4-page Case Study - Posted 9/16/2008

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Hostbasket

Hosting Company Expands Services and Reduces Costs with Server Virtualization

Hostbasket is a Belgian hosting company that strives to keep its services fresh, innovative, and price-competitive. With success and growth, the company acquired a burgeoning number of servers, which required significant staff time to deploy and maintain. Hostbasket turned to virtualization to reduce its servers and server management workload. Using the Windows Server® 2008 operating system with Hyper-V™ technology, Hostbasket plans to create 300 virtual machines and retire 60 physical servers. More importantly, Hostbasket can quickly create new offerings, giving customers more options and greater control over their hosted applications. Hostbasket uses Microsoft® System Center Virtual Machine Manager 2008 to simplify server setup and management. Because Hostbasket can better utilize its servers, it earns higher margins from virtual machines and increases customer application uptime.

Situation

Hostbasket is Belgium’s largest hosting and domain name specialist, with more than 15,000 sites, 500 dedicated servers, 30,000 domain names, and a network of more than 600 partners. Hostbasket offers traditional hosting services, such as domain names, shared hosting, online backup, and dedicated servers, but it also hosts applications such as Microsoft® Exchange Server 2007, Microsoft Office SharePoint® Server 2007, and Microsoft Dynamics® CRM for customers using a software-plus-services model. The Lochristi, Belgium–based company employs 32 people and has years of experience in server management, backup services, security, and scalability. Hostbasket is part of the Telenet Group.

Hostbasket operates two data centers of its own, in Lochristi and Mechelen, Belgium, and it also uses a third-party data center in Brussels as a backup location. Across these three locations, Hostbasket manages more than 1,200 servers, two-thirds of which are Windows®-based and one-third of which run the Linux operating system. Hostbasket must use its server investment to maximum effect to support customers, produce more revenue, and deliver innovative services.

“Most customers select a hosting company based on four criteria: innovation, quality, price, and trustworthiness,” says Bert Van Pottelberghe, Sales Director for Hostbasket. “We’re constantly looking for new technologies that we can use to create new services, utilize our servers more fully, improve reliability, and reduce data center costs so that we can be more price-competitive.”

For example, Hostbasket provides shared hosting and dedicated servers but wanted to create a solution that combines the benefits of both solutions—a hosting service that provides more functionality and flexibility than shared hosting but does not require a dedicated server. In addition, the company wanted to create a new development-and-test offering that would enable customers to quickly provision servers for application testing, without the delays involved in ordering and provisioning physical servers. “Most of our customers expend a significant percentage of their server resources on development and test functions,” says Bart Roels, Operations Manager for Hostbasket. “Since development-and-test servers have such a short lifespan, we wanted to come up with a way to reduce the time spent provisioning and deprovisioning them. This would reduce customer expense and also help them test new applications faster.”

Using Hyper-V, we can respond more quickly and flexibly to our customers’ changing needs. Bert Van Pottelberghe, Sales Director, Hostbasket

Because of the intense competition in the hosting space, Hostbasket has to constantly innovate, while producing higher margins by reducing operational costs. “We are in the business of offering services to customers; we are not in the business of managing servers,” Van Pottelberghe says. “As our server holdings have grown, our staff has become more consumed with deploying and managing hardware, which leaves us less time to meet customer needs and research new offerings.”

Deploying one dedicated server took Hostbasket one to two business days, including unpacking, racking, installation, network configuration, and setting up backup services. Because Hostbasket deploys hundreds of servers each year, the staff spent considerable time moving and managing hardware. Also, many of the company’s servers ran well under capacity because of application licensing requirements or a customer’s desire to run their applications on dedicated servers. “We wanted to minimize server proliferation, maximize server utilization, and reduce the time our staff spent deploying and managing servers,” Roels says.

Solution

Hostbasket knew that it could use server virtualization to meet all these needs. “We knew that we needed to use virtualization to reduce our hardware costs; lower operating expenses, such as heating and cooling; and cost-effectively offer new services, such as high availability and rapid server deployment,” Van Pottelberghe says.

Built-in Virtualization

In early 2008, Hostbasket evaluated the Windows Server® 2008 operating system with Hyper-V™ virtualization technology, Parallels Virtuozzo, VMware ESX, and QLayer, an open-source virtualization solution. After a careful evaluation, Hostbasket selected Windows Server 2008 with Hyper-V. “We liked the fact that Hyper-V was built into Windows Server 2008, which provides optimal security,” Roels says. “Other solutions are built on top of the operating system, which adds more moving parts, performance overhead, and additional software licensing and maintenance. With Hyper-V, we don’t need separate drivers for the hypervisor, and we don’t pay additional licensing fees.”

