Cloud Hosting Provider Expands Services, Boosts Revenue Using Network Virtualization

OverviewCountry or Region: CanadaIndustry: Hosting

Customer ProfileBased in Toronto, Canada, SoftCom Inc. provides web hosting, email, and business communications services worldwide through its family of Internet brands. It employs more than 130 people around the globe.

Business SituationSoftCom wanted to expand its hosting services to include hybrid cloud offerings, but it did not have the required virtual private networking solution to make this feasible.

SolutionThe company is using the Windows Server 2012 R2 operating system with Hyper-V Network Virtualization technology and a built-in multitenant gateway to provide hybrid cloud services.

Benefits Enables additional revenue-generating

services Increases resource utilization Simplifies network administration Improves service and business

resiliency

“Using Hyper-V Network Virtualization and the built-in network gateway to support our hybrid cloud offerings will drive revenue and reduce costs—an unbeatable combination as we branch out into new markets.”

Dmitri Gaikovoi, Senior Architect, SoftCom Inc.

SoftCom Inc. wanted to expand its virtual private server business by offering customers on-demand hybrid and private clouds—at the same time minimizing the cost of virtual network administration that these scenarios require. SoftCom turned to the Windows Server 2012 R2 operating system and Hyper-V Network Virtualization, which comes with a built-in network gateway, and gained a scalable, flexible solution to administer the isolated virtual networks required for providing elastic, flexible hybrid cloud services for customers. As a result, SoftCom can generate additional revenue through a new offering that differentiates the company from its competitors. With the network virtualization solution built into Windows Server 2012 R2, SoftCom also simplifies network administration and increases resource utilization at its data centers.

SituationEstablished in 1997, SoftCom Inc. provides domain registration, web hosting, application hosting, website development, business email and collaboration, and managed hosting solutions under its flagship brand, myhosting.com. The company’s other major brand, mail2web.com, is a web-based email service offering both advertising-supported and subscription-based email services to more than 2.5 million monthly users worldwide. SoftCom has three state-of-the-art Internet data centers in Canada, Turkey, and the United States.

SoftCom customers are asking for more sophisticated, flexible cloud services and more control over their own virtual environments. This includes the ability to migrate any or all of their application tiers to the cloud—for example, retaining a database on-premises while migrating web servers to a private cloud environment in an isolated virtual network that’s hosted on shared physical infrastructure at SoftCom. “Today, customers expect hybrid cloud solutions for their multitier applications to run in isolated virtual networks on our infrastructure,” says Dmitri Gaikovoi, Senior Architect, SoftCom Inc. “Customers want to choose what tiers to run on-premises and what tiers to migrate to our data centers, and they want 100 percent reliability.”

Hybrid Cloud ChallengesCustomers want a hybrid solution where they can build and consume services on-premises and also consume services from SoftCom in a seamless way. To support this scenario, they need a virtualization infrastructure that’s both manageable and scalable. SoftCom faced significant challenges in creating isolated virtual private networks to support these kind of hybrid cloud services for its customers. First, the migration of a customer’s application to a SoftCom data center requires alterations to the customer’s existing network routing topology and virtual machines’ IP addresses. This task

would have to be done manually by SoftCom network engineers. And changing IP addresses forces customers to adjust policies that were based on the original IP addresses.

Second, as a multitenant service provider, SoftCom has to ensure reliable, isolated hosted hybrid cloud environments for its customers, supported by always-available, segregated virtual networks. To build and host private and hybrid clouds in a way that would meet customers’ business requirements, SoftCom required a greater degree of flexibility and scalability in how it provisioned, placed, and managed virtual machines.

And third, SoftCom has to accommodate seasonal changes in demand for compute capacity for its retail customers that host e-commerce websites at the company’s data centers. “Today, we offer virtual machines to customers on stand-alone servers and, if they want to add capacity, they buy another server in our data center and configure a cluster through a control panel that we provide,” says Gaikovoi. “This isn’t a particularly scalable or efficient scenario.”

There was another problem with providing hybrid cloud solutions for retail customers: enabling a secure network gateway from the customers’ private clouds to the Internet. This would be an essential part of the service for those customers using web servers at SoftCom that require public access, such as online banking and e-commerce providers. While there are third-party network gateway solutions available, SoftCom needed to minimize costs in order to spend its resources on improving its offerings.

