Microsoft SQL AzurePartner Solution Case Study

Software Provider Reduces Operating Costs with Cloud-Based Solution

OverviewCountry or Region: United StatesIndustry: Professional services—IT services

Partner ProfileBased in Poulsbo, Washington, Microsoft Gold Partner, Paladin Data Systems provides software development, integration, and implementation services for public and private sector industries. It employs 80 people.

Business SituationPaladin wanted to offer a hosted option for its SMARTGov Community solution to appeal to small jurisdictions, but it wanted to avoid the cost of building the infrastructure needed to host the solution.

SolutionPaladin turned to Microsoft SQL Azure to offer scalable database services. With very little effort, Paladin can now offer a hosted alternative to small municipal governments.

Benefits Reduce operating costs Reduce deployment time Reach new markets

“With SQL Azure, we found the perfect computing model for smaller jurisdictions that want easy, maintenance-free access to SMARTGov Community’s rich features and functionality at low cost.”

Robert Johnston, Founder and Vice President, Paladin Data Systems

In 2009, Paladin Data Systems moved its planning and permits solution from the Oracle platform to Microsoft SQL Server 2008 to attract small, municipal government customers. To make it easy for these jurisdictions to acquire and use the solution, called SMARTGov Community, Paladin wanted to offer a hosted version. When it heard about Windows Azure, it turned to Microsoft SQL Azure, a cloud-based, relational database service built on Microsoft SQL Server technologies, as a less expensive alternative to building its own hosting infrastructure. Almost immediately, attracted by the easy deployment, low maintenance, and reliability of a Microsoft-hosted solution, Paladin gained its first customer. Looking ahead, it expects increased market share and profit margins because it can provision customers in the cloud at a tenth of what it would have cost to host solutions in-house.

SituationFounded in 1994, Microsoft Gold Partner Paladin Data Systems has a 100 percent customer retention rate. That’s because it combines innovative technology solutions with a commitment to exceptional customer service. Paladin provides configurable information management products and solutions to customers in the military, government, and natural resource sectors, as well as community, city, and county agencies.

One of its products, an on-premises client/server planning and permits system, was developed in 2001 originally for the company’s local jurisdiction, Kitsap County. Kitsap County wanted to automate and standardize the many complex processes required to administer building permits of all types. Instead of managing a cumbersome paper trail and manually documenting adherence to each step of the building permit process, Kitsap employees use the Paladin system, called Interlocking Software, to process permits. Kitsap County employees preferred the system’s simple, automated workflow because it streamlines the planning and permits process, reduces manual errors, and enables them to provide better service for local residents. “What differentiates us from our competitors? First and foremost is feature and value,” says Jim Palmeri, General Manager for Sales and Marketing at Paladin Data Systems. “The second is that we develop smart solutions for local government.”

Interlocking Software represents the company’s expertise in building sophisticated relational databases that provide the business logic behind complex

business workflows. “Our planning and permits solution couldn’t run without a powerful relational database,” says Mike Weinmann, Lead Architect at Paladin Data Systems. “We are talking about very complicated data entities and relationships. The database contains all the data and documents required to track and monitor all the business processes in a local jurisdiction’s planning department.”

Wrong Database Platform for GrowthAt that time, Paladin worked in the Oracle Forms development environment to build applications that run on Oracle databases, which happened to align with Kitsap County’s technology environment. However, when the company tried to market Interlocking Software to other county and municipal governments, it encountered a stumbling block. “We found that most local jurisdictions have settled into the Microsoft technology stack, and they weren’t interested in Oracle: it was considered too complicated and expensive,” says Robert Johnston, Founder and Vice President of Paladin Data Systems. “It was difficult for us to sell our product to customers running a Microsoft technology environment. However, we had done our research and knew that this could be a lucrative market for Paladin. We wanted to grow our market share in this area, so we decided to migrate our planning and permits solution to Microsoft technologies.”

