June 08, 2009, 9:48 AM — Who's gambling on big technology investments in this down economy? At first glance, you might not guess that it would be the Las Vegas Sands Company, the owner of the Venetian and Palazzo Resorts in Las Vegas and the Sands Macau in China. The company recapitalized last November to the tune of $2.1 billion and suffered a public falling-out between its chairman and top executive earlier this year, leading to a new president being named. Yet, as LV Sands shored up its finances and brought in new leadership, it forged forward with bold plans to expand globally. In late May, LV Sands opened its first casino in Bethlehem, Penn., handling more than $60 million during the Memorial Day weekend, of which nearly $6 million was gross profit. By the end of the year, the company, which earned $4.4 billion last year, aims to open a "megacasino" in Singapore.
A critical part of those plans is the company's investment in handling information more efficiently and effectively, especially during hard economic times, says Steve Vollmer, CTO for the hospitality and gaming company. That investment has included a move to BMC Software tools for data center management and automation.
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"It is an important time to invest," Vollmer says. "You have to invest in your customers to keep your customers. If I have no customers, I have no business period, whether it's good or bad times." (For another perspective on IT planning at recession time, see IT Gets Ready For The Recovery.)
Information technology forms the nervous system and control center of every casino and hotel, from corporate operations down to each individual slot machine. The slot machines (essentially PCs running a game) have to calculate and document odds and payoffs, with the company keeping track of every coin that goes in and every coin that goes out. The company runs more than 200 servers to keep track of its revenue, run its Web sites, manage its businesses and operate its hotels and casinos, Vollmer says.
In the new effort, LV Sands will use BMC's BladeLogic software in its data centers to manage that herculean task more efficiently. The BMC software helps track and audit changes in the systems, helping avoid outages and misconfigurations that could open up vulnerabilities.
"When you have a big network, there are a lot of times when you think you know what you've got, but, really, how do you know what is out there?" Vollmer says. "As one of my managers said, it's like finding a needle in a haystack."
The software, Vollmer says, helps LV Sands find a cost-effective way to comply with the host of regulations surrounding gambling-not only Sarbanes-Oxley and the PCI Data Security Standard, but also various locales' gaming rules, in what is a highly-regulated industry. The software tracks configuration changes across all servers and checks that modifications to machine configurations meet policy standards.
"Compliance in general is a priority, especially to be effective and efficient," Vollmer says. "When you have so much equipment out there, it is easy to make mistakes. We are all human."
A Complex Set of Demands from the Business Operating a casino, and the adjoining shops and hotel, is less like managing a business and more like running a small country, Vollmer says. Every casino has its own currency in the form of chips and its own bank-the cage-with cash reserves and a computer-based accounting system. The casino and hotel have to manage the feeding of thousands of people, including the logistics of what and when to order to minimize food spoilage. And, the company has to manage is large population of workers and visiting travelers.
"We have very, very many disciplines that we have to deal with," Vollmer says.
Vollmer puts his company's use of IT into three "pillars"-a Greco-Roman analogy perhaps more suited to his Las Vegas neighbor, Caesar's Palace. Securing the company's data and assets and complying with the various regulations are two important pillars for the CTO's team. Yet, these days, the most important pillar is facilitating successful casino openings, he says.
For the latest casino opening in Bethlehem, Penn., nine members of the IT team at the company's Las Vegas headquarters put in 20,000 to 30,000 hours to get the job done, Vollmer says. That's not including the 14-member team hired to run the information technology side of the new casino and yet-to-be-completed hotel.
"Openings are a lot of work and added stress," Vollmer said.
Buying IT on a Just-In-Time Basis Given the LV Sands business demands, the investment in the BMC system is right in line with the trend of businesses focusing on immediate needs-tactics, not strategy, says Joseph Pucciarelli, director of technology financing and executive strategies with market researcher IDC.
"Companies are spending on IT-to use a phrase from the manufacturing world-on a just-in-time basis," Pucciarelli says. "When you have a specific problem, you spend the money to fix that problem. 'Tactical investment' is an oxymoron, but that is what we are seeing."
BMC Software, along with its main rivals in data center management tools, HP, IBM and CA, is counting on such tactical investments to fuel its own growth. The company's market space heated up a bit more this week when EMC announced its intention to buy Configuresoft, known for its tools that help IT groups meet security and regulatory requirements.
Automating as much maintenance and preventative work for IT as possible is the overwhelming trend among such products right now While Vollmer is also looking for ways to outsource some of his information technology requirements, moving data center operations to a cloud is not yet an option, he says. Aside from issues of security and trust, complying with gaming regulations would be problematic, he says, since casino operators are prohibited from offering a game of a chance outside of their walls.
With the Bethlehem opening behind him, Vollmer now has to prepare to open an even more massive facility in Singapore.
"In Singapore, you have theaters, a resort, a casino, a hotel-which is huge- purchasing and warehousing," he says. "It is going to be a much more complicated system."
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