The Problem with VLANsFor hybrid cloud services to be economically feasible for thousands of customers, SoftCom needed to minimize the IT infrastructure and labor required to offer the new service. The company needed a solution that would scale with its hosting

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“Customers want to choose what tiers to run on-premises and what tiers to migrate to our data centers, and they want 100 percent reliability.”

Dmitri Gaikovoi, Senior Architect, SoftCom Inc.

business needs. Virtual local area networks (VLANs) are commonly used to enable isolated private cloud environments and enforce hierarchical IP address assignment for customers, but they require a lot of work to deploy new customer environments and add, remove, and migrate live virtual machines. For these reasons, SoftCom decided against embracing VLANs to support its customers’ private clouds. However, the company did use them for their internal data center requirements.

“Even though VLANs are pretty much the only way to segregate virtual machines at the network level, the complexity of managing them meant we never even tried to go in that direction,” says Gaikovoi. “We wanted the freedom to provision and migrate virtual machines to any server so we could build private virtual networks for customers and maximize resource utilization at our data centers—without worrying about reconfiguring IP addresses, VLAN IDs, and production switches.”

SoftCom did use VLANs for adding new IP addresses to the network—but not without spending a lot of time and effort. “About once a month we ran out of IP addresses and had to bring a new IP network into production to serve clients,” says Gaikovoi. “We had to correctly configure all the network equipment that’s involved in the communication for each new VLAN. In our primary data center, it took a day to do this. In our secondary data center, it could take up to a week.”

These technical challenges had to be overcome before SoftCom could increase its business through offering customers new hybrid cloud services.

SolutionSoftCom is taking advantage of enhancements in virtual networking now available in the Windows Server 2012 R2 operating system to move ahead with its plans for hybrid cloud services. Windows

Server 2012 R2 offers Hyper-V Network Virtualization, a policy-based, software-controlled network virtualization solution that’s easily managed using the Virtual Machine Manager component of the Microsoft System Center 2012 R2 data center solution. SoftCom can use this feature to deploy isolated virtual networks to virtual machines, with no relationship at all to the physical network. This means that SoftCom network engineers can build multiple, isolated virtual private networks for customers on the same physical network. SoftCom can also provision and move virtual machines anywhere, without changing the virtual machines’ IP addresses or reconfiguring the physical network.

SoftCom is also using a new capability within Hyper-V Network Virtualization: performing cross-subnet live migration of virtual machines. With this ability, SoftCom can consolidate virtual machines on any cluster node to accommodate demand for extra capacity and to perform infrastructure maintenance—all without affecting customers’ uptime.

Thanks to Hyper-V Network Virtualization, SoftCom customers can easily migrate any or all tiers within a multitier application to the cloud while preserving their existing IP addresses and topologies—with no disruption in service. “Hyper-V Network Virtualization unlocks the door to seamlessly setting up customers for hybrid cloud services,” says Gaikovoi. “Our network engineers can place any virtual machine on any server, regardless of IP address. This is a much better alternative to configuring and maintaining VLANs for each customer.”

Windows Server 2012 R2 added a new feature, a built-in network gateway that uses the Network Virtualization using Generic Routing Encapsulation (NVGRE) technology. The new Hyper-V Network Virtualization gateway is a multitenant gateway that performs the site-to-site virtual private network communications

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“Even though VLANs are pretty much the only way to segregate virtual machines at the network level, the complexity of managing them meant we never even tried to go in that direction.”

Dmitri Gaikovoi, Senior Architect, SoftCom Inc.

required for hybrid cloud scenarios. The gateway also offers Network Address Translation (NAT) and forwarding functions. (NAT is the process in which a network device, usually a firewall, assigns a public address to a computer or virtual machine inside a private network, enabling communications with the Internet.)

By using the Hyper-V Network Virtualization gateway, SoftCom gained two critical capabilities that enable it to offer hybrid cloud services to its clients running e-commerce or public service websites: first, support for multiple tenant connections to the Internet, and second, forwarding of network traffic from a customer’s data center to its virtual network in a private cloud. And because the Hyper-V Network Virtualization gateway supports Border Gateway Protocol (BGP), it provides additional resiliency for site-to-site VPN connections between SoftCom and its customers’ on-premises data centers.

