Microsoft SQL Server Customer Solution Case Study Hosted Solution Provider Achieves 99.99 Percent Uptime While Supporting Rapid GrowthOverview “Our upgrade to Windows Server 2008 R2 and SQLCountry or Region: United StatesIndustry: Professional services Server 2008 really improved website responsiveness, helping us to support our continued rapid growth.”Customer ProfilePaylocity provides hosted payroll and Chuck Cooper, Chief Information Officer, Paylocityhuman resources solutions and services.The company has 325 employees and isbased in Arlington Heights, Illinois.Business Situation To succeed with its vision for delivering a hosted, web-basedPaylocity needed a software platform payroll processing solution, Paylocity needed a softwarecapable of delivering mission-criticallevels of scalability, reliability, and platform capable of providing superior levels of availability,security for its hosted solution. scalability, and security—as required to compete with muchSolution larger companies. In 2004, Paylocity adopted a strategy basedThe company selected Microsoft on Microsoft technology, and over the past seven years, it hassoftware and now runs its hostedsolution on the Windows Server 2008 R2 evolved that strategy, continuing to take advantage of the latestoperating system and Microsoft SQL software from Microsoft. Paylocity now runs its hosted solutionServer 2008. on the Windows Server 2008 R2 operating system and MicrosoftBenefits SQL Server 2008. The company’s choice of Microsoft software Strong reliability, scalability, performance, and security has helped Paylocity achieve the reliability, scalability, and Continual product innovation through security required to support around-the-clock access by more adoption of new Microsoft software Ease of administration and than 6,000 customers with millions of employees over the web— management maximizing customer satisfaction and fueling continued Low total cost of ownership Strong customer satisfaction business growth.
“To effectively support Situation based delivery model is ideal for meeting Paylocity provides payroll, human all of those criteria. In addition, we saw howour rapid growth rate resources, tax filing, and time and labor it would enable us to easily scale management solutions through a software- geographically, as nothing would need toand compete against the as-a-service (SaaS) model, along with be installed on-premises at customer sites.”three big companies in complementary professional services. The company has twice been named the Payroll To succeed with its vision, Paylocity neededour industry, which are “Service Bureau of the Year” by the a software environment capable of Independent Payroll Providers Association providing superior levels of availability,many times larger than (IPPA) because of its 97-percent client scalability, and security. “We needed aus, our business strategy retention rate for 10 years running. In platform capable of delivering all the addition, Paylocity has been recognized by mission-critical attributes, as necessary tohas been to leverage Inc. Magazine six times as being among the meet customer needs and compete with nation’s fastest-growing, privately held much larger service providers,” saysMicrosoft technology companies. Cooper. “Scalability was especiallyinnovations.” important because, at the time, we were Founded in 1997, Paylocity started as a growing at a rate of 60 percent per year. OfChuck Cooper, Chief Information Officer, reseller of a third-party, client-server course, we also had to deliver Paylocity application. Paylocity customized the uncompromised availability and be able to solution for on-premises installation at secure our solution for delivery over the customer sites, with payroll information web.” generated by the software sent by File Transfer Protocol (FTP) to Paylocity for In 2004, Paylocity launched Web Pay, its processing. However, that business model hosted solution, on Windows Server 2003 presented key disadvantages that were and Microsoft SQL Server 2000. At the time, hampering business growth: The need for the company had four web servers, one geographic proximity to customers limited database server, 1,900 customers, 83 market size, and there was only a certain employees, and U.S.$7.8 million in annual degree of customization that could be revenue. achieved. Most importantly, licensing a third-party technology prevented Paylocity Over the next few years, the company from achieving true differentiation in the upgraded to SQL Server 2005, moved to marketplace. 64-bit servers to take advantage of additional physical memory, and In 2003, the company decided that it was transitioned to separate transactional and time for a change. “We wanted to control reporting databases that were linked by our own destiny, and saw the opportunity transactional replication. Because of an to build our own software-as-a-service ever-increasing number of servers in its solution for delivery over the web as a datacenter, Paylocity adopted a virtualized means to that end,” says Chuck Cooper, IT infrastructure. “We were growing so fast Chief Information Officer at Paylocity. “We that we were going to run out of power set out to create a solution for midmarket and cooling capacity, yet we still had time companies with 50 to 5,000 employees, and on our data center lease,” recalls Cooper. to differentiate ourselves by combining a “We adopted Windows Server on VMWare better product with great service. Clients to address those issues, and have been want simplicity, cost-effectiveness, and ease using it successfully ever since.” of adoption and management; and a web-
