Established in 1999 (And Acquired by Germany-Based United Internet in 2006), Fasthosts

Microsoft Virtualization: Data Center to Desktop Customer Solution Case Study

Hoster Expands Business, Cuts Costs, by Using Hyper-V to Offer Virtual Servers

Overview “With Hyper-V, we were able to plug a gap in the Country or Region: United Kingdom marketplace and quickly create a flexible cloud offering. Industry: Hosting We’re able to give customers a scalable … hosting option Customer Profile Fasthosts is a U.K.-based hosting with pay-as-you-grow pricing.” provider that serves the home and Steve Holford, Marketing Director, Fasthosts business markets through direct and partner sales. The firm has 160 Fasthosts provides hosting services to individuals and businesses employees. in the U.K. and United States. Eager to better meet customer

Business Situation needs and expand its business, Fasthosts deployed Windows Fasthosts wanted to help its small and Server 2008 R2 Datacenter with Hyper-V technology and created midsize business customers take advantage of “cloud” computing— a virtual private server (VPS) offering. It used the Microsoft hosting applications offsite in a data Dynamic Data Center Toolkit for Hosters to get its VPS offering center accessible via the Internet—and also wanted to expand its offerings to market in just 16 weeks, and is relying on Microsoft System without major hardware investments. Center data center solutions to provide VPS backup, remote

Solution server monitoring, and dynamic performance scaling. Fasthosts Fasthosts used Windows Server 2008 R2 expects its new solution to become the largest part of its Datacenter with Hyper-V along with Microsoft System Center solutions to business, and is also excited to provide a growth opportunity for create a virtual private server offering channel partners and more flexibility and higher availability to that its direct customers and channel partners provision online. end customers. The company also expects to greatly reduce its physical server and customer support costs through more Benefits Expansion of addressable market resilient and intuitive solutions. New revenue streams for partners More flexibility for end customers Lower operating costs Situation businesses and also give these channel Established in 1999 (and acquired by partners a new way to make money.” Germany-based United Internet in 2006), Fasthosts has grown to be a leading hosting provider in the United Kingdom, Solution with recent expansion into the United Fasthosts had used VMware virtualization States. Fasthosts focuses on the software to achieve server consolidation mainstream hosting market, selling website efficiencies with internal systems, but had hosting, domain names, hosted email not used it to create virtual servers for services, and dedicated servers direct to customers. “We looked at how we wanted end customers and also through an to implement a virtual-server product extensive partner channel. Based in offering and spent a good deal of time Gloucester, England, Fasthosts has more understanding which virtualization platform than 160 employees and serves more than presented the best opportunity now and 400,000 direct customers and many more going forward,” Holford says. “We were through its network of 5,500 reseller very familiar with Microsoft operating partners. systems and with VMware, but we wanted to understand all the product roadmaps.” In mid-2009, Fasthosts observed that the U.K. hosting market had matured and In mid-2009, Fasthosts evaluated VMware, become ultracompetitive. The company the Windows Server 2008 R2 operating needed to branch out into new, innovative system with Hyper-V virtualization areas to grow further. This realization technology, and Citrix Xen, which was used coincided with the growth of “cloud” by a sister company. It also briefly looked at computing—running business applications Parallels Virtuozzo. in off-premises, third-party data centers. Fasthosts saw that both small businesses Fasthosts felt that Hyper-V had everything and their local IT solution-provider partners it needed and that the coupling of Hyper-V needed help figuring out how to take with Microsoft System Center data center advantage of this new deployment model. solutions provided capabilities no other vendor offered. Specifically, the Microsoft “Most small businesses have relationships virtualization and data-center management with local solution providers who are their solutions would give channel partners and trusted technology advisors,” says Steve end customers the ability to customize Holford, Marketing Director for Fasthosts. their virtual servers and gain dynamic “These local partners traditionally help feedback and alerts on server performance. small businesses create websites, set up By using System Center products to fashion on-premises servers, or establish and the online server configuration process, manage dedicated hosted servers. We Fasthosts could offer pay-as-you-go pricing wanted to create a virtual private server and also ensure full resilience so that if any offering [dedicated servers running as hardware component failed, the virtual virtual machines inside physical host server(s) would continue to run. servers] that would meet the needs of small

26 “These were all services that would be very time-to-market. VMware solutions were not beneficial to customers and provide as well-rounded.” additional revenue opportunity for partners,” Holford says. “The ability to offer In March 2010, Fasthosts launched DCoD rich add-on services, scalability, and targeted directly at end customers. A few resilience was just not possible with the weeks later the company rolled out a other virtualization platforms we evaluated. similar offering purely for indirect sales Microsoft gave us a much richer through channel partners under the new proposition.” brand name Rise.