In addition, the Hyper-V licensing terms are highly advantageous to Hostbasket, providing several free virtual machine licenses with each Windows Server 2008 license. “Having one vendor for the hypervisor, operating system, and much of our application software was very appealing to us from a support and cost perspective,” adds Van Pottelberghe. “Also, Microsoft is a trusted and well-known brand to our customers, which increases their trust and peace of mind.”

Rapid Uptake on Virtualization

In May 2008, Microsoft invited Hostbasket to join the Microsoft Go-Live program, which helps Microsoft partners gain access to early-release software. As program participants, Hostbasket received help setting up Windows Server 2008 with Hyper-V and training its staff. “Just six weeks after we joined the Go-Live program, we launched our first virtualization offerings,” Roels says.

Hostbasket deployed Windows Server 2008 Enterprise with Hyper-V on six Dell PowerEdge servers in a Server Core configuration. Server Core is a Windows Server 2008 installation option that enables customers to install a pared-down operating system to reduce performance overhead. Hostbasket has created 20 virtual machines on these six physical servers; the virtual machines run the Windows Server 2003 and Windows Server 2008 operating systems. Within 12 months, Hostbasket anticipates having 30 to 40 Hyper-V–based servers running 300 virtual machines.

Hostbasket uses Windows Server 2008 clustering and the Hyper-V virtual machine Snapshot feature to provide high uptime and instant restores. The Snapshot feature quickly captures the state of a running virtual machine, which enables the IT staff to easily restore it to a previous state. It is especially useful for implementing complex or high-risk configuration changes, giving the staff the option to simply roll back the changes if something goes wrong. Hyper-V also uses the Volume Shadow Copy Service for Windows Server 2008 to enable fast and reliable disaster recovery and to minimize interruption, even after natural disasters or hardware failures.

Centralized Virtual Machine Management

Hostbasket also deployed Microsoft System Center Virtual Machine Manager 2008 to manage its virtual landscape. Part of the Microsoft System Center suite of management solutions, System Center Virtual Machine Manager 2008 provides centralized management of virtual machines, accelerated provisioning, and easy virtual machine performance tuning. “Using System Center Virtual Machine Manager 2008, our IT staff can centrally provision and manage virtual machines using the familiar Windows interface,” Roels says. “We mainly use the physical-to-virtual migration tools, which helps us migrate outdated hardware to virtual machines without any hassle and a minimal migration path.”

Even before deploying Hyper-V, Hostbasket used Microsoft Operations Manager 2005 for server health monitoring and Microsoft System Center Data Protection Manager 2007 for continuous data protection. After upgrading Microsoft Operations Manager 2005 to Microsoft System Center Operations Manager 2007, Hostbasket will integrate all of its System Center solutions. With this integration, Hostbasket can centralize the management and backup of both physical servers and virtual machines.

Benefits

Using Hyper-V and System Center Virtual Machine Manager 2008, Hostbasket has rapidly expanded its hosting offerings, improved its margins, and enhanced customer application availability. It has also lowered operational costs by reducing server expenditures and the time spent on server setup, management, and licensing.

Rapid Rollout of New Services

With hardware management chores reduced, Hostbasket spends more time researching new services and rolling them out faster, without the need to order and provision as much hardware. “Using Hyper-V, we can respond more quickly and flexibly to customers’ changing needs.” Van Pottelberghe says. Within six weeks, Hostbasket was able to use Hyper-V to create two new hosting offerings:

• Hostbasket Flex Server. Hostbasket Flex Servers are virtual machines on shared hardware. They offer the advantages of a dedicated server while giving customers more flexibility and services at an attractive price. Hostbasket recommends Flex Servers to customers who have outgrown shared hosting or desire capabilities such as utility computing—the ability to dynamically upgrade and downgrade virtual-machine resources on the fly, according to business needs. Flex Servers are also ideal for development and test scenarios. On each shared Flex Server platform, Hostbasket runs 8 to 16 virtual machines.
  
  
• Hostbasket Hyper-V Server. Hostbasket Hyper-V Servers are dedicated physical servers containing two virtual machines, one of which is an application server and the other a database server (running Microsoft SQL Server® 2008 data management software). Hostbasket aims its Hyper-V Servers at customers who want to consolidate servers and host application and database servers on one server instead of two.

