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A year of healthy progress along Microsoft strategic ambitions

Microsoft Stock Price for the last 5 years — July 22, 2016:Microsoft Stock Price for the last 5 years -- 22 July, 2016 My earlier posts related specifically to this 3 years overall transition history:
– Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform as of July 10, 2013
– Microsoft reorg for delivering/supporting high-value experiences/activities as of July 11, 2013
– An ARM-focussed Microsoft spin-off could be the only solution to save Microsoft in the crucial next 3-years period as of August 24, 2013
– Opinion Leaders and Lead Opinions: Reflections on Steven Sinofsky’s “Era of Continuous Productivity” vision as of September 1, 2013
– The question mark over Wintel’s future will hang in the air for two more years as of September 15, 2013
– Microsoft could be acquired in years to come by Amazon? The joke of the day, or a certain possibility (among other ones)? as of September 16, 2013
– Sinofsky’s ‘continuous productivity’ idea to be realised first in Box Notes as of September 21, 2013
MS FY15 NEW STRATEGIC SETUPMicrosoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
– Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft as of July 23, 2014
– Steve Ballmer on leaving Microsoft, relationship with Bill Gates: “We’ve dusted-up many times”, on His Biggest Regret: “doing hardware earlier [for being] more effective in phone business” AND on Amazon: “They Make No Money.” as October 25, 2014
– The Empire Reboots — Can C.E.O. Satya Nadella Save Microsoft? | Vanity Fair, Oct 27, 2014

WPC Day 1: The Digital Transformation Opportunity from Microsoft Partner Network UK Blog as of July 11, 2016:

“Empower every person and every
organisation on the planet to achieve more”
The Microsoft Mission

At the core of today’s opening Worldwide Partner Conference keynote was ‘Digital Transformation’ aka the desire of CEO’s to use technology to change business outcomes – whether it be how they:

  • Engage their customers,
  • Empower employees to make better decisions,
  • Optimise their operations,
  • Build up the predictive power within their organisations so that every operation is intelligent,
  • Transform their products and services.

Digital Transformation = An Unprecedented Partner Opportunity

Every customer of every size business (startup to Enterprise) is not only looking to use digital technology, but to build digital technology for their own.

Digital-transformatoin-all-partner-types1-1024x530[1]

Businesses are looking to drive greater efficiency – automating processes and enhancing productivity, particularly in those areas where there are operating expenses. This poses an unprecedented opportunity for you no matter what partner type you are.

Digital Transformation Opportunity by Microsoft and Partners -- July 11, 2016Microsoft Ambitions to Drive Digital Transformation

Microsoft has three core ambitions which play a fundamental part in digitally transforming businesses:

  • Re-inventing Productivity and Business process
  • Building the Intelligent Cloud
  • Create more Personal Computing

These will be covered in more detail over the next two days keynotes, however, Satya provided some great examples of what these 3 ambitions entail.

1) Re-inventing Productivity and Business Process

This is all about removing the barriers between productivity tools and business applications. Satya focused on two key areas:

  • ‘Conversations as a Platform’: Using human language understanding personal assistants and Bots (conversational interfaces) which augment our connection with technologies. (Watch the demo 48 minutes into Day 1 Keynote)

2) Building out the intelligent Cloud

To showcase how intelligent cloud is helping transformation, Satya invited General Electric CEO, Jeff Immelt, on stage to discuss how he has digitally transformed the GE business.

Considering GE is over 140 years old, it’s a company that has embraced transformation and digital transformation. You can read more about their story and find out about Microsoft’s new partnership with GE to bring Predix to Azure, accelerating digital transformation for industrial customers.

Satya then went on to talk about ‘The next phase of building the Intelligent cloud’ with ‘Cognitive services’.  We’re seeing the beginnings of a new platform for cognitive services. Microsoft has taken decades of research from Microsoft Research encapsulating speech, computer vision, natural language text understanding, and made these available as API’s. These API’s are being used to infuse perception into apps – the ability for Apps/Bots to understand speech and see i.e. computer vision. These cognitive capabilities are capable of transforming business by bringing productivity gains. A great example of this is how Macdonalds are creating efficiency in their Drive Thru’s with speech/order recognition (Watch the demo 1 hour 10 minutes into the Day 1 keynote).

3) Create More Personal Computing

Create more personal computing was the third and final ambition covered. Satya discussed Windows 10 – an OS system spanning multiple devices from Raspberry PI to Hololens and bringing centralised infrastructure benefits and cost savings to business.

It was on the topic of Hololens, he discussed how personal computing is shaped by category creation moments. Moments where input and output change. ‘Mixed Reality’ is that moment. With Hololens its created an interface changing moment – Mixing real with virtual, enabling us to be anywhere and everywhere – fully untethered and mobile.

What followed was a great demo showcasing how Japan Airlines are using Microsoft HoloLens to change how they train flight crews and mechanics (Watch the demo 1 hour 17 minutes into the Day 1 keynote)

Mixed reality offers huge opportunities for partners with so many applications across so many sectors.

Expect more details on Digital Transformation and Microsoft’s three ambitions in WPC Day 2 and 3 keynotes.

News From WPC2016 Day 1

The three ambitions announced a year ago and the proof-points of healthy progress along them in FY16:

  1. Office 365, Dynamics 365, AppSource, and LinkedIn as all being part of one overarching strategy in Productivity and Business Process:
    – core part of an overarching strategy
    – digital transformation both for us and our partnerships with customers
  2. Significant differentiation vs. Amazon AWS in Intelligent Cloud:
    – enterprise cloud leadership
    – every customer is also an ISV
    – hyperscale-plus-hybrid approach with annuity focus enabling cloud lead conversation with customers
    – meeting cloud needs of customers where they are
  3. Windows strategy to achieve progress in More Personal Computing:
    – deliver more value and innovation, particularly for enterprise customers
    – grow new monetization through services across our unified Windows platform
    – innovate in new device categories in partnership with our OEMs

The Q1FY16 progress was presented in my Microsoft is ready to become a dominant force in cloud computing with superior cloud offerings, a Windows ecosystem under complete renewal, first signs of Surface-Lumia-Xbox successes on the market, and strong interest in technology partnerships by other industry leaders as of October 24, 2015.

Reinvent Productivity and Business Processes“, “Build the Intelligent Cloud” and “Create More Personal Computing” were the original 3 “interlocking ambitions” the Microsoft CEO talked about at Microsoft Iginite held on May 4-8, 2015 in Chicago. The proof-points of FY16 progress are shown along that list, and explained in detail by remarks from Microsoft (MSFT) Satya Nadella on Q4 2016 Results – Earnings Call Transcript as of July 18, 2016.

For more information see also:  Q4 2015 Earning Call Transcript, the 2015 Annual Report or—even better—my earlier posts indicated here under each ambition. For a deeper strategic intent underlying these ambilitions see my earlier post Julia Liuson: “Microsoft must transform from a company that throws a box with software into the market … into a company that offers pure services” published on These ambitions also became reporting segments in FY16. See Earnings Release FY16 Q1 as of October 22, 2015. The major corporate groups were also organised along these line: ASG = Application & Services Group for “Reinvent productivity and business processes” ambition, C&E = Cloud & Enterprise for “Build the intelligent cloud platform” ambition, and OSG= Operating Systems Group for “Create more personal computing” ambition.

Note that the overall strategic approach was developed 2 years ago and it was described in my post Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft of July 23, 2014:

image.png

Here are the remarks from Microsoft (MSFT) Satya Nadella on Q4 2016 Results – Earnings Call Transcript as of July 18, 2016. for details

1. Office 365, Dynamics 365, AppSource, and LinkedIn as all being part of one overarching strategy in Productivity and Business Process:

For initial and additional details available earlier see my earlier posts:
– The first “post-Ballmer” offering launched: with Power BI for Office 365 everyone can analyze, visualize and share data in the cloud as of February 10, 2014
– OneNote is available now on every platform (+free!!) and supported by cloud services API for application and device builders as of March 18, 2014
– An upcoming new era: personalised, pro-active search and discovery experiences for Office 365 (Oslo) as of April 2, 2014
– Microsoft Azure: Marketable machine learning components capability for “a new data science economy”, and real-time analytics for Azure HDInsight service as of October 22, 2014

In fact, this last quarter, some of the most strategic announcements were all around our application platform. At our partner conference, there was a significant amount of excitement with the tools that we announced like PowerApps and Power BI, Azure functions and Flow. These are tools that our developers and system integrators and solution partners will use in order to be able to customize applications around Azure. And so to me that’s another huge advantage and a competitive differentiation for us.