“Our clients trust By 2008, that IT infrastructure had grown to new software development and relies on 12 web servers, 1 active transactional Microsoft Visual Studio Team FoundationPaylocity to ensure that database server, and 2 reporting database Server 2010 for all aspects of application servers, supporting 4,200 customers. lifecycle management.their employees are paidaccurately and on time, Solution “We rely on our hosted solution even more Paylocity originally chose Microsoft than you might expect,” says Cooper. “Notand we trust the software because it met all mission-critical only does it support more than 6,000 requirements. “To effectively support our customers with millions of employees, butMicrosoft platform to rapid growth rate and compete against the it’s also used by our own staff to bothensure that we continue three big companies in our industry, which manage our client’s payrolls and run our are many times larger than us, our business own business. We also use variousto achieve that goal— strategy has been to leverage Microsoft Microsoft Dynamics products to support technology innovations,” says Cooper. “Our sales lead management and accounting.”even as we continue to clients trust Paylocity to ensure that theirgrow at a rapid pace.” employees are paid accurately and on time, “Windows Server 2008 R2 Enterprise and we trust the Microsoft platform to offered significant improvements inChuck Cooper, Chief Information Officer, ensure that we continue to achieve that reliability, security, and scalability, with Paylocity goal—even as we continue to grow at a support for up to 256 logical processors, rapid pace.” which provides plenty of capacity to support our continued rapid growth,” says Paylocity also chose Microsoft software Cooper. “We also identified several new because it offered superior developer and improved features in SQL Server 2008 productivity. “We had ambitious goals but that we were eager to adopt, such as a very small development team when we compression of log files, table partitioning, started this project,” says Cooper. “We and dynamic views.” looked at both Microsoft .NET technology and Java, and realized that Microsoft .NET To minimize downtime, Paylocity planned would better enable us to more quickly and for an across-the-board upgrade of its IT easily deliver a rich and robust solution.” infrastructure. “Because we have a solution that is accessed by our customers literally By late 2010, Paylocity was once again 24/7 [24 hours a day, seven days a week] ready to take advantage of newer Microsoft throughout the year, when we do have a software to support its continued rapid major release with scheduled downtime, we growth. Paylocity upgraded its IT make several environmental changes at infrastructure to the Windows Server 2008 once,” explains Cooper. “For example, when R2 operating system. The web servers run upgrading to Windows Server 2008 R2 and Windows Server 2008 R2 Standard with SQL Server 2008, we also installed a new Internet Information Services (IIS) 7.5, the storage area network. Everyone agrees that latest web application platform from we have a much more stable system, and Microsoft. The database servers run we’ve seen the fastest performance Windows Server 2008 R2 Enterprise and benchmarks we’ve ever seen, with average Microsoft SQL Server 2008 Enterprise data webpage response times of less than one management software, and SQL Server second.” Reporting Services is used extensively. Paylocity uses the Microsoft Visual Studio After testing the new environment, 2010 Premium development system for Paylocity upgraded all 25 web and
“Microsoft software gives database servers on a Saturday. “We “We selected SQL Server Reporting Services completed the upgrade with no issues at as our reporting engine because it allowsus choice and flexibility all,” says Cooper. “In fact, the week us to programmatically create our own following the upgrade was one of the reports,” says Cooper. “This has allowed usin meeting customer busiest of the year in terms of server to build our own front-end Report Writer,needs, while at the same workload, and everything held up which allows nontechnical users to create remarkably well.” their own reports with just a few mousetime providing great clicks. Just as important, the scale-out Current Architecture architecture for SQL Server Reportingscalability and Today, the IT infrastructure supporting the Services helps ensure that we can continuedependability.” company’s hosted solution consists 43 to keep up with an ever-increasing virtual servers running on 9 quad-core reporting workload.”Chuck Cooper, Chief Information Officer, Xeon 5500 servers, each configured with 72 Paylocity gigabytes of memory and 2 host-bus Important New Capabilities adapter Fiber Channel cards. The web In implementing the versions of Windows server tier includes 12 virtualized servers, all Server and SQL Server it uses today, of which run Windows Server 2008 R2 with Paylocity took advantage of new and IIS 7.5. Paylocity uses vMotion from improved functionality in those products to VMware to move the virtual machines from improve performance, security, and one physical server to another to evenly scalability. Features in Windows Server