4-page Case Study
Posted: 6/14/2010
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Fasthosts Hoster Expands Business, Cuts Costs, by Using Hyper-V to Offer Virtual Servers

Fasthosts provides hosting services to individuals and businesses in the U.K. and United States. Eager to better meet customer needs and expand its business, Fasthosts deployed Windows Server 2008 R2 Datacenter with Hyper-V technology and created a virtual private server (VPS) offering. It used the Microsoft Dynamic Data Center Toolkit for Hosters to get its VPS offering to market in just 16 weeks, and is relying on Microsoft System Center data center solutions to provide VPS backup, remote server monitoring, and dynamic performance scaling. Fasthosts expects its new solution to become the largest part of its business, and is also excited to provide a growth opportunity for channel partners and more flexibility and higher availability to end customers. The company also expects to greatly reduce its physical server and customer support costs through more resilient and intuitive solutions.

Established in 1999 (and acquired by Germany-based United Internet in 2006), Fasthosts has grown to be a leading hosting provider in the United Kingdom, with recent expansion into the United States. Fasthosts focuses on the mainstream hosting market, selling website hosting, domain names, hosted email services, and dedicated servers direct to end customers and also through an extensive partner channel. Based in Gloucester, England, Fasthosts has more than 160 employees and serves more than 400,000 direct customers and many more through its network of 5,500 reseller partners.

In mid-2009, Fasthosts observed that the U.K. hosting market had matured and become ultracompetitive. The company needed to branch out into new, innovative areas to grow further. This realization coincided with the growth of “cloud” computing—running business applications in off-premises, third-party data centers. Fasthosts saw that both small businesses and their local IT solution-provider partners needed help figuring out how to take advantage of this new deployment model.

“Most small businesses have relationships with local solution providers who are their trusted technology advisors,” says Steve Holford, Marketing Director for Fasthosts. “These local partners traditionally help small businesses create websites, set up on-premises servers, or establish and manage dedicated hosted servers. We wanted to create a virtual private server offering [dedicated servers running as virtual machines inside physical host servers] that would meet the needs of small businesses and also give these channel partners a new way to make money.”

Fasthosts had used VMware virtualization software to achieve server consolidation efficiencies with internal systems, but had not used it to create virtual servers for customers. “We looked at how we wanted to implement a virtual-server product offering and spent a good deal of time understanding which virtualization platform presented the best opportunity now and going forward,” Holford says. “We were very familiar with Microsoft operating systems and with VMware, but we wanted to understand all the
* With Hyper-V, we were able to plug a gap in the marketplace and quickly create a flexible cloud offering. We’re able to give customers a scalable … hosting option with pay-as-you-grow pricing. *

Steve Holford
Marketing Director, Fasthosts

product roadmaps.”

In mid-2009, Fasthosts evaluated VMware, the Windows Server 2008 R2 operating system with Hyper-V virtualization technology, and Citrix Xen, which was used by a sister company. It also briefly looked at Parallels Virtuozzo.

Fasthosts felt that Hyper-V had everything it needed and that the coupling of Hyper-V with Microsoft System Center data center solutions provided capabilities no other vendor offered. Specifically, the Microsoft virtualization and data-center management solutions would give channel partners and end customers the ability to customize their virtual servers and gain dynamic feedback and alerts on server performance. By using System Center products to fashion the online server configuration process, Fasthosts could offer pay-as-you-go pricing and also ensure full resilience so that if any hardware component failed, the virtual server(s) would continue to run.

“These were all services that would be very beneficial to customers and provide additional revenue opportunity for partners,” Holford says. “The ability to offer rich add-on services, scalability, and resilience was just not possible with the other virtualization platforms we evaluated. Microsoft gave us a much richer proposition.”

Creating a Virtual Private Server Offering
In late 2009, Fasthosts deployed Windows Server 2008 R2 Datacenter, an edition that provides unlimited licensing for all guest operating systems as part of the host-server license. Fasthosts worked with the Microsoft Partner team in using the Microsoft Dynamic Data Center Toolkit for Hosters to guide the rollout of its virtual private server offering—which it calls Data Center on Demand (DCoD). The Microsoft Dynamic Data Center Toolkit for Hosters contains guidance, sample code, best practices, and collateral to help hosting providers rapidly build and launch managed services powered by Windows Server 2008 Hyper-V and Microsoft System Center products. It also contains marketing advice to help hosters advertise and sell managed services and solutions.