1.1 Core part of an overarching strategy

The move to the cloud for our customers and for us is not just about a new way of delivering the same value just as a SaaS service. It’s really the transformation from having applications that are silos to becoming more services in the cloud where you can reason about the activity and the data underneath these services to benefit the customers who are using these services. So that’s what this notion of a graph [by Microsoft Graph] represents.

So when somebody moves to Office 365, their graph [by Microsoft Graph], their people, their relationships with other people inside the organization, their work artifacts all move to the cloud. You can connect them with all the business process data that’s in Dynamics 365, but not just in Dynamics 365 but all the applications in AppSource because business process will always be a much more fragmented market as opposed to just one market share leader by industry, by vertical, by country. And so that’s our strategy there.

And now the professional cloud or the professional network helps usage across all of that professional usage. Whether it’s in Office 365 or whether you’re a salesperson using any application related to sales, you want your professional network there. Of course, it’s relevant in recruiting, it’s relevant in training, it’s relevant in marketing. So that’s really our strategy with LinkedIn as the professional network meeting the professional cloud. And these are all part of one overarching strategy, and ultimately it’s about adding value to customers.

1.2 Digital transformation both for us and our partnerships with customers

This past year was a pivotal one in both our transformation and in our partnerships with customers who are also driving their own digital transformation. Our progress is best captured in the results of our three ambitions, starting with Productivity and Business Process. In a world of infinite information but finite attention and time, we aim to change the nature of work with digital technology. In pursuit of this ambition, we continue to add value to our products, grow usage, and increase our addressable market. Along these lines, let me start with Office 365 and then move to Dynamics 365.

In the last quarter, we advanced our collaboration tools. We launched Microsoft Planner, which helps teams manage operations, as well as Skype Meetings, which is aimed at helping small businesses collaborate. In June, we further strengthened our security value proposition with the release of Advanced Security Management.

Lastly, we continue to add intelligence in machine learning to Office to help people automate their tasks and glean insights from data. These advancements helped to drive increased usage across enterprises, small and medium businesses, and consumers. In the enterprise, Office 365 Commercial seats grew 45% year over year, and revenue grew 59% in constant currency. Also 70% of our Office Enterprise agreement renewals are in the cloud. Innovative companies like Facebook, Hershey’s, Discovery Communications, Cushman Wakefield all adopted Office 365 and now see how transformative this service can be for their own business.

We are enthusiastic about the early feedback and growth opportunity from companies using our newly released Office 365 E5, which includes powerful security controls, advanced analytics, and cloud voice. These customers tell us that they love the simplification that comes with standardizing across all of our productivity workloads.

We will continue to grow our install base and drive premium mix through offers like Office 365 E5, but they’re very, very early days of E5. And E5 value proposition across all three of the areas, whether it’s cloud voice or analytics or security are all three massive areas for us. And I would say if anything, the initial data from our customers around security is gaining a lot of traction. But at the same time, one of the things that customers are looking for is making an enterprise-wide architectural decision across all of the workloads.

We see momentum in small and medium businesses, with a growing number of partners selling Office 365, now up to nearly 90,000, a 25% increase year over year. We continue to grab share and adding over 50,000 customers each month for 28 consecutive months.

We also see momentum amongst consumers, with now more than 23 million Office 365 subscribers. Across segments, customers increasingly experience the power of Office on their iOS and Android mobile devices. In fact, we now have more than 50 million iOS and Android monthly active devices, up more than four times over last year.

Now let’s talk about progress with the other pillar of this ambition, Dynamics 365. We are removing any impedance that exists between productivity, collaboration, and business process. This month we took a major step forward with the introduction of Microsoft Dynamics 365 and Microsoft AppSource. Dynamics 365 provides business users with purpose-built SaaS applications. These applications have intelligence built in. They integrate deeply with communications and collaboration capabilities of Office 365.

Dynamics 365 along with AppSource and our rich application platform introduces a disruptive and customer-centric business model so customers can build what they want and use just the capabilities they need. The launch of Dynamics 365 builds on the momentum we’re already seeing in this business. Customers around the globe are harnessing the power of Dynamics in their own transformation, including 24 Hour Fitness and AccuWeather. Overall, Dynamics now has nearly 10 million monthly paid seats, up more than 20% year over year, and Q4 billings grew more than 20% year over year.

Overall, Business Processes represent an enormous addressable market, projected to be more than $100 billion by 2020. It’s a market we are increasingly focused on, and I believe we are poised with both Dynamics 365 and Microsoft AppSource to grow and drive opportunity for our partners.

Across Office 365 and Dynamics 365, developers increasingly see the opportunity to build innovative apps and experiences with the Microsoft Graph, and we now have over 27,000 apps connected to it. Microsoft AppSource will be a new way for developers to offer their services and reach customers worldwide.

Lastly, with Office 365 and Dynamics 365, we have the opportunity to connect the world’s professional cloud and the world’s professional network with our pending LinkedIn deal. Overall, the Microsoft Cloud is winning significant customer support. With more than $12 billion in Commercial Cloud annualized revenue run rate, we are on track to achieve our goal of $20 billion in fiscal year 2018. Also, nearly 60% of the Fortune 500 companies have at least three of our cloud offerings. And we continue to grow our annuity mix of our business. In fact, commercial annuity mix increased year over year to 83%.

2. Significant differentiation vs. Amazon AWS in Intelligent Cloud 

For initial and additional details available earlier see my earlier posts:
– Windows Azure becoming an unbeatable offering on the cloud computing market as of June 28, 2013
Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform as of July 10, 2013

– 4. Microsoft products for the Cloud OS [‘Experiencing the Cloud’, as of Dec 18, 2013, but published only on Feb 14, 2014] (was separated from the next “half bakedness” post because of its length)
– 4.5. Microsoft talking about Cloud OS and private clouds: starting with Ray Ozzie in November, 2009[‘Experiencing the Cloud’, as of Dec 18, 2013, but published only on Feb 14, 2014] (was separated from the next “half bakedness” post because of its length)
Microsoft’s half-baked cloud computing strategy (H1’FY14) as of February 17, 2014 Note that this “half bakedness” ended by the facts published in Microsoft is ready to become a dominant force in cloud computing with superior cloud offerings, a Windows ecosystem under complete renewal, first signs of Surface-Lumia-Xbox successes on the market, and strong interest in technology partnerships by other industry leaders as of October 24, 2014
– Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
– Microsoft BUILD 2014 Day 2: “rebranding” to Microsoft Azure and moving toward a comprehensive set of fully-integrated backend services as of April 27, 2014
– Scott Guthrie about changes under Nadella, the competition with Amazon, and what differentiates Microsoft’s cloud products as of October 2, 2014
– Sam Guckenheimer on Microsoft Developer Division’s Journey to Cloud Cadence as of October 19, 2014
– Microsoft Azure: Marketable machine learning components capability for “a new data science economy”, and real-time analytics for Azure HDInsight service as of October 22, 2014
Microsoft Cloud state-of-the-art: Hyper-scale Azure with host SDN — IaaS 2.0 — Hybrid flexibility and freedom as of July 11, 2015
– Microsoft’s first quarter proving its ability to become a dominant force in cloud computing with superior cloud offerings as of Januar 27, 2015
– DataStax: a fully distributed and highly secure transactional database platform that is “always on” as of February 3, 2016
– Microsoft chairman: The transition to a subscription-based cloud business isn’t fast enough. Revamp the sales force for cloud-based selling as of June 6, 2016

Cloud Growth Helps Microsoft Beat Street in Q4 from TheStreet as of July 19, 2016 

… [0:34] and Microsoft’s Enterprise Mobility [Suite]
customers nearly doubled YoY to 33,000. [0:40] …

Note that the Q1FY16 report was that “Enterprise Mobility [Suite] customers more than doubled year-over-year to over 20,000, and the installed base grew nearly 6x year-over-year“. Enterprise Mobility Suite (EMS) is a service available in the CSP (Cloud Solution Partner program) along with Windows Intune, Office 365, Azure and CRM Online. The reason for that very impressive growth was given by Satya Nadella in the much earlier Q2FY15 report as:

Microsoft Enterprise Mobility Suite is one key of product innovation that I would like to highlight given the growth and uniqueness of our offering. Microsoft offers a comprehensive solution that brings together mobile device management, mobile application management, hybrid identity management and data protection into a unified offering via EMS.