distribute the load. 2008 R2 that the company adopted include: The transactional database that supports Active Directory Federation Services 2.0, the web tier is also hosted in a virtualized which Paylocity uses to enable single environment, where it runs on Windows sign on (SSO) among its various payroll, Server 2008 R2 Enterprise and SQL Server human resources, time and labor, and tax 2008 Enterprise Edition. To maximize services products. The company also availability, the database is configured as uses Active Directory Federation Services an active-passive cluster using failover 2.0 to integrate with hosted solutions clustering in Windows Server 2008. The from business partners. database is approximately 500 gigabytes in size and averages 2,600 transactions per Improved static compression in IIS 7.5, second, with a physical input/output (I/O) which reduces the processor and rate of 50,000 kilobytes per second. memory utilization associated with Enterprise-class storage is provided by a compressing static content before Hitachi ASM2500 storage area network. transmitting it from the company’s web servers to a customers’ web browsers. The reporting tier, which is based on SQL Server Reporting Services, resides on three Paylocity also took advantage of several additional virtualized servers and is new and improved features in SQL Server supported by a separate reporting 2008, including: database. Paylocity uses transactional replication to copy data from the Backup file compression, the use of transactional database to the reporting which has delivered an 80 percent database, with changes typically replicated decrease in disk space used for backups in less than four seconds. and a 75 percent reduction in the time required to complete those backups. “In
“Our software is Benefits minor issues that we have experienced Since 2004, Paylocity has taken advantage have been hardware-related. In the pastphenomenal! It has of Microsoft software innovations to seven years, we’ve only had to call support and fuel business growth—and to Microsoft for support twice.”enabled our sales keep its hosted service up and runningmanagement team to smoothly. Today, the company relies on Superior Scalability and Performance Windows Server 2008 R2 and SQL Server The company’s recent upgrade hasattract the best talent 2008 to achieve the reliability, security, and improved application performance, helping scalability needed for 24/7 access by its Paylocity to support business growth andavailable in our industry more than 6,000 customers. keep customers happy without excessivefrom coast to coast to investments in additional hardware. “Our “Microsoft software gives us choice and upgrade to Windows Server 2008 R2 andhelp us expand from two flexibility in meeting customer needs, while SQL Server 2008 really improved website at the same time providing great scalability responsiveness, helping us to support ourmarkets in 2007 to more and dependability,” says Cooper. “Just as continued rapid growth,” says Cooper.than 30 markets today. important, we get all of the great ‘extras’ “Over the past two years, webpage out-of-the-box—features such as Active response times have decreased by 60Our sales force is now Directory Federation Services 2.0 and SQL percent while our overall web traffic has Server Reporting Services that we’ve used tripled.”significantly more to deliver an even better solution. Sevenproductive and our new years ago we adopted a strategy based on The upgrade has also improved reporting using Microsoft technology innovations to performance. “During peak periods, we runsales have quadrupled compete against much larger companies more than 20,000 reports per day, with an and, if our continued rapid growth is any average report generation time of sevensince 2007.” indication, that strategy has continued to seconds, even though many of the reports Mike Haske, Vice President of Sales and serve us very well.” are large and complicated,” says Cooper. Marketing, Paylocity “That’s a significant improvement over Mike Haske, Vice President of Sales and what we were seeing before the upgrade, Marketing at Paylocity, adds, “Our software when reports took an average of 11 is phenomenal! It has enabled our sales seconds.” management team to attract the best talent available in our industry from coast to coast Strong Security to help us expand from two markets in Paylocity has been able to maintain strong 2007 to more than 30 markets today. Our security, which Cooper attributes to two sales force is now significantly more things: the integrated security model built productive and our new sales have into the Windows Server operating system, quadrupled since 2007.” and guidance provided by Microsoft on how to best take advantage of it. “We High Reliability haven’t had a single security breach since Because customers use its hosted service launching our hosted solution seven years 24/7, 365 days per year, Paylocity has a ago,” says Cooper. “We’ve had external goal of 99.99 percent service level penetration testing done, with good availability—equal to about 52 minutes of results—and give a lot of the credit for unplanned downtime per year. “Windows those results to the Claims-Based Identity Server 2008 R2 and SQL Server 2008 have and Access Control guidance provided by been rock solid, enabling us to hit our the Microsoft Patterns and Practices target service levels,” says Cooper. “The few group.”
