OpenStack Powered Clouds: The Business Case

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1 OpenStack Powered Clouds: The Business Case Contents Abstract. 1 Telcos and Hosters are in Position. 2 The IaaS Opportunity. 2 OpenStack as a Strategic Move. 3 The Dell OpenStack-Powered Cloud Solution. 3 The Dell/AMD Advantage. 4 Dreamhost: Case in Point. 5 Benefits Beyond Technology. 6 Conclusions. 7 Brought to you compliments of: Abstract Cloud computing has shifted from an emerging compute model to a significant business opportunity for telcos and hosters. Eager to gain competitive advantage by quickly scaling data processing, Internet, and other IT services without dramatically increasing overhead, enterprises are looking for well-equipped Infrastructure-as-a-Service (IaaS) providers. With ready client bases, technology infrastructures, and in-house expertise in place, telcos and hosters are poised to meet growing IaaS demands if they adopt a platform that ensures performance while protecting their profit margin. Designed to deliver high performance with power, cooling, and space efficiency, Dell s OpenStack -Powered Cloud Solution includes the OpenStack open source (no licensing fees) platform and PowerEdge C6105 servers with AMD Opteron processors. Delivering the highest performance and lowest power consumption in the smallest footprint, the Dell OpenStack-Powered Cloud Solution positions telcos and hosters to take fast, profitable advantage of cloud computing market opportunities Dell and Advanced Micro Devices, Inc.

2 Telcos and Hosters are in Position The call for corporate IT to support rapidly growing workloads without major capital investment or additional overhead has executives thinking seriously about cloud services. Small and midsize companies want the advantages of consolidated services from a manageable number of vendors. Enterprises need flexible infrastructure access that supports seasonal, temporary, or opportunistic processing increases without requiring significant data center expansion. Service providers are indeed gearing up to meet market demand. IDC s Worldwide Enterprise Server Cloud Computing Revenue Forecast expects commercial cloud computing offerings to expand the server market from $582 million in 2009 to $718 million in IDC Cloud Computing Market Forecast 800 Market Size ($ millions) Year The revenue forecast is good news for telcos and hosters that are eager to expand deeper into current customer organizations and expand their overall client base. Providing new, high-value cloud services allows telcos and hosters to broaden their reach with security, storage, backup, and other offerings that are critical to IT departments. The IaaS Opportunity When opportunity presents itself, it s great to be ready. Telcos and hosters can provide cloud services with many business strategy components in place. IaaS is attractive to businesses that want to outsource all or a portion of their infrastructure. Rather than purchasing, deploying, and maintaining servers, storage devices, and networking equipment and incurring the associated capital and overhead costs they want to trust a service provider that owns, manages, and rents out the equipment. The rented infrastructure is considered a utility, and customers are billed according to consumption. The more computing, storage, and connectivity a client uses, the more they pay. 1 Enterprise Cloud Server Hardware Market to Reach $12.6 Billion by 2014, TheHN News, May 11, 2010, Dell and Advanced Micro Devices, Inc.

3 Telcos and hosters meet the IaaS market with infrastructures and billing mechanisms already in place. Their infrastructures have been developed for heavy processing loads, they have a proven ability to manage technology, they are known for their ability to service large numbers of users, and their usage meter billing systems are up and running. Just as important, telcos and hosters already employ technology experts and developers who can deploy, maintain, and engineer infrastructures that deliver high-performance, high-reliability, efficient IaaS offerings. Given their technology, core competencies, personnel, and ready client bases, telcos are expected to take a lead in the IaaS market. According to STL Partners research, telcos could command 25% of the market. 2 There s every reason for business strategists inside telcos and hosters to be planning IaaS offerings. Their most important decisions could be around technology that can deliver the best services at the lowest cost. OpenStack as a Strategic Move In July 2010, cloud infrastructure developer Rackspace and NASA opened their code bases under the name OpenStack to provide an open source operating system that provisions and manages large cloud infrastructures that include virtual machines. Users benefit from a redundant and scalable platform on which to build their private, public, or hybrid clouds. Because OpenStack is open source, telcos and hosters don t have to lock into a single, proprietary vendor strategy. In fact, they are able to point their own technicians and developers at creating a cloud infrastructure that delivers differentiated IaaS offerings that fit their own business model. For example, they can hook OpenStack into their data center environment and billing systems. OpenStack is proven software that is currently being used by a growing number of enterprises, service providers, VARs, research institutions, and other organizations deploying large-scale cloud computing operations. 3 It is fully multi-tenant to support IaaS and other cloud models and can scale to thousands of compute nodes. Multiple network models, block storage options, and hypervisors are supported. A six-month community-supported development cycle adds new features. Besides offering compelling technology, OpenStack offers real cost advantages. The code is open source; there are no licensing fees. That immediately reduces costs and increases profit margins. It also allows telcos to take control of their service offerings by eliminating reliance on any single vendor that has its own business strategy to promote. There are currently over 100 leading companies around the world participating in the OpenStack community. Dell and AMD both signed on early as players, after recognizing their applicability to market-leading solutions that they could offer together and the operational advantages for their customers. The Dell OpenStack-Powered Cloud Solution The Dell OpenStack-Powered Cloud Solution packages the components of a cloud that quickly delivers high-performance, flexible, and scalable IaaS offerings. Telcos and hosters benefit from performance that meets client requirements and cost-effectiveness that maximizes revenue. 2 Cloud 2.0: don t blow it, telcos, Telco 2.0 Research, September 2011, 3 Openstack.org Dell and Advanced Micro Devices, Inc.