Office 365 now includes new app experiences on all phones and tablets for mobile productivity.  Further, we have released completely new scenarios. This includes Office Sway for visualizing and sharing ideas; Delve, to help search and discover content; Office 365 Groups to make it easier to collaborate; andOffice 365 Video for secure media streaming for businesses.

Finally, we continue to invest in enterprise value by integrating MDM and the Enterprise Mobility Suite into Office 365; new encryption technologies and compliance certifications; and new eDiscovery capabilities in Exchange.

Overall at the highest level, our strategy here is to make sure that the Microsoft Services i.e. cloud services be it Azure, Office 365, CRM Online or Enterprise Mobility Suite are covering all the devices out there in the marketplace. So that, that way we maximize the opportunity we have for each of these subscription and capacity based services.

2.1 Enterprise cloud leadership

Now let’s get into the specifics of the Intelligent Cloud, an area of massive opportunity, as we are clearly one of the two enterprise cloud leaders. Companies looking to digitally transform need a trusted cloud partner and turn to Microsoft. As a result, Azure revenue and usage again grew by more than 100% this quarter. We see customers choose Microsoft for three reasons. They want a cloud provider that offers solutions that reflect the realities of today’s world and their enterprise-grade needs. They want higher level services to drive digital transformation, and they want a cloud open to developers of all types. Let me expand on each.

To start, a wide variety of customers turn to Azure because of their specific real-world needs. Multinationals choose us because we are the only hybrid and hyperscale cloud spanning multiple jurisdictions. We cover more countries and regions than any other cloud provider, from North America to Asia to Europe to Latin America. Our cloud respects data sovereignty and makes it possible for an enterprise application to work across these regions and jurisdictions. More than 80% of the world’s largest banks are Azure customers because of our leadership support for regulatory requirements, advanced security, and commitment to privacy. Large ISVs like SAP and Citrix as well as startups like Sprinklr also choose Azure because of our global reach and a broad set of platform services. Last week GE announced it will adopt our cloud for its IoT approach.

Next, Azure customers also value our unique higher-level services. Now at 33,000, we nearly doubled in one year the number of companies worldwide that have selected our Enterprise Mobility Solutions. The Dow Chemical Company leverages EMS along with Azure, Office 365, and Dynamics to give its thousands of employees secure real-time access to data and apps from anywhere.

Just yesterday, we announced Boeing will use Azure, our IoT suite, and Cortana Intelligence to drive digital transformation in commercial aviation, with connected airline systems optimization, predictive maintenance, and much more. This builds on great momentum in IoT, including our work with Rolls-Royce, Schneider Electric, and others.

This is great progress, but our ambitions are set even higher. Our Intelligent Cloud also enables cognitive services. Cortana Intelligence Suite offers machine learning capabilities and advanced predictive analytics. Customers like Jabil Circuit, Fruit of the Loom, Land O’Lakes, LIBER already realize the benefits of these new capabilities.

Lastly, central to our Intelligent Cloud ambition is providing developers with the tools and capabilities they need to build apps and services for the platforms and devices of their choice. We have the best support for what I would say is the most open platform for all developers. Not only is .NET first class but Linux is first class, Java is first class. The new Azure Container service cuts across both containers running on Windows, running across Linux. So again, it speaks to the enterprise reality. .NET Core 1.0 for open source and our ongoing work with companies such as Red Hat, Docker, and Mesosphere also reflects significant progress on this front. We continue to see traction from open source, with nearly a third of customer virtual machines on Azure running Linux.

So those would be the places where we are fairly differentiated, and that’s what you see us gaining both for enterprise customers and ISVs.

On the server side, premium server revenue grew double digits in constant currency year over year. New SQL Server 2016 helps us expand into new markets with built-in advanced analytics and unparalleled performance. More than 15,000 customers, including over 50% of the Fortune 500, have registered for the private preview of SQL Server for Linux. And we’re not slowing down. We will launch Windows Server 2016 and System Server 2016 later this year.

2.2 Every customer is also an ISV

One of the phenomena now is that pretty much anyone who is a customer of Azure is also in some form an ISV, and that’s no longer just limited to people who are “in the classic tech industry” or the software business. So every customer who starts off consuming Azure is also turning what is their IP in most cases into an ISV solution, which ultimately will even participate in AppSource. So at least the vision that we have is that every customer is a digital company that will have a digital IP component to it, and that we want to be able to partner with them in pretty unique ways.

That’s the same case with GE. It’s the same case with Boeing. It’s the same case with Schneider Electric or ABB or any one of the customers we are working with because they all are taking some of their assets and converting them into SaaS applications on Azure. And that’s something that we will in fact have distribution agreements with.

And AppSource is a pretty major announcement for us because we essentially created for SaaS applications and infrastructure applications a way to distribute their applications through us and our channel. And I think it makes in fact our cloud more attractive to many of them because of that. So we look – I think going forward, you’ll look to see – or you’ll see us do much more of this with many other customers of ours.

2.3 Hyperscale-plus-hybrid approach with annuity focus enabling cloud lead conversation with customers

The focus for us is in what I describe as this hyperscale-plus-hybrid approach when you think about the current approach, which is pretty unique to us. Overall, I believe this hyperscale plus hybrid architecturally helps us a lot with enterprise customers because we meet them where their realities are today and also the digital transformation needs going forward, so that’s one massive advantage we have.

And the way we track progress is to see how is our annuity growth of our server business, and how is our cloud growth. And if you look at this last quarter, our annuity grew double digits and our cloud grew triple digits. And that’s a pretty healthy growth rate, and that’s something that by design both in terms of the technical architecture as well as the traction we have in the marketplace and our sales efforts and so on are playing out well, and we are very bullish about that going forward.

The Transactional business is much more volatile because of the macro environment, IT budgets, and also the secular shift to the cloud. The question again that gets asked is about the cannibalization. But if you look at Boeing or you look at any of the other examples that I talk about when it comes to the cloud, our servers never did what these customers are now doing in our cloud. So at a fundamental long-term secular basis, we have new growth, new workloads, and that’s what we are focused on, and that’s a much bigger addressable market than anything our Transactional Server business had in the past.

[Amy E. Hood – Chief Financial Officer & Executive Vice President:]
The first thing really that I think Satya and I both focus on every quarter, every month, is how much of our business are we continuing to shift to annuity and specifically to the cloud. We structure all of our motions at this company, from how we engineer to how we do our go-to-markets to how we think about sales engagement to how we do our investments, fundamentally toward that long-term structural transition in the market.

In terms of server products and services, I tend to think of it as the all-up growth. It’s really about growing the cloud, growing the hybrid, and then whatever happens in the Transactional business happens.

And so to your question on Transactional performance, there were some deals that didn’t get done in Q3 that got done in Q4, and there were some deals done in Q4 on the Office side with large companies that I’m thrilled by. But at the same time, we still will focus on those deals moving to the cloud over time. And so this volatility that we are going to see because of macro and because of budget constraints, especially on Transactional, we will focus on because we expect excellent execution and have accountability to do that in the field. But our first priority, every time, is to make sure we are focused on annuity growth and digital transformation at our company, which is best done through that motion.

