat Enterprise Virtualization Manager can successfully meet Changhong Group’s demands while providing a flexible and easy deployment. Also, the choice to partner with Red Hat was an easy decision for the Changhong Group, considering the strong software and hardware platform compatibility between Red Hat Enterprise Virtualization and Red Hat Enterprise Linux, which eliminates the company’s concerns regarding compatibility.

Given the original manufacturers’ technology implementation guarantee and reliability during an earlier project period, Changhong Group was prone to on-site installation and support service by the Red Hat Consulting team. The Red Hat Enterprise Virtualization management platform will save Changhong Group costs for VC administration terminals that would have occurred before.

Changhong Group noted that they had full confidence in Red Hat Enterprise Virtualization and the KVM platform. The company also noted that new features and technologies on the horizon for the platform will continue to make it stronger. Changhong Group values Red Hat’s unique open source commercial model, which is based on subscriptions and related support. The earliest traditional licensing methods, such as those first introduced to China by technology vendors such as Microsoft, restricted Changhong Group’s selection of software and demand for services. Therefore, they appreciate Red Hat’s open, flexible model.

Benefits:

As Changhong Group completed its overall virtualization deployment project, the outcome has exceeded its previous solution’s benefits and has fully met its overall expectations and objectives. Even though the 31 regional agents across China have selected different CRM systems at different time periods, and the overall environment has heterogeneous operating systems, Red Hat’s virtualization technology has made the deployments much easier to manage.

From a pricing and economic perspective, the company found that since the Red Hat solution is based on Linux and open source and is available through a subscription model, Red Hat Enterprise Virtualization offers significant cost and total cost of ownership advantages when compared to other proprietary virtualization solutions. In this particular deployment, the Red Hat solution was less than half the cost of a similarly configured VMware solution.

With the help of Red Hat Consulting, Changhong migrated an original PC for an administration terminal based on Red Hat Enterprise Virtualization to an R910 physical server, so as to build a guest operating system. By using Red Hat Enterprise Virtualization Manager, many features can be perfectly realized, including monitoring, change, and migration of hardware resources as well as monitoring, deployment, change, and migration of virtual machine resources.

In the end, the consolidation project for Changhong’s 31 regional CRM systems conducted by Hongxin Software has been completed with success. By selecting Red Hat Enterprise Virtualization for this project, the company has gained a new generation of kernel-based virtualization technology with KVM, backed by Red Hat’s strong brand power and deep technology capabilities. In addition, the technology is expected to maximize the company’s requirements for elastic customization and on-demand expansion of its own solutions and services by eliminating forceful license limitation.

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