“Over 90 percent of our Continual Innovation capability, helps pay for itself,” says Cooper. With feature-rich software and a world- “We could have spent many more times oncustomers would refer us class development environment, Paylocity Oracle to get the same performance that has been able to continually and rapidly we get with SQL Server.”to a friend or business innovate—as necessary to stay ahead ofassociate.” competitors with hundreds of times as High Customer Satisfaction many developers. “We’re the small guy For Cooper, customer satisfaction is the Jenifer Page, Vice President of going up against several multibillion dollar ultimate gauge of whether his strategy to Operations, Paylocity competitors, and have been able to run the business on Microsoft software is compete successfully by leveraging the working. Recent survey results reflect that enormous investments continually made by he’s made the right decision. “Clients have Microsoft in research and development,” been extremely happy with Paylocity and says Cooper. “When I consider all of the our Web Pay product, as shown by recent new capabilities we gained through our customer satisfaction surveys,” says Jenifer latest upgrade—including Active Directory Page, Vice President of Operations at Federation Services 2.0, static compression, Paylocity. “Over 90 percent of our log file compression, table partitioning, and customers would refer us to a friend or dynamic database views—it’s like getting business associate.” 10 additional developers for less than the price of one developer’s annual salary.” Ease of Administration and Management Even with 43 virtual servers, the company’s production IT infrastructure requires very little hands-on administration. “Microsoft software makes system administration and performance tuning easy, which is why we’re able to get by with only six system administrators and three database administrators,” says Cooper. “Choosing Microsoft Dynamics software has also contributed to ease of administration, as we’re able to maintain and support those systems with the same tools and skillsets that we use to support our hosted solution.” Low Total Cost of Ownership With Microsoft software, Paylocity is able to invest more on innovation with respect to its own products and less on hardware, licenses, maintenance, add-ons, and consulting—contributing to a low total cost of ownership. “Microsoft software is well worth the investment—in addition to the extensive capabilities it provides, it essentially runs itself and, through that
For More Information Microsoft Server Product PortfolioFor more information about Microsoft For more information about the Microsoftproducts and services, call the Microsoft server product portfolio, go to:Sales Information Center at (800) 426- www.microsoft.com/servers9400. In Canada, call the MicrosoftCanada Information Centre at (877) 568-2495. Customers in the United States andCanada who are deaf or hard-of-hearingcan reach Microsoft text telephone(TTY/TDD) services at (800) 892-5234.Outside the 50 United States andCanada, please contact your localMicrosoft subsidiary. To accessinformation using the World Wide Web,go to:www.microsoft.comFor more information about Paylocity,visit the website at:www.paylocity.com Software and Services Technologies Microsoft Server Product Portfolio − Active Directory Federation Services − Windows Server 2008 R2 Standard 2.0 − Windows Server 2008 R2 Enterprise − Internet Information Services 7.5 − Microsoft SQL Server 2008 Enterprise − Microsoft ASP.NET 4 Microsoft Visual Studio − Microsoft SQL Server Reporting − Microsoft Visual Studio 2010 Services Premium − Microsoft Visual Studio Team Hardware Foundation Server 2010 12 custom-build quad-core serversThis case study is for informational purposes only.MICROSOFT MAKES NO WARRANTIES, EXPRESS ORIMPLIED, IN THIS SUMMARY.Document published April 2011