In terms of the sales motion they are absolutely incented more towards cloud versus Transactional going into this year.

I do believe that every conversation that we’re having with customers is cloud-led. That cloud-led conversation and making a plan for customers to best change and transform their own business certainly is a far more in-depth one than on occasion is required by long-time Transactional purchasers, especially in Office, as an example, because what we’re talking about now is really pivoting your business for the long term.

And so I’m sure there are examples where that has elongated the sales cycle, for good reason. But I would generally point back and say most of these are driven at the structural level, which is – structurally over time, on-premises Transactional business will move to the cloud or to a hybrid structure through an annuity revenue stream.
[END BY Amy E. Hood]

2.4 Meeting cloud needs of customers where they are

The position that we have taken is that we want to serve customers where they are and not assume very simplistically that the digital sovereignty needs of customers can be met out of a fewer data center approach. Because right now, given the secular trend to move to the cloud across all of the regulated industries across the globe, we think it’s wiser for us and our investors long term to be able to meet them where they are. And that’s what you see us. We are the only cloud that operates in China under Chinese law, the only cloud that operates in Germany under German law. And these are very critical competitive advantages to us.

And so we will track that, and we will be very demand driven. So in this case we’re not taking these positions of which regions to open and where to open them well in advance of our demand. If anything, I think our cycle times have significantly come down. So it will be demand-driven, but I don’t want to essentially put a cap because if the opportunity arises, and for us it’s a high ROI decision to open a new region, we will do so.

3. Windows strategy to achieve progress in More Personal Computing

For initial and additional details available earlier see my earlier posts:
– Windows Embedded is an enterprise business now, like the whole Windows business, with Handheld and Compact versions to lead in the overall Internet of Things market as well as of June 8, 2013
– How the device play will unfold in the new Microsoft organization? as of July 14, 2013
– With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term as of August 17, 2013
– Windows [inc. Phone] 8.x chances of becoming the alternative platform to iOS and Android: VERY SLIM as it is even more difficult for Microsoft now than any time before as of August 20, 2013
– Leading PC vendors of the past: Go enterprise or die! as of November 7, 2013
– Xamarin: C# developers of native “business” and “mobile workforce” applications now can easily work cross-platform, for Android and iOS clients as well as of November 15, 2013
Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
Microsoft Surface Pro 3 is the ultimate tablet product from Microsoft. What the market response will be? as of May 21, 2014
Windows 10 Technical Preview: Terry Myerson and Joe Belfiore on the future of Windows as of October 1, 2014
– The Era Of Sub-$90 Windows 8.1 Phones in U.S. as of October 3, 2014
– Windows 10 is here to help regain Microsoft’s leading position in ICT as of July 31, 2015
– Microsoft and partners to capitalize on Continuum for Phones instead of the exited Microsoft phone business as of June 5, 2016

We have increased Windows 10 monthly active devices and are now at more than 350 million. This is the fastest adoption rate of any prior Windows release. While we are proud of these results, given changes to our phone plan, we changed how we will assess progress. Going forward, we will track progress by regularly reporting the growth of Windows 10 monthly active devices in addition to progress on three aspects of our Windows strategy:

3.1 Deliver more value and innovation, particularly for enterprise customers

We continue to pursue our goal of moving people from needing Windows to choosing Windows to loving Windows. In two weeks, we will launch Windows 10 Anniversary Update, which takes a significant step forward in security. We are also extending Windows Hello to support apps and websites and delivering a range of new features like Windows Ink and updates to Microsoft Edge. We expect these advances will drive increased adoption of Windows 10, particularly in the enterprise, in the coming year. We already have strong traction, with over 96% of our enterprise customers piloting Windows 10.

3.2 Grow new monetization through services across our unified Windows platform

As we grow our install base and engagement, we generate more opportunity for Microsoft and our ecosystem. Bing profitability continues to grow, with greater than 40% of the search revenue in June from Windows 10 devices. Bing PC query share in the United States approached 22% this quarter, not including volume from AOL and Yahoo!. The Cortana search box has over 100 million monthly active users, with 8 billion questions asked to date.

We continue to drive growth in gaming by connecting fans on Xbox Live across Windows 10, iOS, and Android. Just this quarter we launched our Minecraft Realm subscription on Android and iOS. Overall engagement on Xbox Live is at record levels, with more than 49 million monthly active users, up 33% year over year. At E3 we announced our biggest lineup of exclusive games ever for Xbox One and Windows 10 PCs. And we announced Xbox Play Anywhere titles, where gamers can buy a game once and play it on both their Windows 10 PC and Xbox One. We also announced two new members of the Xbox One console family, the Xbox One S and Project Scorpio.

The Windows Store continues to grow, with new universal Windows apps like Bank of America, Roku, SiriusXM, Instagram, Facebook, Wine, Hulu, and popular PC games like Quantum Break.

3.3 Innovate in new device categories in partnership with our OEMs

Our hardware partners are embracing the new personal computing vision, with over 1,500 new devices designed to take advantage of Windows 10 innovations like Touch, Pen, Hello, and better performance and power efficiency.

Microsoft’s family of Surface devices continues to drive category growth, and we are reaching more commercial customers of all sizes with the support of our channel partners. We recently announced new Surface enterprise initiatives with IBM and Booz Allen Hamilton to enable more customer segments. Also in the past year, we grew our commercial Surface partner channel from over 150 to over 10,000.

Lastly this quarter, more and more developers and enterprise customers got to experience two entirely new device categories from Microsoft Surface Hub and Microsoft HoloLens. While we are still in the early days of both of these devices, we are seeing great traction with both enterprise customers and developers, making us optimistic about future growth.

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OpenStack adoption (by Q1 2016)

OpenStack Promise as per Moogsoft -- June 3, 2015For information on OpenStack provided earlier on this blog see:
– Disaggregation in the next-generation datacenter and HP’s Moonshot approach for the upcoming HP CloudSystem “private cloud in-a-box” with the promised HP Cloud OS based on the 4 years old OpenStack effort with others, ‘Experiencing the Cloud’, Dec 10, 2013
– Red Hat Enterprise Linux OpenStack Platform 4 delivery and Dell as the first company to OEM it co-engineered on Dell infrastructure with Red Hat, ‘Experiencing the Cloud’, Feb 19, 2014
To understand the OpenStack V4 level state-of-technology-development as of June 25, 2015:
– go to my homepage: https://lazure2.wordpress.com/
– or to the OpenStack related part of Microsoft Cloud state-of-the-art: Hyper-scale Azure with host SDN — IaaS 2.0 — Hybrid flexibility and freedom, ‘Experiencing the Cloud’, July 11, 2015

May 19, 2016:

Oh, the places you’ll go with OpenStack! by Mark Collier, OpenStack Foundation COO on ‘OpenStack Superuser’:

With OpenStack in tow you’ll go far — be it your house, your bank, your city or your car.

Just look at all of the exciting places we’re going:

From the phone in your pocket

The telecom industry is undergoing a massive shift, away from hundreds of proprietary devices in thousands of central offices accumulated over decades, to a much more efficient and flexible software plus commodity hardware approach. While some carriers like AT&T have already begun routing traffic from the 4G networks over OpenStack powered clouds to millions of cellphone users, the major wave of adoption is coming with the move to 5G, including plans from AT&T, Telefonica, SK Telekom, and Verizon.

We are on the cusp of a revolution that will completely re-imagine what it means to provide services in the trillion dollar telecom industry, with billions of connected devices riding on OpenStack-powered infrastructure in just a few years.

To the living room socket

The titans of TV like Comcast, DirecTV, and Time Warner Cable all rely on OpenStack to bring the latest entertainment to our homes efficiently, and innovators like DigitalFilm Tree are producing that content faster than ever thanks to cloud-based production workflows.

Your car, too, will get smart

Speaking of going places, back here on earth many of the world’s top automakers, such as BMW and the Volkswagen group, which includes Audi, Lamborghini, and even Bentley, are designing the future of transportation using OpenStack and big data. The hottest trends to watch in the auto world are electric zero emissions cars and self-driving cars. Like the “smart city” mentioned above, a proliferation of sensors plus connectivity call for distributed systems to bring it all together, creating a huge opportunity for OpenStack.