4 OpenStack and Crowbar OpenStack is the cloud operating system for the Dell OpenStack-Powered Cloud Solution. Dell developed the open source Crowbar software framework to help quickly stand up an OpenStack cloud in hours instead of days. In fact, telcos and hosters are able to roll out OpenStack in as little as two hours. 4 Fast implementation ensures that services are up and running and producing revenue as soon as possible. Modular in design, Crowbar includes barclamps that help a variety of other open source software programs or components work with OpenStack. Dell and other members of the OpenStack community developed barclamps to speed installation, setup, and ongoing management of cloud and cluster environments. For example, there s a Dell-developed Apache Hadoop barclamp, and Dreamhost developed a Ceph barclamp for its Dell OpenStack-Powered cloud storage service. VMware has developed a Cloud Foundry barclamp that maintains, expands, and architects instances. PowerEdge C6105 Servers with AMD Opteron Processors The Dell OpenStack-Powered Solution starts with Dell PowerEdge C6105 servers with AMD Opteron processors. They put scalable, efficient computing power in 2U to help build highly efficient IaaS services. Outfitted with the solution, telcos and hosters use PowerEdge C6105 servers to go after revenue while maintaining healthy profit margins. The Dell/AMD Advantage Dell and AMD have fully embraced cloud computing, becoming early technology leaders and establishing their understanding of key success metrics. The Dell OpenStack-Powered Cloud Solution supports high-end embedded systems and IaaS services that are supplied through hyperscale environments. Performance and cost-effectiveness are both central characteristics of telco and hoster data centers, which need to attract clients with superior service and secure profit margins through cost-efficient operations. Dell developed the PowerEdge C6105 server to supply high performance and allow for easy expansion, while reducing the overall server footprint and decreasing power and cooling consumption. Four servers are co-located in a one 2U chassis to increase compute density. Each server can be maintained and serviced separately to increase uptime. Twelve 3.5-inch or inch hard drives hot-pluggable serial-attached SAS, SATA, or SSD also share the chassis. Memory can expand to 192GB DDR3. 5 The shared infrastructure allows servers to share two high-efficiency, hot-pluggable, redundant power supplies (which are rated 92% efficient), and high-efficiency fans reduce cooling requirements. Performance and additional power consumption savings are realized with AMD Opteron 4100 and 4200 series processors. HyperTransport Technology boosts communication speeds by up to 48x over other available processors. 6 Lower latency enables faster content flow, which 4 Tested in Dell labs 5 PowerEdge C6105 Rack Server product information, 6 AMD HyperTransport Technology, Dell and Advanced Micro Devices, Inc.

5 is especially important for voice and video. Multi-core processing distributes processing tasks across cores in real time to enable larger processing loads. AMD Opteron processors also increase management efficiency through AMD-Virtualization or AMD-V which optimizes virtual environments and allows live migration of virtual machines across available AMD Opteron processors regardless of generation. Rapid Virtualization Indexing performs functions typically handled by CPU software, which decreases switching times. Power efficiency is achieved through several AMD technologies. The eight-core Opteron processor operates at less than 5 watts per core, while the new C6 power state reduces processor power consumption at active idle by up to 37%. 7 Telcos and hosters are able to double the number of servers without increasing overall power draw. Enhanced AMD PowerNow! Technology provides enhanced power management across all cores. Each core varies its own frequency according to current workload requirements via Independent Core Technology, and Dual Dynamic Power Management enables each processor to maximize the power management benefit without compromising on performance by reducing idle-time consumption. AMD SmartFetch Technology allows cores to enter halt state, which reduces the amount of power consumed during idle times. Cooling requirements are decreased with AMD CoolCore Technology, which automatically cuts power to unused transition areas to reduce power draw and heat generation. Together, Dell and AMD have pioneered server technology aimed at cloud computing and the IaaS model. Dell was one of the first members of the OpenStack community. Now, it collaborates with AMD to produce Crowbar software framework enhancements and build barclamps to help speed the rate of innovation. AMD introduced dual-core benefits like Direct Connect Architecture, which reduces bottlenecks in data being routed to and from the CPU. Dreamhost : Case in Point Dreamhost is one of many companies building cloud services using the Dell Openstack-Powered Cloud Solution components. A leading-edge hosting company, Dreamhost continually looks for ways to make its data center operations more efficient. Wanting to accelerate the deployment process while saving time on programming, Dreamhost found its way to Dell, Crowbar, and PowerEdge C servers. Dreamhost had already developed Ceph, a storage and file system that autoscales and manages many petabytes of data. Its development investment in Ceph and OpenStack narrowed its focus to Dell, a partner that was committed to an open source strategy. Crowbar gave Dreamhost the tools it needed to routinely improve the efficiency of its cloud infrastructure and reduce costs. The Crowbar software framework was designed to significantly reduce deployment time and has saved Dreamhost an estimated four to six months of development time. Dreamhost also uses a variety of Dell servers, including the Dell PowerEdge C6105 rack server. Because both companies are members of the OpenStack community, Dreamhost developers and 7 AMD HyperTransport Technology, Dell and Advanced Micro Devices, Inc.

