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Good, Fast, and Cost Effective Priceline Tries to Do All Three. Ron Rose Chief Information Officer SIM CT Chapter April 10, 2003. Priceline’s Speed and Execution The Data Center Operating System Web Services (Good News, Bad News) Technological Excellence Portfolio Management

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Good, Fast, and Cost Effective Priceline Tries to Do All Three

Ron Rose

Chief Information Officer

SIM CT Chapter

April 10, 2003

Priceline’s Speed and Execution

The Data Center Operating System

Web Services (Good News, Bad News)

Technological Excellence

Portfolio Management

Expense Reduction Steps

Offshore Lessons

IT Goals Framework

the n tier ecosystem challenge
Hundreds of Boxes

Separate Operating Systems

Multiple Tiers

Multiple Security Architectures

No control of objects among the tiers

No synchronization of the object/database interface

Very difficult diagnostics between tiers

Usually different monitoring tools among tiers

Intra-tier failures and the correlation among them is problematic

No synchronized software distribution among tiers

No synchronized rollback and recovery among tiers

Configuration management among architectures is problematic

In other words, if this was sold as one product, no CIO would buy it!

The N-Tier Ecosystem Challenge
the data center operating system
Diagnostic and Alerting

(Wily, Xtremesoft, BMC, Relicore, etc.)

Configuration Enforcement

(Bladelogic, Altiris, etc.)

Management Tool Integration

(HyperNOC, Netuitive, etc.)

Transaction Integrity (Bristol, etc.)

Software Distribution (Bladelogic, etc.)

Security (, etc.)

Work Distribution & Control

The Data Center Operating System
web services lessons
Just because it’s called “SOAP”, doesn’t necessarily mean it’s clean

Just enough holes to keep it from inter-operating cleanly

The “X” in XML is for Xtensible, not Xtremely fast

Not designed for high velocity interfaces

Bandwidth-intensive to pass around

CPU-intensive to parse

Memory-intensive to parse

Loosely Coupled – guaranteed messages are a problem – this is not MQ Series

If timed-out, did you get message, was the data received, should you retry?

Credit card Authorizations - need to build duplication detection at the target site to prevent duplicate authorizations

Reliable web services will address this, but specifications are still evolving

Tightly Connecting to Suppliers means your uptime is the aggregate of theirs

Continuous Reporting/Alerting/Diagnostics become very important

Web Services Lessons
web services lessons the good news
Security – Very Mature

Supported and Maintainable without programming; common tools

SSL – privacy for data

Authorization – use digital certificates

Network – TCP segments

Basic password – username/password

Fully leverage Web Infrastructures

SSL accelerators

HTTP load balancers

Proxy servers

Web Services Lessons, The Good News
technological excellence web and database architecture
Web/DB transactional speed and high levels of availability (>99.99%) that are fully competitive with Airline/Mainframe levels

Web Architecture which masks failures, Session State Servers

Web Architecture which finds surviving database, DPM

Proven Scalability - 20 million customers+

One of the most scalable and reliable database architectures in the Fortune 1000

Primary Secondary Tertiary Quaternary, 2 forms of replication

Horizontally Scalable Replication

SUN link is

3 6800’s on line and usable by middle tier at any time

ETL pulls and data warehouse queries don’t compromise the speed or integrity of the primary or secondary DB servers

Rolling upgrades supported without downtime

Technological Excellence – Web and Database Architecture
Technological Excellence - Disaster Recovery Architecture
  • Two Hot sites, not merely a theoretical failover site
  • Load Balancing across both sites, using BGP, to insure both sites are truly operational
  • Each site is on a separate power grid & separate communications grid
  • Sites are connected with redundant 8 GB dark fiber connectivity across diverse paths
  • Tertiary Quaternary customer databases at 2nd Site
  • Redundant forms of Redundancy in replication to databases
  • ATT to one building, MCI to the other, high speed network between
  • Disk SAN, Tape backup, operations monitoring all operate as though local to one site
  • Remote connectivity, with security, allow remote support if NOC building is compromised
Portfolio Management – Capital
  • Most significant problem for Internet CIO’s
  • Candidate is brought forward under review process, PIF
  • Passes ROI examination
  • Revenue
  • Costs (Development + Maintenance + Customer Service + Marketing)
  • Man-Days (as function of cost And complexity)
  • Estimated Margin
  • Applies to all projects greater than 50 man-days or $100k
  • Ask the Business folks to comply Every project
  • Ask the Business folks to comply Audit Every result
the roi of mttr reduction
Determine your Cost/Hour for each major component failure