And your bank will take part

Money moves faster than ever, with digital payments from startups and established players alike competing for consumer attention. Against this backdrop of enormous market change, banks must meet an increasingly rigid set of regulatory rules, not to mention growing security threats. To empower their developers to innovate while staying diligent on regs and security, financial leaders like PayPal, FICO, TD Bank, American Express, and Visa are adopting OpenStack.

Your city must keep the pace

Powering the world’s cities is a complex task and here OpenStack is again driving automation, this time in the energy sector. State Grid Corporation, the world’s largest electric utility, serves over 120 million customers in China while relying on OpenStack in production.

Looking to the future, cities will be transformed by the proliferation of fast networks combined with cheap sensors. Unlocking the power of this mix are distributed systems, including OpenStack, to process, store, and move data. Case in point: tcpcloud in Prague is helping introduce “smart city” technology by utilizing inexpensive Raspberry Pis embedded in street poles, backed by a distributed system based on Kubernetes and OpenStack. These systems give city planners insight into traffic flows of both pedestrians and cars, and even measure weather quality. By routing not just packets but people, cities are literally load balancing their way to lower congestion and pollution.

From inner to outer space

The greatest medical breakthroughs of the next decade will come from analyzing massive data sets, thanks to the proliferation of distributed systems that put supercomputer power into the hands of every scientist. And OpenStack has a huge role to play empowering researchers all over the globe: from Melbourne to Madrid, Chicago to Chennai, or Berkeley to Beijing, everywhere you look you’ll find OpenStack.

To explore this world, I recently visited the Texas Advanced Computing Center (TACC) at the University of Texas at Austin where I toured a facility that houses one of the top 10 supercomputers in the world, code named “Stampede

But what really got me excited about the future was the sight of two large OpenStack clusters: one called Chameleon, and the newest addition, Jetstream, which put the power of more than 1,000 nodes and more than 15,000 cores into the hands of scientists at 350 universities. In fact, the Chameleon cloud was recently used in a class at the University of Arizona by students looking to discover exoplanets. Perhaps the next Neil deGrasse Tyson is out there using OpenStack to find a planet to explore for NASA’s Jet Propulsion Laboratories.

Where should we go next?

Mark Collier is OpenStack co-founder, and currently the OpenStack Foundation COO. This article was first published in Superuser Magazine, distributed at the Austin Summit.

May 9, 2016:

From OpenStack Summit Austin, Part 1: Vendors digging in for long haul by Al Sadowski, 451 Research, LLC:  This report provides highlights from the most recent OpenStack Summit

THE 451 TAKE OpenStack mindshare continues to grow for enterprises interested in deploying cloud-native applications in greenfield private cloud environments. However, its appeal is limited for legacy applications and enterprises sold on hyperscale multi-tenant cloud providers like AWS and Azure. There are several marquee enterprises with OpenStack as the central component of cloud transformations, but many are still leery of the perceived complexity of configuring, deploying and maintaining OpenStack-based architectures. Over the last few releases, processes for installation and upgrades, tooling, and API standardization across projects have improved as operators have become more vocal during the requirements phase. Community membership continues to grow on a global basis, and the supporting organization also depicts a similar geographic trend.

…  Horizontal scaling of Nova is much improved, based on input from CERN and Rackspace. CERN, an early OpenStack adopter, demonstrated the ability for the open source platform to scale – it now has 165,000 cores running OpenStack. However, Walmart, PayPal and eBay are operating larger OpenStack environments.

May 18, 2015:

Walmart‘s Cloud Journey by Amandeep Singh Juneja
Sr. Director, Cloud Engineering and Operations, WalmartLabs: Introduction to World’s largest retailer and its journey to build a large private Cloud.

Amandeep Singh Juneja is Senior Director for Cloud Operations and Engineering at WalmartLabs. In his current role, Amandeep is responsible for the build out of elastic cloud used by various Walmart Ecommerce properties. Prior to his current role at Walmart Labs, Amandeep has held various leadership roles at HP, WebOS (Palm) and eBay.

May 19, 2015:

OpenStack Update from eBay and PayPal by Subbu Allamaraju
Chief Engineer, Cloud, eBay Inc: Journey and future of OpenStack eBay and PayPal

Subbu is the Chief Engineer of cloud at eBay Inc. His team builds and operates a multi-tenant geographically distributed OpenStack based private cloud. This cloud now serves 100% of PayPal web and mid tier workloads, significant parts of eBay front end and services, and thousands of users for their dev/test activities.

May 18, 2015:

Architecting Organizational Change at TD Bank by Graeme Peacock, VP Engineering, TD Bank Group

Graeme cut his teeth in the financial services consulting industry by designing and developing real-time Trading, Risk and Clearing applications. He then joined NatWest Markets and J.P. Morgan in executive level roles within the Equity Derivatives business lines.
Graeme then moved to a Silicon Valley Startup to expand his skillset as V.P. of Engineering at Application Networks. His responsibility extended to Strategy, Innovation, Product Development, Release Management and Support to some of the biggest names in the Financial Services Sector.
For the last 10 years, he has held Divisional CIO roles at Citigroup and Deutsche Bank, both of which saw him responsible for Credit, Securitized and Emerging Market businesses.
Graeme moved back to a V.P. of Engineering role at TD Bank Group several years ago. He currently oversees all Infrastructure Innovation — everything form Mobile and Desktop to Database, Middleware and Cloud.  His focus is on the transformational: software development techniques, infrastructure design patterns, and DevOps processes.

TD Bank uses cloud as catalyst for cultural change in IT
May 18, 2015 Written by Jonathan Brandon for Business Cloud News

North American retail banking outfit TD Bank is using OpenStack among a range of other open source cloud technologies to help catalyse cultural change as it looks to reduce costs and technology redundancy, explained TD Bank group vice president of engineering Graeme Peacock.

TD Bank is one of Canada’s largest retail banks, having divested many of its investment banking divisions over the past ten years while buying up smaller American retail banks in a bid to offer cross-border banking services.
Peacock, who was speaking at the OpenStack Summit in Vancouver this week, said TD Bank is in the midst of a massive transition in how it procures, deploys and consumes technology. The bank aims to have about 80 per cent of its 4,000 application estate moved over to the cloud over the next five years.
“If they can’t build it on cloud they need to get my permission to obtain a physical server. Which is pretty hard to get,” he said.
But the company’s legacy of acquisition over the past decade has shaped the evolution of both the technology and systems in place at the bank as well as the IT culture and the way those systems and technologies are managed.
“Growing from acquisition means we’ve developed a very project-based culture, and you’re making a lot of transactional decisions within those projects. There are consequences to growing through acquisition – TD is very vendor-centric,” he explained.
“There are a lot of vendors here and I’m fairly certain we’ve bought at least one of everything you’ve ever made. That’s led to the landscape that we’ve had, which has lots of customisation. It’s very expensive and there is little reused.”
Peacock said much of what the bank wants to do is fairly straightforward: moving off highly customised expensive equipment and services, and moving on to more open, standardised commodity platforms, and OpenStack is but one infrastructure-centric tool helping the bank deliver on that goal (it’s using it to stand up an internal private cloud). But the company also has to deal with other aspects a recent string of acquisition has left at the bank, including the fact that its development teams are still quite siloed, in order to reach its goals.
In order to standardise and reduce the number of services the firm’s developers use, the bank  created an engineering centre in Manhattan and elected a team of engineers and developers (currently numbering 30, but will hit roughly 50 by the end of the year) spread between Toronto and New York City, all focused on helping it embrace a cloud-first, slimmed-down application landscape.
The centre and the central engineering team work with other development teams and infrastructure specialists across the bank, collecting feedback through fortnightly Q&As and feeding that back into the solutions being developed and the platforms being procured. Solving developer team fragmentation will ultimately help the bank move forward on this new path sustainably, he explained.
“When your developer community is so siloed you don’t end up adopting standards… you end up with 27 versions of Softcat. Which we have, by the way,” he said.
“This is a big undertaking, and one that has to be continuous. Business lines also have to move with us to decompose those applications and help deliver against those commitments,” he added.