The new Hyper-V Network Virtualization gateway is also highly available. “The bottom line for a hosting business is you have to provide redundancy and avoid

single points of failure in case of any disasters,” says Gaikovoi. “Microsoft did not disappoint our requirements for a highly available network gateway. That’s because the gateway is installed on a virtual machine in a cluster running Windows Server 2012 R2. And even better, each gateway virtual machine offers multiple routing domains, which help to keep customers’ networks isolated and their IP addresses intact.”

SoftCom was also impressed with the additional capabilities built into the Microsoft System Center 2012 R2 Virtual Machine Manager component that can help automate the management of virtual networks and makes network virtualization a practical solution. In addition to using Virtual Machine Manager to create, modify, and remove virtual machines and their networks, SoftCom network engineers can use it to deploy and automatically configure the Hyper-V Network Virtualization gateway with a built-in service template. Use of Virtual Machine Manager also ensures that, even as virtual machines are moved around the data center, the virtual network remains intact. SoftCom also can use Virtual Machine Manager to manage both physical and virtual network switches.

SoftCom set up a proof-of-concept scenario in its lab to test Hyper-V Network Virtualization and the built-in network gateway. “We deployed two Hyper-V hosts running Windows Server 2012 R2 Preview and System Center 2012 R2 Preview Virtual Machine Manager,” says Gaikovoi. “We created multiple virtual networks and used Hyper-V Network Virtualization to segregate virtual machines and their networks. We were able to maintain the same IP address for two virtual machines in two different networks. Then we built the Hyper-V Network Virtualization gateway and tested inbound and outbound connectivity with the Internet using NAT.” (See Figure 1).

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Figure 1 - SoftCom is using the Windows Server 2012 R2 operating system and Hyper-V Network Virtualization, which comes with a built-in network gateway to administer the isolated virtual networks required for providing elastic, flexible hybrid cloud services for customers.

SoftCom plans to use Hyper-V Network Virtualization, the built-in network gateway, and System Center 2012 R2 to offer hybrid cloud services to customers. SoftCom has already created a template within Virtual Machine Manager to link a customer’s services to the SoftCom billing system. Now SoftCom is adding functionality within the self-service control panel so that customers can manage aspects of the hybrid cloud scenario themselves.

BenefitsBy deploying Windows Server 2012 R2 and System Center 2012 R2, SoftCom can remove the barriers that it faces for providing hybrid cloud services to its customers. As a result, SoftCom can generate additional revenue through a new offering that differentiates the company from its competitors. At the same time, SoftCom will simplify network administration and increase resource utilization.

“Using Hyper-V Network Virtualization and the built-in network gateway to support our hybrid cloud offerings will drive revenue and reduce costs—an unbeatable combination as we branch out into new markets,” says Gaikovoi.

Enables Additional Revenue-Generating ServicesSoftCom is excited about the prospect of answering customers’ demands for more flexible hosted private cloud solutions that are also highly available. By using Hyper-V Network Virtualization and the built-in network gateway managed by System Center 2012 R2, SoftCom has an end-to-end network virtualization solution to help expand its business. Making it easy for customers to set up the new offering also renders the service more appealing, driving marketability. Because Hyper-V Network Virtualization takes care of IP address management and network routing, customers can migrate their workloads to the cloud with minimal configuration required.

“We expect that the first customers to adopt hybrid cloud services will want separate virtual machine clusters for their Microsoft SQL Server databases on-premises, while they turn to us to host their web servers,” says Gaikovoi. “These customers could be web development shops or online retail companies. With the network gateway, we can create the connection between a customer’s on-premises data center and a web tier hosted at SoftCom. Then we can connect their web services to the Internet for public access—a true hybrid cloud and networking scenario.”