“The Dynamic Data Center Toolkit was very powerful in helping us deliver our VPS service,” Holford says. “For example, understanding how to use Microsoft System Center Virtual Machine Manager 2008 R2 to give customers full control over their servers, and Microsoft Operations Manager 2007 R2 to capture machine monitoring statistics was a real competitive differentiator and it dramatically cut our time-to-market. VMware solutions were not as well-rounded.”

In March 2010, Fasthosts launched DCoD targeted directly at end customers. A few weeks later the company rolled out a similar offering purely for indirect sales through channel partners under the new brand name Rise.

Fasthosts uses Dell PowerEdge M610 blade servers and Dell EqualLogic PS6500 storage area networks (SANs) to host its DCoD infrastructure. Fasthosts created 455 virtual machines on 26 servers within the first three months of launch but plans to create up to 10,000 virtual machines on as many as 160 host servers. Its highest virtual-to-physical server density is 30 virtual machines per host.

Provisioning and Monitoring Online Servers
End customers and channel partners place VPS orders by using their personal Rise Control Panel on the Fasthosts website or over the phone. Customers and partners choose the number of virtual CPUs, amount of memory and storage, and operating system desired; the number of Internet Protocol (IP) addresses needed; and the reliability level required. A running price total appears as
* The ability to offer rich add-on services, scalability, and resilience was just not possible with the other virtualization platforms we evaluated. Microsoft gave us a much richer proposition. *

Steve Holford
Marketing Director, Fasthosts

selections are made and modified.

The Fasthosts staff uses the Windows PowerShell command-line interface and scripting language to create scripts that automate the construction of the virtual server to the customer’s exact specifications. Microsoft System Center Virtual Machine Manager 2008 creates the virtual machine on the host server by using templates already containing the desired operating system. When the server is ready—in just a few minutes—System Center Configuration Manager 2007 notifies the Fasthosts billing system, which sends the customer an email message announcing that the server is ready.

Fasthosts use Microsoft System Center Operations Manager 2007 to monitor VPS performance and dynamically move virtual machines around the host servers as resource consumption moves up and down. If a customer needs to bump up its VPS resources, System Center Operations Manager traps the monitoring data and forwards it to the Fasthosts customer relationship management system, which generates an email or SMS alert to the customer, informing it that resource utilization is high and enabling it to scale up processor and memory resources by using the online control panel.

The company is working to automate physical server deployment by using System Center Configuration Manager. As soon as Fasthosts technicians rack a new server, System Center Configuration Manager will take over the installation of the base Hyper-V server build, customize the deployment, configure the network, and add the host to the cluster managed by System Center Virtual Machine Manager. Configuration Manager will then begin adding virtual private servers to the newly available node.

Fasthosts is also deploying System Center Data Protection Manager 2007 to provide backup services to customer virtual private servers. Data Protection Manager works in conjunction with the Dell EqualLogic SAN to provide multiple time-delayed backups of customer workloads.

The company is also working with Microsoft on hosting the Red Hat and CentOS Linux operating systems and Linux-based workloads on its Hyper-V-based VPS offerings. “We are working closely with Microsoft product teams to ensure glitch-free Linux hosting on Hyper-V, which will give us another competitive advantage and the ability to meet more customer needs,” Holford says.

By using Windows Server 2008 R2 Datacenter with Hyper-V, System Center products, and the Microsoft Dynamic Data Center Toolkit for Hosters, Fasthosts was able to get a VPS offering to market in just 16 weeks and create a competitive differentiator for itself and its channel partners. The company expects the DCoD channel market to become the largest part of its business, thanks to all the value-added services that partners can provide and the flexibility and cost-effectiveness that end customers will realize. Best of all, with virtualization, Fasthosts can dramatically expand its server offerings without dramatically expanding its physical hardware investment. It also can offer customers 99.99 percent availability due to virtualization clustering.

Dramatic Expansion of Channel Business
Currently, about 80 percent of the company’s business comes from sales to direct customers. However, now that it has a richer suite of solutions for the channel, Fasthosts expects that the Rise channel, or indirect market, will grow to become the largest share of its business. “We see the direct business continuing to grow healthily, but we will get significantly more growth through our channel business as it matures, because 5,500 channel partners dramatically extends our own sales efforts,” Holford says. “With Hyper-V, we were able to plug a gap in the marketplace and quickly create a flexible cloud offering. We’re able to give customers a scalable, hardware-independent hosting option with pay-as-you-grow pricing.”