Creating a Virtual Private Server Fasthosts uses Dell PowerEdge M610 blade Offering servers and Dell EqualLogic PS6500 storage In late 2009, Fasthosts deployed Windows area networks (SANs) to host its DCoD Server 2008 R2 Datacenter, an edition that infrastructure. Fasthosts created 455 virtual provides unlimited licensing for all guest machines on 26 servers within the first operating systems as part of the host- three months of launch but plans to create server license. Fasthosts worked with the up to 10,000 virtual machines on as many Microsoft Partner team in using the as 160 host servers. Its highest virtual-to- Microsoft Dynamic Data Center Toolkit for physical server density is 30 virtual Hosters to guide the rollout of its virtual machines per host. private server offering—which it calls Data Center on Demand (DCoD). The Microsoft Provisioning and Monitoring Online Dynamic Data Center Toolkit for Hosters Servers contains guidance, sample code, best End customers and channel partners place practices, and collateral to help hosting VPS orders by using their personal Rise providers rapidly build and launch Control Panel on the Fasthosts website or managed services powered by Windows over the phone. Customers and partners Server 2008 Hyper-V and Microsoft System choose the number of virtual CPUs, amount Center products. It also contains marketing of memory and storage, and operating advice to help hosters advertise and sell system desired; the number of Internet managed services and solutions. Protocol (IP) addresses needed; and the reliability level required. A running price “The Dynamic Data Center Toolkit was very total appears as selections are made and powerful in helping us deliver our VPS modified. service,” Holford says. “For example, understanding how to use Microsoft The Fasthosts staff uses the Windows System Center Virtual Machine Manager PowerShell command-line interface and 2008 R2 to give customers full control over scripting language to create scripts that their servers, and Microsoft Operations automate the construction of the virtual Manager 2007 R2 to capture machine server to the customer’s exact monitoring statistics was a real competitive specifications. Microsoft System Center differentiator and it dramatically cut our Virtual Machine Manager 2008 creates the virtual machine on the host server by using

36 templates already containing the desired to provide multiple time-delayed backups operating system. When the server is ready of customer workloads. —in just a few minutes—System Center Configuration Manager 2007 notifies the The company is also working with Fasthosts billing system, which sends the Microsoft on hosting the Red Hat and customer an email message announcing CentOS Linux operating systems and Linux- that the server is ready. based workloads on its Hyper-V-based VPS offerings. “We are working closely with Fasthosts use Microsoft System Center Microsoft product teams to ensure glitch- Operations Manager 2007 to monitor VPS free Linux hosting on Hyper-V, which will performance and dynamically move virtual give us another competitive advantage and machines around the host servers as the ability to meet more customer needs,” resource consumption moves up and down. Holford says. If a customer needs to bump up its VPS resources, System Center Operations Benefits Manager traps the monitoring data and By using Windows Server 2008 R2 forwards it to the Fasthosts customer Datacenter with Hyper-V, System Center relationship management system, which products, and the Microsoft Dynamic Data generates an email or SMS alert to the Center Toolkit for Hosters, Fasthosts was customer, informing it that resource able to get a VPS offering to market in just utilization is high and enabling it to scale 16 weeks and create a competitive up processor and memory resources by differentiator for itself and its channel using the online control panel. partners. The company expects the DCoD channel market to become the largest part The company is working to automate of its business, thanks to all the value- physical server deployment by using added services that partners can provide System Center Configuration Manager. As and the flexibility and cost-effectiveness soon as Fasthosts technicians rack a new that end customers will realize. Best of all, server, System Center Configuration with virtualization, Fasthosts can Manager will take over the installation of dramatically expand its server offerings the base Hyper-V server build, customize without dramatically expanding its physical the deployment, configure the network, hardware investment. It also can offer and add the host to the cluster managed customers 99.99 percent availability due to by System Center Virtual Machine Manager. virtualization clustering. Configuration Manager will then begin adding virtual private servers to the newly Dramatic Expansion of Channel Business available node. Currently, about 80 percent of the company’s business comes from sales to Fasthosts is also deploying System Center direct customers. However, now that it has Data Protection Manager 2007 to provide a richer suite of solutions for the channel, backup services to customer virtual private Fasthosts expects that the Rise channel, or servers. Data Protection Manager works in indirect market, will grow to become the conjunction with the Dell EqualLogic SAN largest share of its business. “We see the

