Cloud Service Saves Hosting Provider 65% on Hardware Costs and Increases Revenue

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1 Microsoft Virtualization: Data Center to Desktop Customer Solution Case Study Cloud Service Saves Hosting Provider 65% on Hardware Costs and Increases Revenue Overview Country or Region: United States Industry: Hosting, Application-Service, and Software-as-a-Service Providers Customer Profile Adhost Internet provides complete server colocation, dedicated servers and hosting solutions featuring SAS 70 Type II certification, 24x7 technical support and 24x7 client access. Business Situation Microsoft Gold Certified Partner Adhost wanted to add a new cloud solution to their existing set of hosting services. Solution Adhost chose to build their cloud solution using Microsoft virtualization and cloud technologies, with Windows Server 2008 R2 Hyper-V and System Center Virtual Machine Manager as the foundation. Benefits 65% savings on hardware costs 80% savings on power New revenue opportunities Greater customer flexibility Microsoft provides us with a platform that is rich in capabilities and helps us stay away from commodity hosting. We can focus on value-added services that improve our customers bottom line. Will Riffle, Adhost CEO and President Seattle-based Adhost provides an array of hosting and web development solutions to over 3500 business customers throughout the Pacific Northwest. The company focuses on providing a high level of customer service and hosting customization. Adhost wanted to build a new cloud solution to deliver additional value and meet their customer s evolving needs. After evaluating several virtualization technologies for building their new cloud offering, including VMware, Adhost chose to build their cloud using Microsoft virtualization and cloud technologies, with Microsoft Windows Server 2008 R2 Hyper-V and System Center Virtual Machine Manager as the foundation. With the new cloud solution, the company will save 65% on hardware costs, 80% on power, increase revenue opportunities, and offer greater flexibility for customers.

2 The Adhost team has been a terrific partner for us since we started working together years ago. We really feel like their entire team are partners with us and have our backs. It s a great feeling especially when our mutual client, the New Orleans Saints, went to the Super Bowl and the Adhost servers handled all that traffic! Nate Thompson, Cypress Consulting Situation Seattle-based Adhost, a Microsoft Gold Certified Partner, is one of the Pacific Northwest s leading providers of web hosting, e-commerce solutions, web development services, and marketing tools. It manages two high-tech data centers in Seattle, Washington, and serves over 3500 business customers across the region. The company offers a core set of hosting services to meet the varied needs of their clients, including: Co-location Services- featuring worldclass data center capabilities Shared Hosting- for many standard business websites High Availability- load-balanced, scalable Web servers deliver 99.99% uptime PCI Compliant Hosting- custom dedicated solutions meet tough data security standards Database Hosting- featuring Microsoft SQL Server In a sea of commodity hosting offerings, Adhost differentiates their solutions with an exacting level of customer service that sets the company apart. We are ardent about customer service. Right from the beginning, every customer is assigned an Account Manager and a Technical Lead to get them up and running and solve any issues that come up in the course of the relationship, commented Will Riffle, Adhost CEO and President. Most customers come to Adhost in search of solutions for their unique situation, such as PCI compliance for credit cards, HIPAA compliance for healthcare, or a complex hosting infrastructure to meet a specific set of business requirements. Adhost focuses on adding customer value by providing customized solutions. In fact, the majority of the firm s customers have some degree of customization as part of their overall solution. We really try to develop a deep understanding of our customer s business so we can develop the best solution that meets their specific needs. For most businesses, a cookie cutter hosting package does not solve their issues. We want to be their strategic hosting partner and help solve business problems, continued Riffle. The high-touch customer service approach is extremely valued by Adhost s customer base. Testimonials by two representative customers are indicative of the sentiment of most customers: We met with and toured many of the top data center facilities in the region and determined that Adhost s commitment to service and available resources were perfectly in line with Swizznet s core values and expectations for high quality service and reliability for our users. Kristin Callen, Swizznet The Adhost team has been a terrific partner for us since we started working together years ago. We really feel like their entire team are partners with us and have our backs. It s a great feeling especially when our mutual client, the New Orleans Saints, went to the Super Bowl and the Adhost servers handled all that traffic! Nate Thompson, Cypress Consulting Traditionally, customers who require complete administrative control of their servers or require specialized security profiles must go with a dedicated server or a co-located approach. Either of these approaches come with higher costs and may require IT resources to manage the servers. A shared hosting environment is a cost-effective approach but does not offer the level of administrative control that some customers require. Since the company s inception in 1995, Adhost has evolved their solutions based on their customer s needs. Our business has been a progression of what our