Increases Resource UtilizationThe rigidity of virtual local area networks can cause overprovisioning and underutilization, but that’s not an issue with Hyper-V Network Virtualization. Hyper-V Network Virtualization decouples customers’ virtual networks from the data center’s infrastructure so SoftCom can provision multiple, isolated virtual private networks for customers on the same physical network. SoftCom network engineers gain the freedom to move, add, or delete virtual machines in the data center, without worrying about IP address assignment or configuring VLANs. This means they can quickly migrate live machines, even across subnets, to any server in the data center that has extra capacity for additional workloads.

The built-in Hyper-V Network Virtualization gateway improves resource utilization because it enables multiple routing domains within a single virtual machine. To boost reliability, the gateway is hosted on virtual machines within a high-availability cluster running Windows Server 2012 R2. Because the Hyper-V Network Virtualization gateway supports 200 multiple routing domains with a single gateway virtual machine, SoftCom can increase the density of its gateway solution.

“If we didn’t have multidomain routing on the gateway, one gateway virtual machine would be able to support one routing

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“Because we can use Hyper-V Network Virtualization to automate the onerous manual tasks that our networking engineers used to do, offering thousands of customer hybrid cloud solutions is now a viable option.”

Dmitri Gaikovoi, Senior Architect, SoftCom Inc.

domain,” says Gaikovoi. “My Dell servers can host 100 virtual machines, so in this scenario that means 100 routing domains. But with the Hyper-V Network Virtualization gateway and multidomain routing, that same server hosting 100 gateway virtual machines would support 20,000 routing domains. This is a hugely scalable, cost-effective, and highly available NVGRE gateway solution.”

Simplifies Network AdministrationSoftCom can reduce IT labor in the data center through the network automation that’s provided by Hyper-V Network Virtualization. “Now when we bring new virtual networks into the data center, we’ll be saving between a day and a week of IT labor,” says Gaikovoi. “Because we can use Hyper-V Network Virtualization to automate the onerous manual tasks that our networking engineers used to do, offering thousands of customer hybrid cloud solutions is now a viable option.”

And when SoftCom deploys System Center 2012 R2, the company can use Virtual Machine Manager to automate the deployment and configuration of the Hyper-V Network Virtualization gateway. “I’m looking forward to using Virtual Machine Manager to automate the management of our physical network equipment using standards-based switch management,” says Gaikovoi. “Then we’ll be able to manage network equipment directly from Virtual Machine Manager. This will reduce the time that it takes to bring new Hyper-V nodes to production by up to two days.”

Improves Service and Business ResiliencyImproved data center administration translates into better service for SoftCom customers. Also, SoftCom can pass along these efficiencies to customers through its control panel. “Customers want to be able to control their own virtual environments, and with Hyper-V Network Virtualization, we can provide better self-service,” says Gaikovoi. “We can deliver self-service

network provisioning of their virtual networks from the control panel, so our staff can focus on optimizing our core infrastructure and developing new services at the data center. And if a customer is experiencing a surge in website traffic, they can use our control panel to easily scale out compute capacity for their front-end tier within their segregated virtual network—without worrying about renumbering IP addresses.”

SoftCom also plans to use its virtual networking solution to boost customer service through enhanced business continuity. “We have a plan to upgrade our disaster recovery solutions, and we’ll be including cross-subnet migration in our plans because we can use it to move customers’ virtual machines to another data center without downtime,” says Gaikovoi. “And the fact that the Hyper-V Network Virtualization gateway supports Border Gateway Protocol is really beneficial for reducing downtime because it provides automated failover of connections between SoftCom data centers and our clients’ on-premises environments. There are so many reasons why Hyper-V Network Virtualization is going to help us differentiate our service and expand our business.”

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Transform the data centerThe hybrid cloud from Microsoft transforms the data center by extending existing investments in skills and technology with public cloud services and a common set of management tools. With an on-premises infrastructure connected to the Windows Azure platform, you can deliver services faster and scale up or down quickly to meet changing needs.

For more information about transforming the data center, go to:www.microsoft.com/en-us/server-cloud/cloud-os/modern-data-center.aspx

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This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published November 2013

Software and Services Windows Server Product Portfolio− Windows Server 2012 R2− Microsoft System Center 2012 R2

Technologies− Hyper-V

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For more information about SoftCom Inc. products and services, call (416) 957-7400 or visit the website at: www.softcom.com