In the summer of 2009, Paladin began to recreate its planning and permits application using Microsoft Visual Studio Team System 2008 Development Edition and Microsoft .NET Framework 3.0 technologies such as Microsoft ASP.NET.

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“We found that most local jurisdictions have settled into the Microsoft technology stack, and they weren’t interested in Oracle: it was considered too complicated and expensive.”

Robert Johnston, Founder and Vice President, Paladin Data Systems

The new product, renamed SMARTGov Community, is a family of products that contains more than just the planning and permits solution. It runs on Microsoft SQL Server 2008 data management software.

Problems with Solution DeliveryBy this time, Paladin had reached a crossroads. It was in the middle of moving a successful application from Oracle to Microsoft technologies to grow market share. However, the software delivery methods available to the company threatened to mitigate this opportunity for revenue growth. Paladin had two deployment options: it could install the solution onsite so customers could host it themselves, or it could host the solution for customers at its own data center. The first scenario takes extra time and effort and makes it more challenging to provide responsive customer service. The second scenario would necessitate significant up-front costs to build the highly available, clustered server scenario required to meet its customers’ demands for application stability and availability.

“We have about 25 customers with on-premises implementations of the original version of our planning and permits application,” says Johnston. “On average, it took approximately 90 days and 300 hours of implementation and configuration work to get a customer up and running.”

“Keeping customers up to date with software upgrades and security updates was an even bigger challenge because we had to reach out to each customer over the virtual private network [VPN] and make

sure the upgrade and the update worked with their particular configuration,” adds Weinmann. “Sometimes there were issues with the VPN not working properly and then we would have to call in the customer’s IT staff to get access to the server.”

Paladin was concerned that requiring customers to set up an internal infrastructure and manage a database would seem a little daunting to small county and municipal governments. On the other hand, it was an equally formidable proposition for Paladin to enter the hosting business. “Our core competency is software development, not building hosting centers,” says Palmeri. “We want to focus on improving our applications to meet our customers’ needs. It seemed like we were halfway there with SMARTGov Community. We just needed to find a cost-effective, rapid, and flexible software delivery method so we could drive business with the small jurisdictions.”

SolutionPaladin found the answer to its problem in cloud computing. Using the cloud to host SMARTGov Community and its data on computers in large data centers owned by another company had its appeal: it would divest both Paladin and its customers of the need for large up-front capital expenses for hardware and for ongoing infrastructure management. Rather than installing and using software on local computers, SMARTGov Community customers can opt for a subscription-based payment model and access the cloud-based application using a web browser. “Among federal and state governments, there is a big push for the cloud right now,

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“Among federal and state governments, there is a big push for the cloud right now ... so offering SMARTGov Community as a cloud-enabled application seemed like a natural fit.”

Mike Weinmann, Lead Architect, Paladin Data Systems

and the smaller jurisdictions are hearing this message,” says Weinmann. “So offering SMARTGov Community as a cloud-enabled application seemed like a natural fit.”

Full-Service Cloud ComputingPaladin evaluated Amazon Elastic Compute Cloud and Microsoft SQL Azure, a relational database service in the cloud that is based on SQL Server 2008. SQL Azure is part of Windows Azure, which provides a Windows-based environment for running applications and storing data on servers in Microsoft data centers. Windows Azure provides a Windows-based environment for running applications and includes Windows Azure Storage to store nonrelational data and Windows Azure for cloud-based middleware services. “We chose the Microsoft cloud computing platform,” says Weinmann. “As opposed to the Amazon option, where we would have had to manage our database servers, Microsoft cloud computing offered a true managed service platform. Our solution is dependent on a relational database. Having a completely-managed relational database in the cloud proved to us that SQL Azure was made for SMARTGov Community.”

“When we were talking about moving to the cloud with our customers, they were relieved to hear the Microsoft name,” adds Johnston. “If we had said we would host SMARTGov Community here at Paladin, they probably wouldn’t have gone with that! The Microsoft name was the security blanket they were looking for.”