3 We chose Microsoft s Windows Server 2008 R2 Hyper-V on the basis that it provided the fastest, cheapest, easiest, and most flexible approach to building out our cloud infrastructure versus any other approach we considered. Mike Smith, Adhost Chief Technology Officer customers want. We are always asking ourselves what will best suit our customers. We try to focus on what adds the greatest value for them and then do it in a better way, stated Riffle. Over the last year, Adhost began looking into adding a cloud solution to their customer offering as it can provide the best of all hosting options- a low cost and complete control over the environment. A cloud offering would bring new benefits to Adhost customers and provide new and better ways to manage the hosted infrastructure, including the ability to easily turn on and off services, automatically provision servers, and scale according to needs while providing a stable and predictable environment. With the decision to move forward with the development of a cloud offering, Adhost needed to determine the specific approach and the underlying technologies to use. Solution Adhost was intrigued by the capabilities and possibilities of a cloud environment. They wanted to build an environment for customers that provided a high level of flexibility to meet their needs, while at the same time was easy to manage and costeffective to run. The company evaluated several virtualization technologies for building their new cloud offering, including VMware and Microsoft. Adhost chose to build their cloud using Microsoft virtualization and cloud technologies, with Microsoft Windows Server 2008 R2 Hyper-V and System Center Virtual Machine Manager as the foundation. Hyper-V, the Microsoft hypervisor-based server virtualization technology, enables organizations to make the best use of their server hardware investments by consolidating multiple server roles as separate virtual machines (VMs). Everything can run on a single physical machine and also efficiently run multiple operating systems Windows, Linux, and others in parallel, on a single server, and fully leverage the power of x64 computing. We chose Microsoft s Windows Server 2008 R2 Hyper-V on the basis that it provided the fastest, cheapest, easiest, and most flexible approach to building out our cloud infrastructure versus any other approach we considered, commented Mike Smith, Adhost s Chief Technical Officer. Adhost chose to go with Microsoft for three core reasons. First, from a cost standpoint, Adhost was able to save approximately 20% over VMware in total licensing costs to build out the cloud infrastructure. Second, Windows Server 2008 R2 Datacenter Edition Hyper-V provides greater configuration options which will allow Adhost to incorporate a higher level of customization to their cloud. Finally, Adhost values their ongoing partnership with Microsoft. As a Gold Certified Partner, Adhost benefits from an array of resources from technical, to operational, to sales and marketing that provide them with business advantages. They also appreciate the flexible licensing structure of the Services Provider License Agreement (SPLA). SPLA enables hosting providers and ISVs with a hosted offering to license Microsoft products on a monthly basis to provide services and hosted applications to their end customers. Adhost s initial cloud platform will support up to 400 virtual private servers (VPS) and provides the ability to endlessly scale up as customers come on board. The infrastructure hardware consists exclusively

4 The ability to integrate Active Directory was huge for us and I cannot overemphasize how important that is for us. It s the backbone of our environment and forms the basis for our ability to set security and access policies in a cloud." Mike Smith, Chief Technology Officer of Dell servers. The company used the Microsoft Dynamic Datacenter Toolkit to quickly and easily set up their infrastructure. The toolkit contains step-bystep deployment guidance and helps hosting providers establish appropriate service level agreements (SLAs) and create portals that their customers can use to directly provision, manage, and monitor their infrastructure. Adhost s cloud will also feature Active Directory integration. The ability to integrate Active Directory was huge for us and I cannot overemphasize how important that is for us. It s the backbone of our environment and forms the basis for our ability to set security and access policies in a cloud. We can provide our customers with their own environment across multiple virtual machines, says Smith. The new Adhost cloud will feature automated provisioning. Adhost customers will be able to sign up for the services and add a wide array of software, such as SQL, Exchange, SharePoint, and many other products automatically. Benefits Adhost differentiates themselves with a high level of service and an ability to take on the complex challenges their customer s face. At the same time, hosting is a competitive business and managing costs, improving revenue, and delivering innovative new solutions to meet customer needs is critical for long-term success. With the deployment of Microsoft Windows Server 2008 R2 Hyper-V, Adhost is able to provide a compelling cloud offering and gain significant operational efficiencies. Higher Revenue per Square Foot The new cloud infrastructure is highly efficient. Adhost can support 400 dedicated hosts using only 16 servers. Previously this would take up to 3 times the number of servers to accomplish a comparable infrastructure with dedicated servers or colocation. As a result, the company is able to make better use of existing space and increase revenues per server. Enhanced Customer Service Capabilities Customers have self-serve access to their entire environment and can make changes, add services, and monitor performance as needed. In addition, with System Center, the Adhost support team has greater insight into the health of the environment and can take appropriate actions on behalf of their customers if required. As a result, the entire technical support team is more effective, support costs are lower, and customer responsiveness is improved. Reduced Costs The Virtual Private Server environment significantly reduces hardware requirements by as much as 65% for Adhost. In addition, with lower hardware requirements, electrical costs to run and cool the data center will be 80% lower for the cloud environment. One of the reasons why we chose Microsoft is the separation you can achieve between your customers for a lower cost than going through a dedicated or a co-located solution. You can also greatly enhance the security profile and customization for less cost than it would take to do with dedicated equipment, comments Riffle. Greater Flexibility Adhost customers now have the greatest number of options to meet the entire spectrum of their needs, from cloud, to dedicated, to co-location. In addition, customers have maximum flexibility on how they can configure, manage, and expand their infrastructure. Our customers want to be able to have an environment that is

5 For More Information For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) In Canada, call the Microsoft Canada Information Centre at (877) Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: For more information about Adhost Internet products and services, call or visit the Web site at: solely dedicated to them; they want full control over their server. With VPS, the customer can be the system administrator of their own world. You simply can t do that with a shared hosting service, says Smith. Microsoft provides us with a platform that is rich in capabilities and helps us stay away from commodity hosting. We can focus on value-added services that improve both our customers as well as our own bottom line, comments Riffle. Microsoft Virtualization Microsoft virtualization is an end-to-end strategy that can profoundly affect nearly every aspect of the IT infrastructure management lifecycle. It can drive greater efficiencies, flexibility, and cost effectiveness throughout your organization. From accelerating application deployments; to ensuring systems, applications, and data are always available; to taking the hassle out of rebuilding and shutting down servers and desktops for testing and development; to reducing risk, slashing costs, and improving the agility of your entire environment virtualization has the power to transform your infrastructure, from the data center to the desktop. For more information about Microsoft virtualization solutions, go to: Software and Services Microsoft Server Product Portfolio Microsoft Hyper-V Server 2008 Microsoft System Center Virtual Machine Manager 2008 R2 Windows Server 2008 R2 Datacenter Technologies Active Directory Clustering Services Hyper-V Internet Information Services 7.5 Hardware Dell Servers This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published May 2010