Nationwide is working on a project to virtualise 500 servers in its datacentre, with the aim of cutting £8 million from operational and energy costs.

The building society has contracted IT services firm Unisys for the project. So far, it has reduced the number of its servers by a ratio of 12 to 1, which it said had “significantly” reduced power and air conditioning usage.

Another part of the cost saving is expected to come from the removal of old hardware, improvements in service continuity, the simplification of disaster recovery, and increased hardware utilisation.

Unisys is providing consultancy services for assessing, planning, executing and testing the server virtualisation. A number of Nationwide’s production and business applications are also now virtualised.

Peter Stafford, IT director at Nationwide, said “some very complex issues” relating to planning the virtualisation had been solved, and the scheme was set to deliver “business benefits”.

Nationwide already works with Unisys for a number of other services, including cheque processing.

The building society is also undergoing a £300 million business transformation programme, under which it is moving to SAP service oriented architecture technology to improve business processes. In the programme, called Voyager, it is working with IBM, Capgemini and KPMG.

A voice and data convergence programme is also in place, under a £160 million, seven-year managed services agreement with BT.

Last September, when Nationwide announced a merger with the Cheshire Building Society and Derbyshire Building Society, it said it had no plans rip and replace legacy systems.