May 9, 2016: From OpenStack Summit Austin, Part 1: Vendors digging in for long haul continued:

While OpenStack may have been conceived as an open source multi-tenant IaaS, its future success will mainly come from hosted and on-premises private cloud deployments. Yes, there are many pockets of success with regional or vertical-focused public clouds based on OpenStack, but none with the scale of AWS or the growth of Microsoft Azure. Hewlett Packard Enterprise shuttered its OpenStack Helion-based public cloud, and Rackspace shifted engineering resources away from its own public cloud. Rackspace, the service provider with the largest share of OpenStack-related revenue, says its private cloud is growing in the ‘high double digits.’ Currently, 56% of OpenStack’s service-provider revenue total is public cloud-based, but we expect private cloud will account for a larger portion over the next few years.

October 21, 2015:

A new model to deliver public cloud by Bill Hill, SVP and GM, HP Cloud

Over the past several years, HP has built its strategy on the idea that a hybrid infrastructure is the future of enterprise IT. In doing so, we have committed to helping our customers seamlessly manage their business across traditional IT and private, managed or public cloud environments, allowing them to optimize their infrastructure for each application’s unique requirements.
The market for hybrid infrastructure is evolving quickly. Today, our customers are consistently telling us that in order to meet their full spectrum of needs, they want a hybrid combination of efficiently managed traditional IT and private cloud, as well as access to SaaS applications and public cloud capabilities for certain workloads. In addition, they are pushing for delivery of these solutions faster than ever before.
With these customer needs in mind, we have made the decision to double-down on our private and managed cloud capabilities. For cloud-enabling software and solutions, we will continue to innovate and invest in our HP Helion OpenStack®platform. HP Helion OpenStack® has seen strong customer adoption and now runs our industry leading private cloud solution, HP Helion CloudSystem, which continues to deliver strong double-digit revenue growth and win enterprise customers. On the cloud services side, we will focus our resources on our Managed and Virtual Private Cloud offerings. These offerings will continue to expand, and we will have some very exciting announcements on these fronts in the coming weeks.

Public cloud is also an important part of our customers’ hybrid cloud strategy, and our customers are telling us that the lines between all the different cloud manifestations are blurring. Customers tell us that they want the ability to bring together multiple cloud environments under a flexible and enterprise-grade hybrid cloud model. In order to deliver on this demand with best-of-breed public cloud offerings, we will move to a strategic, multiple partner-based model for public cloud capabilities, as a component of how we deliver these hybrid cloud solutions to enterprise customers.

Therefore, we will sunset our HP Helion Public Cloud offering on January 31, 2016. As we have before, we will help our customers design, build and run the best cloud environments suited to their needs – based on their workloads and their business and industry requirements.

To support this new model, we will continue to aggressively grow our partner ecosystem and integrate different public cloud environments. To enable this flexibility, we are helping customers build cloud-portable applications based on HP Helion OpenStack® and the HP Helion Development Platform. In Europe, we are leading the Cloud28+ initiative that is bringing together commercial and public sector IT vendors and EU regulators to develop common cloud service offerings across 28 different countries.
For customers who want access to existing large-scale public cloud providers, we have already added greater support for Amazon Web Services as part of our hybrid delivery with HP Helion Eucalyptus, and we have worked with Microsoft to support Office 365 and Azure. We also support our PaaS customers wherever they want to run our Cloud Foundry platform – in their own private clouds, in our managed cloud, or in a large-scale public cloud such as AWS or Azure.
All of these are key elements in helping our customers transform into a hybrid, multi-cloud IT world. We will continue to innovate and grow in our areas of strength, we will continue to help our partners and to help develop the broader open cloud ecosystem, and we will continue to listen to our customers to understand how we can help them with their entire end-to-end IT strategies.

 December 1, 2015:

Hewlett Packard Enterprise and Microsoft announce plans to deliver integrated hybrid IT infrastructure press release

London, U.K. – December 1, 2015 – Today at Hewlett Packard Enterprise Discover, HPE and Microsoft Corp. announced new innovation in Hybrid Cloud computing through Microsoft Azure, HPE infrastructure and services, and new program offerings. The extended partnership appoints Microsoft Azure as a preferred public cloud partner for HPE customers while HPE will serve as a preferred partner in providing infrastructure and services for Microsoft’s hybrid cloud offerings.

“Hewlett Packard Enterprise is committed to helping businesses transform to hybrid cloud environments in order to drive growth and value,” said Meg Whitman, President and CEO, Hewlett Packard Enterprise. “Public cloud services, like those Azure provides, are an important aspect of a hybrid cloud strategy and Microsoft Azure blends perfectly with HPE solutions to deliver what our customers need most.”
The partnering companies will collaborate across engineering and services to integrate innovative compute platforms that help customers optimize their IT environment, leverage new consumption models and accelerate their business further, faster.
“Our mission to empower every organization on the planet is a driving force behind our broad partnership with Hewlett Packard Enterprise that spans Microsoft Azure, Office 365 and Windows 10,” said Satya Nadella, CEO, Microsoft. “We are now extending our longstanding partnership by blending the power of Azure with HPE’s leading infrastructure, support and services to make the cloud more accessible to enterprises around the globe.”
Product Integration and Collaboration HPE and Microsoft are introducing the first hyper-converged system with true hybrid cloud capabilities, the HPE Hyper-Converged 250 for Microsoft Cloud Platform System StandardBringing together industry leading HPE ProLiant technology and Microsoft Azure innovation, the jointly engineered solution brings Azure services to customers’ datacenters, empowering users to choose where and how they want to leverage the cloud. An Azure management portal enables business users to self-deploy Windows and Linux workloads, while ensuring IT has central oversight. Azure services provide reliable backup and disaster recovery, and with HPE OneView for Microsoft System Center, customers get an integrated management experience across all system components. HPE offers hardware and software support, installation and startup services to customers to speed deployment to just a matter of hours, lower risk and decrease total cost of ownership. The CS 250 is available to order today.
As part of the expanded partnership, HPE will enable Azure consumption and services on every HPE server, which allows customers to rapidly realize the benefits of hybrid cloud.
Extended Support and Services to Simplify Cloud
HPE and Microsoft will create HPE Azure Centers of Excellence in Palo Alto, Calif. and Houston, Texas, to ensure customers have a seamless hybrid cloud experience when leveraging Azure across HPE infrastructure, software and services. Through the work at these centers, both companies will invest in continuing advancements in Hybrid IT and Composable Infrastructure.
Because Azure is a preferred provider of public cloud for HPE customers, HPE also plans to certify an additional 5,000 Azure Cloud Architects through its Global Services Practice. This will extend its Enterprise Services offerings to bring customers an open, agile hybrid cloud with improved security that integrates with Azure.
Partner Program Collaboration
Microsoft will join the HPE Composable Infrastructure Partner Program to accelerate innovation for the next-generation infrastructure and advance the automation and integration of Microsoft System Center and HPE OneView orchestration tools with today’s infrastructure.
Likewise, HPE joined two Microsoft programs that help customers accelerate their hybrid cloud journey through end-to-end cloud, mobility, identity and productivity solutions. As a participant in Microsoft’s Cloud Solution Provider program, HPE will sell Microsoft cloud solutions across Azure, the Microsoft Enterprise Mobility Suite and Office 365.