46 direct business continuing to grow In fact, Fasthosts is busy developing healthily, but we will get significantly more solutions-based services for partners—out- growth through our channel business as it of-the-box “themed” solutions such as matures, because 5,500 channel partners virtual servers for e-commerce, disaster dramatically extends our own sales efforts,” recovery, storage, backup, collaboration, Holford says. “With Hyper-V, we were able email, and so forth—all instantly to plug a gap in the marketplace and deployable over the web. Channel partners quickly create a flexible cloud offering. can also offer load balancing, firewall We’re able to give customers a scalable, services, and other services that give them hardware-independent hosting option with more competitive differentiation. “We are pay-as-you-grow pricing.” also moving to connect our VPS offering to on-premises solutions so that customers New Revenue Streams for Partners can link the two environments,” Holford In fact, Fasthosts believes that Hyper-V says. “For example, a customer might want paired with System Center solutions to constantly update its on-premises enables it to offer channel partners a richer applications with those running online.” menu of value-added services. More Flexibility for End Customers Jeff Lenton, Chief Executive Officer of The ability to cost-effectively host critical IT In2itive, a hoster in the U.K., says, “We’ve services off-premises and dynamically scale been party to the Rise channel proposition computing resources up or down as for a time now and believe this is a service needed offers small businesses the kind of that IT consultancies, value-added resellers, flexibility and scalability that heretofore and system integrators will benefit from. only enterprise companies have enjoyed. “If The support to build cloud services into our a small retail business knows that it is going go-to-market proposition is clear, and the to have a busy weekend, it can upgrade its solution is very impressive.” VPS resources just for that weekend, and then downgrade resources when the peak “Channel partners can serve a lot more period is over,” Holford says. “With our VPS customers by using a virtual server model offering, we’re able to give customers the than they ever could using an on-premises flexibility that they need.” model,” Holford adds. “Traditionally, most of their business comes from selling on- Lower Operational and Support Costs premises services and support. But with our Today, Fasthosts has about 10,000 servers VPS offering, partners can expand their in its data centers, most of which are market to customers that cannot afford on- dedicated physical servers. However, premises equipment, don’t have space for operating a data center with physical physical servers, and don’t want to worry servers alone presents scalability and CPU about ensuring connectivity. By using utilization problems. “It’s not unusual for a System Center, we can offer add-on data center to run at 30 percent of CPU services that provide differentiation.” capacity,” Holford says. “It’s a big expense for us to operate a lot of servers running far below their potential. By using virtualiza-

56 tion, we can securely run multiple customer Microsoft Virtualization workloads on a single physical server, and Microsoft virtualization is an end-to-end customers pay only for the CPU resources strategy that can profoundly affect nearly that they need. With virtualization, we can every aspect of the IT infrastructure vastly reduce our data-center space and management life cycle. It can drive greater rate of physical server growth. We can also efficiencies, flexibility, and cost pass those savings on to customers.” effectiveness throughout your organization. From accelerating application deployments; By selling through channel partners, to ensuring systems, applications, and data Fasthosts also reduces end-customer are always available; to taking the hassle support costs. Even for its direct-to- out of rebuilding and shutting down customer business, DCoD enables a servers and desktops for testing and reduction in support costs, because development; to reducing risk, slashing customers self-service and self-manage costs, and improving the agility of your their server needs. “With dedicated servers, entire environment—virtualization has the increasing CPUs or memory places a heavy power to transform your infrastructure, burden on our engineering staff, because from the data center to the desktop. they have to open up physical servers,” Holford says. “With virtual servers, For more information about Microsoft customers have direct access to their online virtualization solutions, go to: control panel, can slide performance up or www.microsoft.com/virtualization down, and can even see the cost before they make a purchase decision.”

Higher Server Availability and Resilience Another point of competitive differentiation for Fasthosts is the ability to provide customers with higher availability using the VPS offering. “A virtual environment is much more resilient than a physical-server environment, which has many opportunities for outages,” Holford says. “With our VPS offering, we are aiming to move to 99.99 percent availability, which is a significant improvement.”