Mid-Market Heroes: Linux And Outsourcing Help Virgin America Soar

The fledgling discount airline is flying high -- and saving money --thanks to an IT infrastructure based on open-source apps, inexpensive servers, and outsourcing. Despite Richard Branson's role as just a minority investor in the discount airline launched last summer, Virgin America, its IT department still lives up to Branson's brash, iconoclastic reputation in the only way that an IT department can: by going open source. "We have 25 open-source solutions at Virgin America today," said Bill Maguire, Virgin America's CIO. In fact, 60 percent of Virgin America's IT infrastructure is based on a Linux operating system and a host of other open-source apps running on inexpensive servers. If that isn't enough to make the company's accounting department see green, large swaths of the company's IT work is outsourced. Millions of Dollars Saved Maguire estimates that his department has saved the company nearly $6 million in licensing fees and ongoing maintenance fees since he first began setting it up about 18 months ago. His annual IT budget is probably nearly 20 percent less than it would be with off-the-shelf software. And that's not even including the reduced headcount because, as he said, "I don't have a big Oracle ERP application that requires full-time application staff, DBAs, and programmers." But the real bottom line is, is it working? "The good news is we are flying planes every day and everything is working," said Maguire. He acknowledged that in the world of airline IT, the way he built his IT department is fairly unique, but he added, "the best [proof] is how well it's working for the company." Virgin America began flying in August, 2007 and, according to Maguire, there have been no outages. The company is up to 700 employees, but the IT staff is holding at 16. Currently, he said, the Web site is handling nearly 650,000 transactions a second and could easily scale up if it had to. "We watch utilization, we watch for the peaks, we know how we're doing," said Maguire. "[The system] gives us great flexibility. If we need to scale up, I can jump in and add it." In typical open-source fashion, Maguire is a hands-on tech guy who saw the development of Virgin America's IT department from scratch as an opportunity to implement a vision that he has long nurtured. He joined Virgin America in January 2006, right after the airline had applied to the Department of Transportation for permission to fly, and wanted to start building out its IT infrastructure. "I've been using open source for years," Maguire said. "A lot of the products have matured significantly. I knew this was an opportunity to save money and have a system that's fast, lightweight, and flexible and wouldn't take a lot of people to manage." Choosing Carefully Maguire has fairly rigorous standards for which open-source products he chooses. "I don't select products that will put our company at risk," he said. "When we looked for a solution to a business requirement, we would do an in-depth study of the product and what community would be responsible. When we make a decision, we feel comfortable that we're not introducing something that's vulnerable. My goal when I came was to be as smart in solutions as possible." Smart, and open. From IPTables to BIND to Apache to Tomcat, Maguire's shop takes full advantage of what's out there in the world of open source. He implemented document management with KnowledgeTree, and deems it "phenomenal and incredibly simple. It's really, really cool and all Web-based." It took, he said, about two hours to set up and roll it out to all company departments. Among the other open-source solutions Virgin America's system uses are a Linux virtual server, Open VPN, Squid, Perl, and MySQL. Ultra Monkey was chosen for load balancing because, unlike many off-the-shelf software products, it can be easily set up, rules can be entered, and it doesn't require staff to manage it, Maguire said. It's Ultra Monkey that proved the site could handle all those transactions. Maguire said that if he needed to, he could increase the number of transactions on the site by 50 percent by adding a $3,500 server. "The software can scale up, and that's what's important," said Maguire. "When you can stress software to the extreme, it gives you confidence to handle growth." What Maguire also loves is the continued support and changes from the open-source community. "You don't have to slug it out with a provider," he said. The community support helped while Maguire was setting up shop, but he insists that, in most cases, open source is easier to set up than off-the-shelf products, typically taking between two hours and two days, depending on the solution. "Open source comes with good configuration data," he said. "And you can get online and get great information on configurations and implementations that people have put out there." A Few Surprises Despite the fact that Maguire said all systems were put through a rigorous testing process "so we'd know what would break" and so "nothing quirky would happen," there were some surprises. The open-source content-management solution, OpensourceCMS, which manages content on the Web, didn't turn out to be as "mature" as he thought. "It was disappointing," said Maguire. Instead, Maguire's staff wrote some code to manage the content themselves. But, said Maguire, they don't have the time to do that for everything. Maguire also realized that there was no point in having his department do tasks that could easily and cheaply be outsourced. He now uses Tuvox for IVR solutions and outsources the call center to Arise. The reservation system is outsourced to TravelPort. The "glue" that pulls it all together is a private network provided by Verizon. "We're all over the place," said Maguire. "It's kind of cool." And it all seems to be working well. The only problem since Virgin went live occurred when the guest agent from Arise lost all communication capability because its telecom provider had an issue. Maguire's team was able to redirect calls to guest service centers. "Technology came to the rescue," said Maguire. "Our network configuration allowed us to deal with that hiccup. It became an event that was easy to manage." Security for the company's IT comes in the form of Microsoft Active directory and a number of other filters to block users from trying to damage the Web site. "We're careful about people trying to get documents into the Web site. Without getting too specific, we're very diligent about that," said Maguire. Employee Reaction to Open Source Most of Virgin America's employees are blissfully unaware of the maverick nature of their IT department. "As long as we're providing solutions that work, they don't even ask," said Maguire. According to Maguire, Virgin America's management had him walk through the paces to demonstrate the viability of an open-source IT infrastructure, but their reaction was positive, especially once everyone started using the system. "Now I get business requests from the CFO -- Anything free out there?" said Maguire. Open source, added Maguire, can make all the difference in small and midsize companies, where there are always concerns about money and staff. "I could take our architecture and replicate it easily and save companies millions of dollars, especially in companies where IT really makes a difference," he said. When he first started, Maguire talked to a lot of people about the idea. "Some people were like, man, are you sure this is going to work?" The airline is adding planes and cities, and the infrastructure is keeping up. But for Maguire, it's also doing more. "We're driving change in technology," he said. "I have a lot of confidence in what we're doing."