May 9, 2016: From OpenStack Summit Austin, Part 1: Vendors digging in for long haul continued:

VENDOR DEVELOPMENTS

As of the Mitaka release, two new gold members were added: UnitedStack and EasyStack, both from China. Other service providers and vendors shared their customer momentum and product updates with 451 Research during the summit. Among the highlights are: ƒ

  • AT&T has cobbled together a DevOps team from 67 different organizations, in order to transform into a software company. ƒ
  • All of GoDaddy’s new servers are going into its OpenStack environment. It is also using the Ironic (bare metal) project and exploring containers on OpenStack. ƒ
  • SwiftStack built a commercial product with an AWS-like consumption model using the Swift (object storage) project. It now has over 60 customers, including eBay, PayPal, Burton Snowboards and Ancestry.com. ƒ
  • OVH is based in France and operates a predominately pan-Europe public cloud. It added Nova compute in 2014, and currently has 75PB on Swift storage. ƒ
  • Unitas Global says OpenStack-related enterprise engagements are a large part of its 100% Y/Y growth. While it does not contribute code, it is helping to develop operational efficiencies and working with Canonical to deploy ‘vanilla’ OpenStack using Juju charms. Tableau Software is a client. ƒ
  • DreamHost is operating an OpenStack public cloud, DreamCompute, and is a supporter of the Astara (network orchestration) project. It claims 2,000 customers for DreamCompute and 10,000 customers for its object storage product. ƒ
  • Platform9 is a unique OpenStack in SaaS startup with 20 paying customers. Clients bring their own hardware, and the software provides the management functions and takes care of patching and upgrades. ƒ
  • AppFormix is a software startup focused on cloud operators and application developers that has formed a licensing agreement with Rackspace. Its analytics and capacity-planning dashboard software will now be deployed on Rackspace’s OpenStack private cloud. The software also works with Azure and AWS. ƒ
  • Tesora is leveraging the Trove project to offer DBaaS. The vendor built a plug-in for Mirantis’ Fuel installer. The collaboration claims to make commercial, open source relational and NoSQL databases easier for administrators to deploy.

April 25, 2016:

AT&T’s Cloud Journey with OpenStack by Sorabh Saxena SVP, Software Development & Engineering, AT&T

OpenStack + AT&T Innovation = AT&T Integrated Cloud.

AT&T’s network has experienced enormous growth in traffic in the last several years and the trend continues unabated. Our software defined network initiative addresses the escalating traffic demands and brings greater agility and velocity to delivering features to end customers. The underlying fabric of this software defined network is AT&T Integrated Cloud (AIC).

Sorabh Saxena, AT&T’s SVP of Software Development & Engineering, will share several use cases that will highlight a multi-dimensional strategy for delivering an enterprise & service provider scale cloud. The use cases will illustrate OpenStack as the foundational element of AIC, AT&T solutions that complement it, and how it’s integrated with the larger AT&T ecosystem.

http://att.com/ecomp


As the Senior Vice President of Software Development and Engineering at AT&T, Sorabh Saxena is leading AT&T’s transformation to a software-based company.  Towards that goal, he is leading the development of platforms that include AT&T’s Integrated Cloud (AIC), API, Data, and Business Functions. Additionally, he manages delivery and production support of AT&T’s software defined network.

Sorabh and his organization are also responsible for technology solutions and architecture for all IT projects, AT&T Operation Support Systems and software driven business transformation programs that are positioning AT&T to be a digital first, integrated communications company with a best in class cost structure. Sorabh is also championing a cultural shift with a focus on workforce development and software & technology skills development.

Through Sorabh and his team’s efforts associated with AIC, AT&T is implementing an industry leading, highly complex and massively scaled OpenStack cloud.  He is an advocate of OpenStack and his organization contributes content to the community that represents the needs of large enterprises and communication services providers.

April 25, 2016And the Superuser Award goes to… AT&T takes the fourth annual Superuser Award.

AUSTIN, Texas — The OpenStack Austin Summit kicked off day one by awarding the Superuser Award to AT&T.

NTT, winners of the Tokyo edition, passed the baton onstage to the crew from AT&T.

AT&T is a legacy telco which is transforming itself by adopting virtual infrastructure and a software defined networking focus in order to compete in the market and create value for customers in the next five years and beyond. They have almost too many OpenStack accomplishments to list–read their full application here.

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Sorabh Saxena gives a snapshot of AT&Ts OpenStack projects during the keynote.

The OpenStack Foundation launched the Superuser Awards to recognize, support and celebrate teams of end-users and operators that use OpenStack to meaningfully improve their businesses while contributing back to the community.

The legacy telecom is in the top 20 percent for upstream contributions with plans to increase this significantly in 2016.

It’s time for the community to determine the winner of the Superuser Award to be presented at the OpenStack Austin Summit. Based on the nominations received, the Superuser Editorial Advisory Board conducted the first round of judging and narrowed the pool to four finalists.

Now, it’s your turn.

The team from AT&T is one of the four finalists. Review the nomination criteria below, check out the other nominees and cast your vote before the deadline, Friday, April 8 at 11:59 p.m.Pacific Daylight Time. Voting is limited to one ballot per person.

How has OpenStack transformed your business?

AT&T is a legacy telco which is transforming itself by adopting virtual infrastructure and a software defined networking focus in order to compete in the market and create value for customers in the next five years and beyond.

  1. Virtualization and virtual network functions (VNFs) are of critical importance to the Telecom industry to address growth and agility. AT&T’s Domain 2.0 Industry Whitepaper released in 2013 outlines the need as well as direction.
  2. AT&T chose OpenStack as the core foundation of their cloud and virtualization strategy
  3. OpenStack has reinforced AT&T’s open source strategy and strengthened our dedication to the community as we actively promote and invest resources in OpenStack
  4. AT&T is committing staff and resources to drive the vision and innovation in the OpenStack and OPNFV communities to help drive OpenStack as the default cloud orchestrator for the Telecom industry
  5. AT&T as a founding member of the ETSI ISG network functions virtualization (NFV) helped drive OpenStack as the cloud orchestrator in the NFV platform framework. OpenStack was positioned as the VIM – Virtual Infrastructure Manager. This accelerated the convergence of the Telco industry onto OpenStack.

OpenStack serves as a critical foundation for AT&T’s software-defined networking (SDN) and NFV future and we take pride in the following:

  • AT&T has deployed 70+ OpenStack (Juno & Kilo based) clouds globally, which are currently operational. Of the 70+ clouds 57 are production application and network clouds.
  • AT&T plans 90% growth, going to 100+ production application and network clouds by the end of 2016.
  • AT&T connects more than 14 million wireless customers via virtualized networks, with significant subscriber cut-over planned again in 2016
  • AT&T controls 5.7% of our network resources (29 Telco production grade VNFs) with OpenStack, with plans to reach 30% by the end of 2016 and 75% by 2020.
  • AT&T trained more than 100 staff in OpenStack in 2015

AT&T plans to expand to expand its community team of 50+ employees in 2016 As the chosen cloud platform OpenStack enabled AT&T in the following SDN and NFV related initiatives:

  • Our recently announced 5G field trials in Austin
  • Re-launch of unlimited data to mobility customers
  • Launch of AT&T Collaborate a next generation communication tool for enterprise
  • Provisioning of a Network on Demand platform to more than 500 enterprise customers
  • Connected Car and MVNO (Mobile Virtual Network Operator)
  • Mobile Call Recording
  • Internally we are virtualizing our control services like DNS, NAT, NTP, DHCP, radius, firewalls, load balancers and probes for fault and performance management.

Since 2012, AT&T has developed all of our significant new applications in a cloud native fashion hosted on OpenStack. We also architected OpenStack to support legacy apps.

  • AT&T’s SilverLining Cloud (predecessor to AIC) leveraged the OpenStack Diablo release, dating as far back as 2011
  • OpenStack currently resides on over 15,000 VMs worldwide, with the expectation of further, significant growth coming in 2016-17
  • AT&T’s OpenStack integrated Orchestration framework has resulted in a 75% reduction in turnaround time for requests for virtual resources
  • AT&T Plans to move 80% of our Legacy IT into the OpenStack based virtualized cloud environment within coming years
  • Uniform set of APIs exposed by OpenStack allows AT&T business units to leverage a “develop-once-run-everywhere” set of tools OpenStack helps AT&T’s strategy to begin to adopt best of the breed solutions at five 9’s of reliability for:
    • NFV
    • Internet-scale storage service
    • SDN
  • Putting all AT&T’s workloads on one common platform Deployment Automation: OpenStack modules have enabled AT&T to cost-effectively manage the OpenStack configuration in an automated, holistic fashion.
  • Using OpenStack Heat, AT&T pushed rolling updates and incremental changes across 70+ OpenStack clouds. Doing it manually would be take many more people and a much longer schedule.
  • Using OpenStack Fuel as a pivotal component in its cloud deployments AT&T accelerates the otherwise consuming, complex, and error-prone process of deploying, testing, and maintaining various configuration flavors of OpenStack at scale. AT&T was a major contributor towards Fuel 7.0 and Fuel 8.0 requirements. OpenStack has been a pivotal driver of AT&T’s overall culture shift. AT&T as an organization is in the midst of a massive culture shift from a Legacy Telco to a company where new skills, techniques and solutions are embraced.