Finally, Paladin decided that it was in the company’s best interests to take advantage of the work done to migrate SMARTGov

Community to Microsoft technologies in the first place. “It’s been my experience in 30 years of system development that it’s never a good idea to mix best-of-breed technologies,” says Johnston. “We started our development with SQL Server 2008 and it made sense to continue with the same platform.”

The Move to the CloudIn November 2010, the company began the process of re-architecting SMARTGov Community to run in the cloud. Weinmann and his team transitioned the original SQL Server 2008 database schema and all of the data to the cloud using SQL Server Management Studio and custom SQL scripts to mitigate the few minor differences between (on-premises) SQL Server and SQL Azure. “For the most part, the scripts we used to develop and upload data to our original SQL Server 2008 database worked fine,” says Weinmann. “We just had to change the connection string to go to SQL Azure and we didn’t need to change our toolsets to get everything working in a cloud environment.”

To re-architect SMARTGov Community to run in the cloud, the Paladin IT team used templates in the Microsoft Visual Studio 2010 Professional development system. To upload SMARTGov Community to Windows Azure, the IT team simply uploaded a package with website files and web/worker role configurations. Web roles accept incoming HTTP requests through Internet Information Services 7.0, a feature of Windows Server 2008. Worker roles process these requests in the background. Each instance of a web role or a worker role runs in its own virtual machine. Windows Azure

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“If we had said we would host SMARTGov here at Paladin, they probably wouldn’t have gone with that! The Microsoft name was the security blanket they were looking for.”

Robert Johnston, Founder and Vice President, Paladin Data Systems

creates the required number of virtual machines and oversees their execution. “It was a very easy transition for us to take the existing technology that we were developing and deploy it into the cloud,” says Johnston.

“There were a few little things we had to account for to get SMARTGov Community to run in a high-availability, multitenant environment, but we didn’t have to make major changes,” adds Weinmann. “We are also using Windows Azure to keep track of user sessions. We never felt alone during this process: with Microsoft offering us so much help, they made the transition to SQL Azure so much more successful.” A multitenant architecture allows many customers to use the same instance of an application by isolating each customer’s data.

By mid-February of 2011, SmartGov Community was running in SQL Azure and Paladin already had its first customer. The City of Mukilteo in Washington State has 109 employees who administer civic services for a population of 20,000. It has been using the Interlocking Software Permit & Planning Oracle-based solution in an on-premises, client/server configuration since September 2009. “We chose Paladin because we wanted a partner that gave us the flexibility and support that we needed and we wanted to continue that relationship,” says Joe Marine, Mayor of Mukilteo. “The move to the cloud would basically offer us the same great product, but save us time and money.” “Mukilteo wanted to transition to SMARTGov Community for all the reasons we thought would be appealing—low up-

front cost, low maintenance, ease of deployment, ease of use—immediately ratifying our decision to move to the cloud,” adds Palmeri. “They have only been up and running for two weeks, but already they can see the value of moving their IT staff into more strategic software projects versus working on backups and server maintenance.”

BenefitsPaladin expects that its cloud computing solution, based on SQL Azure and Windows Azure from Microsoft, will be the key to unlocking a new market and opening the door to additional revenue. Running SMARTGov Community in the cloud will help the company reduce operating costs, drive agility, and reach new markets.

Reduce Operating Costs, Increase ProfitabilityRunning SMARTGov Community in the cloud will reduce the cost of doing business compared to the on-premises, client/server model of its predecessor. “Most small jurisdictions cannot pay the high up-front costs of an on-premises deployment that requires servers and ongoing support costs,” says Palmeri. “When you look at the implementation costs of buying a new server and sending a technician to deploy the solution, by comparison, provisioning customers in the cloud will be about one tenth of the price. Now we can offer these customers a general subscription model that gets us in the door with a very robust solution. We use the tag line, ‘Metropolitan functionality with a municipal budget’.”