“On top of offering entirely new services, Hyper-V provides a way to automate server setup functions, which allows us to build control panels and self-care portals where customers can easily take care of their hosting solutions themselves,” adds Roels. “This gives customers more autonomy and speed in rolling out servers and services to support their business.” Hostbasket can offer customers utility computing, whereby they can upgrade or downgrade the resources of their virtual machines on-demand, and be automatically billed at the end of the month.

We’re constantly looking for new technologies that we can use to create new services, utilize our servers more fully, improve reliability, and reduce data center costs so that we can be more price-competitive. Bert Van Pottelberghe, Sales Director, Hostbasket

Hostbasket also uses server virtualization to speed the test and development of in-house and third-party applications for customers. Instead of spending days or weeks deploying and decommissioning test servers, Hostbasket developers can provision virtual machines in minutes on an as-needed basis.

Improved Margins

Hostbasket dramatically improved the utilization of its physical servers using virtualization. The average CPU workload of the company’s dedicated servers averaged 12 percent, but servers running Hyper-V average a CPU workload of 65 percent. “Higher server utilization helps us wring more profit from every server, while offering customers lower prices,” Van Pottelberghe says. “The margins for virtual machines are much higher than those for dedicated servers.”

Higher Application Availability

Using the clustering capabilities of Hyper-V in Windows Server 2008 Enterprise, Hostbasket improved server uptime. Using an active/passive cluster, Hostbasket has ensured that if one Hyper-V server fails, the other will take over automatically. “Clustering provides high availability for all our Flex Server customers,” Van Pottelberghe says. “We also use the Hyper-V Snapshot feature to provide fast backup for individual customers. We provide one daily snapshot plus a snapshot on demand, which enables customers to restore their machines back to the previous snapshot. With these features, we can minimize downtime for our customers.”

Lower Operational Costs

Within 12 months, Hostbasket anticipates having 30 to 40 Hyper-V–based servers running 300 virtual machines—240 new virtual machines and 60 dedicated servers that will be migrated to virtual machines. “In data center costs alone, which includes electricity, cooling, and infrastructure elements, we estimate that we will save about €40 [U.S.$60] per machine per month that is virtualized,” Van Pottelberghe says. “Management and repair costs will go down by about €15 [$23] per month per server. In total, for the 60 replaced servers, this will save about €40,000 [$61,000] in the next 12 months.”

Hostbasket has also lowered server setup, hardware, data center infrastructure, and software licensing costs by using Hyper-V virtualization. Server deployment time is dramatically reduced. “It takes less than four hours to deploy a virtual machine, six hours less than the time required to deploy a physical server,” Roels says. “We no longer need to unpack and rack servers, and installation is a one-click action using pre-built images. We’ve simplified network configuration, and services such as backup are no longer necessary, because this functionality is included in Hyper-V and System Center Virtual Machine Manager 2008.”

Adding new physical servers entails not only the expensive addition of new server hardware but the addition of data center infrastructure elements, such as switches, power switches, firewalls, and racks. “All of these elements required a large investment and were labor intensive to set up and maintain,” Roels says. “None of these infrastructure elements are required in a virtual environment.”

Despite its best efforts to standardize hardware in its datacenter, Hostbasket has deployed more than 15 server models in its data centers over the past eight years. “We can now virtualize older servers, which eliminates the old hardware, minimizes hardware failure and customer downtime, and minimizes expensive support interventions,” Van Pottelberghe says. “It also eliminates the need to keep spare parts and spare servers for older hardware.”

Hostbasket can also easily and dynamically scale its infrastructure using Microsoft virtualization solutions. “We can upgrade CPU, disk capacity, and RAM from the central System Center Virtual Machine Manager 2008 control panel,” Roels says. “In the near future, we’ll automate functions such as image deployment and snapshot creation and restoration. This should drastically lower the number of support interventions needed and give customers more flexibility and autonomy. The integration of Microsoft virtualization solutions with other Microsoft System Center solutions has improved our efficiency in managing the large quantities of servers that we deal with every day.”

With the efficiencies it has realized with server virtualization, Hostbasket is evaluating other Microsoft virtualization solutions. It hopes to use Microsoft Application Virtualization to deploy applications faster and improve application performance. The company is also investigating the use of Terminal Services in Windows Server 2008 to publish applications online more easily and simplify remote printing.

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:
www.microsoft.com/virtualization   

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:
www.microsoft.com

For more information about Hostbasket products and services, call 32 9 326 90 95 or visit the Web site at:
www.hostbasket.com