HR Block estimates it has saved about $1 million on hardware purchases since rolling out virtualization in June 2005

As the Monday U.S. deadline for filing taxes quickly approaches, tax preparation firm HR Block says it has found a way to cut IT costs.

With the use of virtualization software from EMC subsidiary VMware, the tax firm estimates it has saved about $1 million on hardware purchases since rolling out the technology in June 2005, said Ron Rosenkoetter, senior systems engineer for HR Block, in Kansas City, Missouri.

"When I came on board, HR Block had heard about virtualization and was looking to do server consolidation because like a lot of companies they had big server sprawl. About six years ago they only had 80 servers, now they're up to 600 or 700 servers, so they were adding a hundred servers every year," Rosenkoetter said. With servers dedicated to single applications, many of the machines were underutilized, he said.

Two years ago the tax prep firm started testing VMware's ESX Server virtualization software as a way to consolidate servers, and after a successful test during last year's tax season the company in June 2005 deployed the software.

"After the tax season, in June we found a couple of apps on 27 old physical servers that needed to be upgraded anyway, they were six years old," said Rosenkoetter.

HR Block now has about 25 percent of its datacenter virtualized, and it has completely virtualized its in-house timesheet application, which gets some heavy usage during the company's busy tax season when seasonal employees come on board and the company's ranks swell to 100,000.