Marine agrees: “The primary benefits for the City of Mukilteo are the savings in staff time and not having to handle repetitive

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“When you look at the implementation costs of buying a new server and sending a technician to deploy the solution, by comparison, provisioning customers in the cloud will be about one tenth of the price.”

Jim Palmeri, General Manager, Sales and Marketing, Paladin Data Systems

tasks. Offloading IT infrastructure maintenance to Microsoft and the cloud frees up our IT staff and the city’s data systems. IT resources can go towards more strategic work and more critical tasks.”

Looking ahead, Paladin sees further opportunities for reducing its own costs by taking advantage of additional data storage options in Windows Azure. Some of the data that is currently stored in SQL Azure, such as documents and audit logs are more suited to Blob and Table Storage in Windows Azure. “Microsoft has been very helpful in telling us about ways we can make better use of storage and drive our costs down by putting our data in the appropriate online storage,” says Weinmann.

Reduce Deployment Time, Increase Productivity Instead of spending up to 300 hours installing an on-premises deployment of SMARTGov Community, Paladin can work more productively and offer customers a 30-hour deployment. Faster deployments reduce sales cycles for Paladin and impress customers. And although it hasn’t faced a major upgrade since releasing SMARTGov Community in February 2011, Paladin anticipates similar agility in deploying updates across its customer base. Rather than convincing each customer to upgrade an on-premises solution, Paladin can reach all customers at once by upgrading the SMARTGov Community application in the cloud.

Employees at the City of Mukilteo are also working more productively. “SMARTGov Community has really impacted how quickly they can provide planning and

permit services. Employees are saving 75 percent of the time it used to take to set up files,” says Marine. “And for some permits, customers don’t have to come in, apply on paper, and wait; they can apply online and literally get their permit right then.”

Reach New MarketsWith SQL Azure, Paladin can finally achieve its original goal when it moved SMARTGov Community to run on Microsoft technologies back in 2009: take a product with a lot of potential and tailor it to meet customers’ needs in an untapped market.

“Going to the cloud has changed the way we run our business,” says Weinmann. “Knowing that we have this highly scalable product running in Windows Azure forces us to have a better model for bringing in new customers. We are rethinking our whole business to better understand how we can really take advantage of the opportunities that cloud computing brings.”

“With SQL Azure, we found the perfect computing model for smaller jurisdictions that want easy, maintenance-free access to SMARTGov Community’s rich features and functionality at low cost,” concludes Johnston. “We are already working on migrating our environmental knowledge solution for the natural resource industry from an Oracle database to Microsoft technologies. SQL Azure and cloud computing is definitely a part of our future.”

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“Going to the cloud has changed the way we run our business. Knowing that we have this highly scalable product running in Windows Azure forces us to have a better model for bringing in new customers.”

Mike Weinmann, Lead Architect, Paladin Data Systems

Windows Azure Windows Azure provides developers the functionality to build applications that span from consumer to enterprise scenarios. The key components of Windows Azure are:

Windows Azure. Windows Azure is a development, service hosting, and service management environment. It provides developers with on-demand compute, storage, bandwidth, content delivery, middleware, and marketplace capabilities to build, host, and scale web applications through Microsoft data centers.

Microsoft SQL Azure. Microsoft SQL Azure is a self-managed, multitenant relational cloud database service built on Microsoft SQL Server technologies. It provides built-in high availability, fault tolerance, and scale-out database capabilities, as well as cloud-based data synchronization and reporting, to build custom enterprise and web applications and extend the reach of data assets.

To learn more, visit: www.windowsazure.com www.sqlazure.com

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about Paladin Data Systems products and services, call (360) 779-2400 or visit the website at: www.paladindata.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published April 2011

Software and Services Windows Azure− Microsoft SQL Azure− Windows Azure

Microsoft Server Product Portfolio− Windows Server 2008 Enterprise− Microsoft SQL Server 2008

Microsoft Visual Studio− Microsoft Visual Studio Team System

2008 Development Edition Technologies− Internet Information Services 7.0− Microsoft .NET Framework 3.0