Determine how many incidents per month and average duration

Understand your MTTR

Alerting Lag

Diagnostic Time for NOC Level One Support

Escalation Lag for Level Two Engineering Call

Engineering Time to Respond

Diagnostic Time for Level Two Engineering Support

Action Time for Level Two Engineer to recover the major component

Analyze the ROI for the toolsets

Predict which tools can help which step above to reduce MTTR

Predict the reduction in incidents, and thus manpower

Keep an eye out for automation to recover from the outage automatically

The ROI of MTTR Reduction
top ten list of expense reduction steps
Prioritize by highest ROI

Treat expense reduction like a project/process

PM, Accountant, Negotiator, Vendor Coordinator, etc.

Centralize contracts around your best negotiator

Good requirements (eliminate confusion on number of CPUs, etc.)

Competitive Knowledge (Gartner)

Competitive Bidding (DB2)

Competitive Threats (Gartner  DB2 & Redbrick)

Get ready early (Last week before end of Quarter/Year

Take 3 weeks to 3 months to prepare for that week

Subtract any irrelevant intrinsic product features/services

Develop a training methodology

Always “Name Your Own Price”

Top Ten List of Expense Reduction Steps
offshore lessons learned best practices
Vendor Selection is Very Important

Large enough for adequate bench strength, (>1000)

Multiple capabilities (customer service)

Hiring and recurrent training methodology

Use technology to help you

Workflow software

Web-enabled Project Management software

Secure Network topology

VPN’s that access Source Control, (SecurID can help)

VOIP phones, Cheap Videoconference tools

Offshore Lessons Learned – Best Practices
offshore lessons learned best practices con t
Anticipate the Inefficiencies (and adjust for them)

Combination of Onsite and Offshore initially for Knowledge Transfer

Cross train India resources in America

Team reverts to India and develops

Offshore Program Management Office at

Priceline Lead at HCL’s Offshore Center

Weekly Status Reports & Reviews

Send American managers to India

Train American managers to build relationships

Offshore Lessons Learned – Best Practices (con’t)
offshore lessons learned common myths
Traditional Perceptions

The savings are illusory due to inefficiencies

Priceline Experience

Over $25 million saved thus far among all 5 companies

Traditional Perception

“Offshore partners can only can do maintenance, simple projects, legacy projects well. Not strategic partners.”

Priceline Experience

Rapid Development and Deployment is possible

Offshore extended priceline development capacity and helped strengthen the company

Offshore has increased sharing of priceline IP among affiliate companies

Our offshore strategy/partner has been fundamental to our continued success

Offshore Lessons Learned – Common Myths
IT Goals Framework (for enhancing Shareholder Value)
  • Build and Launch New Products
    • Help with the Business Prioritization Process
  • (Do the right things)
    • Increase the effectiveness of product development
    • (Do the right thing, the right way)
      • B1. Increase Development Speed
      • B2. Increase QA Speed
      • B3. Increase teamwork within IT
      • B4. Increase teamwork between IT and Business
    • Project Management Archaeology
      • (Estimate and control effectively)
IT Goals Framework (for enhancing Shareholder Value)
  • Exceed Financial Targets
    • Prioritize contracts and renegotiate each downward
    • Examine supply chain for meaningful optimizations
  • Maintain Stability and Scalability Needed
    • Anticipate business and initiatives
    • Progress DR initiatives
  • Enhance Professional Development
  • Increase Security
    • Enhance security from attacks from the external networks
    • Enhance security form attacks from the internal networks
    • Progress customer data security