6 technicians are confident that they are well aligned with their Dell counterparts. Their collaboration helped ensure Dreamhost that it could successfully launch services, and it has already begun to measure efficiencies. Benefits Beyond Technology Delivering high performance, cost-efficient IaaS services to a ready market does present telcos and hosters with a huge opportunity. However, when the business model and profitability rely on technology that has to provide competitive advantage, scale quickly, and preserve margins, it s essential for telcos and hosters to gain access to support and expertise. The OpenStack community and Dell are all aligned to keep telcos and hosters positioned to deliver and support market-leading IaaS services. OpenStack Community and Resources As members of the OpenStack community, telcos and hosters benefit from a number of benefits that go beyond access to free, open source code. A six-month release cycle is supported by bi-annual design summits that bring the development community together to specify upcoming releases. Not only does this provide regular enhancements, but it also gives members direct input into upgrades. Three core projects organize development. The OpenStack Compute project provisions and manages large networks of virtual machines that create redundant and scalable cloud computing platforms. Redundant, scalable object storage that uses clusters of servers to store petabytes of data is developed through the OpenStack Storage project. And Open Stack Image Service engineers discovery, registration, and delivery services for virtual disk images. Members stay current with community events, share information and advice, follow development progress, and connect with other members through a wide variety of communication devices, including a contributor s wiki; member lists for developers, partners, users, and experts; a forum that lists information about core and future projects and answers general questions; meetings and real-time online discussions; meeting logs; documentation; social networks and blogs; and the OpenStack website. Participating companies make up the OpenStack ecosystem and are able to develop and list commercial products that work with the platform. The community is international in scope and includes developers, systems integrators, hardware vendors, service providers, telcos, hosters, and others who are interested in collaborating on a ubiquitous cloud platform. Dell: Expertise in the Cloud Dell s cloud expertise has been gained through implementations at leading-edge cloud companies, including Microsoft, Facebook, and Lawrence Livermore Labs, as well as large telcos, hosters, and institutional universities. By helping those organizations establish solid cloud infrastructures, the Dell Data Center Solutions team gained a clear understanding of business models, operational requirements, and opportunities presented by new computing models. In fact, the development of PowerEdge C servers was inspired by hyperscale cloud computing environments that required Dell to provide a server solution that would deliver high performance Dell and Advanced Micro Devices, Inc.

7 while increasing density and lowering operational costs. Having engineered solutions that have met those requirements, Dell continues to focus on solutions that meet the emerging trends in the cloud computing market. A broad range of services allows telcos and hosters to leverage Dell s expertise as needed. Cloud assessment and design services help specify processor and interconnectivity, storage and SAN, and systems management and job scheduling requirements. Implementation time is reduced through configuration and testing inside Dell labs prior to shipping and on-site assistance. And Dell technicians and developers are available for ongoing support and build-out assistance. Service delivery can be customized to include specific contacts, particular services, and preferred speed of response. Conclusion As companies continue to look for ways to quickly provide or expand their cloud service offerings without extending technology investments and IT overhead they are increasingly turning to IaaS. Telcos and hosters are well positioned to meet increasing market demand for cloud services with infrastructures that allow their clients to quickly access on-demand resources without extending their own data centers. However, in order to remain competitive with differentiated offerings that perform and scale to demands, they require agile, cost-effective cloud platforms. The Dell OpenStack -Powered Cloud Solution contains the market-leading, open source Open- Stack cloud operating system; Dell s Crowbar software framework to speed deployment; Dell PowerConnect switches; PowerEdge C6105 servers; as well as a scalable reference architecture. Including AMD Opteron processors, the servers help maximize performance while reducing space, power, and cooling costs with shared infrastructure. 8 With OpenStack and Dell/AMD technology and expertise, telcos and hosters can quickly deliver profitable IaaS cloud services. 8 Shared Infrastructure: Scale-Out Advantages and Effects on TCO, Dell Technical White Paper, products/pedge/en/shared_ Infrastructure_Scale_Out_Advantages_and_Effects_on_TCO.pdf Dell and Advanced Micro Devices, Inc.