New Revenue Streams for Partners
In fact, Fasthosts believes that Hyper-V paired with System Center solutions enables it to offer channel partners a richer menu of value-added services.

Jeff Lenton, Chief Executive Officer of In2itive, a hoster in the U.K., says, “We’ve been party to the Rise channel proposition for a

* The Dynamic Data Center Toolkit was very powerful in helping us deliver our VPS service. *

Steve Holford
Marketing Director, Fasthosts

time now and believe this is a service that IT consultancies, value-added resellers, and system integrators will benefit from. The support to build cloud services into our go-to-market proposition is clear, and the solution is very impressive.”

“Channel partners can serve a lot more customers by using a virtual server model than they ever could using an on-premises model,” Holford adds. “Traditionally, most of their business comes from selling on-premises services and support. But with our VPS offering, partners can expand their market to customers that cannot afford on-premises equipment, don’t have space for physical servers, and don’t want to worry about ensuring connectivity. By using System Center, we can offer add-on services that provide differentiation.”

In fact, Fasthosts is busy developing solutions-based services for partners—out-of-the-box “themed” solutions such as virtual servers for e-commerce, disaster recovery, storage, backup, collaboration, email, and so forth—all instantly deployable over the web. Channel partners can also offer load balancing, firewall services, and other services that give them more competitive differentiation. “We are also moving to connect our VPS offering to on-premises solutions so that customers can link the two environments,” Holford says. “For example, a customer might want to constantly update its on-premises applications with those running online.”

More Flexibility for End Customers
The ability to cost-effectively host critical IT services off-premises and dynamically scale computing resources up or down as needed offers small businesses the kind of flexibility and scalability that heretofore only enterprise companies have enjoyed. “If a small retail business knows that it is going to have a busy weekend, it can upgrade its VPS resources just for that weekend, and then downgrade resources when the peak period is over,” Holford says. “With our VPS offering, we’re able to give customers the flexibility that they need.”

Lower Operational and Support Costs
Today, Fasthosts has about 10,000 servers in its data centers, most of which are dedicated physical servers. However, operating a data center with physical servers alone presents scalability and CPU utilization problems. “It’s not unusual for a data center to run at 30 percent of CPU capacity,” Holford says. “It’s a big expense for us to operate a lot of servers running far below their potential. By using virtualization, we can securely run multiple customer workloads on a single physical server, and customers pay only for the CPU resources that they need. With virtualization, we can vastly reduce our data-center space and rate of physical server growth. We can also pass those savings on to customers.”

By selling through channel partners, Fasthosts also reduces end-customer support costs. Even for its direct-to-customer business, DCoD enables a reduction in support costs, because customers self-service and self-manage their server needs. “With dedicated servers, increasing CPUs or memory places a heavy burden on our engineering staff, because they have to open up physical servers,” Holford says. “With virtual servers, customers have direct access to their online control panel, can slide performance up or 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.”

Microsoft Virtualization
Microsoft virtualization is an end-to-end strategy that can profoundly affect nearly every aspect of the IT infrastructure management life cycle. 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:

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 in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. 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 Fasthosts products and services, call (44) 0844 583 0777 or visit the website at:

For more information about Rise products and services, call (1) 877 910 RISE or (44) 8445 832 500 or visit the website at:

Solution Overview

Organization Size: 200 employees

Organization Profile

Fasthosts is a U.K.-based hosting provider that serves the home and business markets through direct and partner sales. The firm has 160 employees.

Business Situation

Fasthosts wanted to help its small and midsize business customers take advantage of “cloud” computing—hosting applications offsite in a data center accessible via the Internet—and also wanted to expand its offerings without major hardware investments.


Fasthosts used Windows Server 2008 R2 Datacenter with Hyper-V along with Microsoft System Center solutions to create a virtual private server offering that its direct customers and channel partners provision online.


  • Expansion of addressable market
  • New revenue streams for partners
  • More flexibility for end customers
  • Lower operating costs

  • 26 Dell PowerEdge M610 blade servers
  • 2 Dell PowerEdge M1000e modular blade enclosures
  • 7 Dell EqualLogic PS6500 storage area networks

Software and Services
  • Windows Server 2008 R2 Datacenter
  • Microsoft Hyper-V
  • Microsoft System Center Configuration Manager 2007
  • Microsoft System Center Operations Manager 2007
  • Microsoft System Center Virtual Machine Manager 2008 R2
  • Microsoft System Center Data Protection Manager 2007

Vertical Industries
Hosters & ISPs

United Kingdom

IT Issue
Cloud Services