OpenStack has been a key driver of this transformation in the following ways:

  • AT&T is now building 50 percent of all software on open source technologies
  • Allowing for the adoption of a dev ops model that creates a more unified team working towards a better end product
  • Development transitioned from a waterfall to cloud-native CICD methodologies
  • Developers continue to support OpenStack and make their applications cloud-native whenever possible.

How has the organization participated in or contributed to the OpenStack community?

AT&T was the first U.S. telecom service provider to sign up for and adopt the then early stage NASA-spawned OpenStack cloud initiative, back in 2011.

  • AT&T has been an active OpenStack contributor since the Bexar release.
  • AT&T has been a Platinum Member of the OpenStack Foundation since its origins in 2012 after helping to create its bylaws.
  • Toby Ford, AVP AT&T Cloud Technology has provided vision, technology leadership, and innovation to OpenStack ecosystem as an OpenStack Foundation board member since late 2012.
  • AT&T is founding member of ETSI, and OPNFV.
  • AT&T has invested in building an OpenStack upstream contribution team with 25 current employees and a target for 50+ employees by the end of 2016.
  • During the early years of OpenStack, AT&T brought many important use-cases to the community. AT&T worked towards solving those use-cases by leveraging various OpenStack modules, in turn encouraging other enterprises to have confidence in the young ecosystem.
  • AT&T drove these following Telco-grade blueprint contributions to past releases of OpenStack:
    • VLAN aware VMs (i.e. Trunked vNICs) – Support for BGP VPN, and shared volumes between guest VMs
    • Complex query support for statistics in Ceilometer
    • Spell checker gate job
    • Metering support for PCI/PCIe per VM tenant
    • PCI passthrough measurement in Ceilometer – Coverage measurement gate job
    • Nova using ephemeral storage with cinder
    • Climate subscription mechanism
    • Access switch port discovery for bare metal nodes
    • SLA enforcement per vNIC – MPLS VPNaaS
    • NIC-state aware scheduling
  • Toby Ford has regularly been invited to present keynotes, sessions, and panel talks at a number of OpenStack summits. For instance: Role of OpenStack in a Telco: User case study – at Atlanta Summit May 2014 – Leveraging OpenStack to Solve Telco needs: Intro to SDN/NFV – Atlanta Summit May 2014 – Telco OpenStack Roadmap Panel Talk – Tokyo Summit October 2015 – OpenStack Roadmap Software Trajectory – Atlanta Summit May 2014 – Cloud Control to Major Telco – Paris Summit November 2014.
  • Greg Stiegler, assistant vice president – AT&T cloud tools & development organization represented the AT&T technology development organization at the Tokyo Summit.
  • AT&T Cloud and D2 Architecture team members were invited to present various keynote sessions, summit sessions and panel talks including: – Participation at the Women of OpenStack Event – Tokyo Summit 2015 – Empower Your Cloud Through Neutron Service Function Chaining – Tokyo Summit Oct 2015 – OPNFV Panel – Vancouver Summit May 2015 – OpenStack as a Platform for Innovation – Keynote at OpenStack Silicon Valley – Aug 2015 – Taking OpenStack From Zero to Production in a Fortune-500 – Tokyo Summit October 2015 – Operating at Web-scale: Containers and OpenStack Panel Talk – Tokyo Summit October 2015 * AT&T strives to collaborate with other leading industry partners in the OpenStack ecosystem. This has led to the entire community benefiting from AT&T’s innovation.
  • Margaret Chiosi gives talks worldwide on AT&T’s D2.0 vision at many Telco conferences ranging from Optics (OFC) to SDN/NFV conferences advocating OpenStack as the de-facto cloud orchestrator.
  • AT&T Entertainment Group (DirecTV) architected multi-hypervisor hybrid OpenStack cloud by designing Neutron ML2 plugin. This innovation helped achieve integration between legacy virtualization and OpenStack.
  • AT&T is proud to drive OpenStack adoption by sharing knowledge back to the OpenStack community in the form of these summit sessions at the upcoming Austin summit:
    • Telco Cloud Requirements: What VNFs Are Asking For
    • Using a Service VM as an IPv6 vRouter
    • Service Function Chaining
    • Technology Analysis Perspective
    • Deploying Lots of Teeny Tiny Telco Clouds
    • Everything You Ever Wanted to Know about OpenStack At Scale
    • Valet: Holistic Data Center Optimization for OpenStack
    • Gluon: An Enabler for NFV
    • Among the Cloud: Open Source NFV + SDN Deployment
    • AT&T: Driving Enterprise Workloads on KVM and vCenter using OpenStack as the Unified Control Plane
    • Striving for High-Performance NFV Grid on OpenStack. Why you, and every OpenStack community member should be excited about it
    • OpenStack at Carrier Scale
  • AT&T is the “first to marketwith deployment of OpenStack supported carrier-grade Virtual Network Functions. We provide the community with integral data, information, and first-hand knowledge on the trials and tribulations experienced deploying NFV technology.
  • AT&T ranks in the top 20 percent of all companies in terms of upstream contribution (code, documentation, blueprints), with plans to increase this significantly in 2016.
    • Commits: 1200+
    • Lines of Code: 116,566
    • Change Requests: 618
    • Patch Sets: 1490
    • Draft Blueprints: 76
    • Completed Blueprints: 30
    • Filed Bugs: 350
    • Resolved Bugs: 250

What is the scale of the OpenStack deployment?

  • AT&T’s OpenStack based AIC is deployed at 70+ sites across the world. Of the 70+ 57 are production app and network clouds.
  • AT&T plans 90% growth, going to 100+ production app and network clouds by end of 2016.
  • AT&T connects more than 14 million of the 134.5 million wireless customers via virtualized networks with significant subscriber cutover planned again in 2016
  • AT&T controls 5.7% of our network resources (29 Telco production grade VNF) with a goal of high 80s by end of 2016) on OpenStack.
  • Production workloads also include AT&T’s Connected Car, Network on Demand, and AT&T Collaborate among many more.

How is this team innovating with OpenStack?

  • AT&T and AT&T Labs are leveraging OpenStack to innovate with Containers and NFV technology.
  • Containers are a key part of AT&Ts Cloud Native Architecture. AT&T chairs the Open Container Initiative (OCI) to drive the standardization around container formats.
  • AT&T is leading the effort to improve Nova and Neutron’s interface to SDN controllers.
  • Margaret Chiosi, an early design collaborator to Neutron, ETSI NFV, now serves as President of OPNFV. AT&T is utilizing its position with OPNFV to help shape the future of OpenStack / NFV. OpenStack has enabled AT&T to innovate extensively.

The following recent unique workloads would not be possible without the SDN and NFV capabilities which OpenStack enables: * Our recent announcements of 5G field trials in Austin * Re-launch of unlimited data to mobility customers * Launch of AT&T Collaborate * Network on Demand platform to more than 500 enterprise customers * Connected Car and MVNO (Mobile Virtual Network Operator) * Mobile Call Recording New services by AT&T Entertainment Group (DirecTV) that would use OpenStack based cloud infrastructure in coming years: * NFL Sunday Ticket with up to 8 simultaneous games * DirecTV Streaming Service Without Need For satellite dish

In summary – the innovation with OpenStack is not just our unique workloads, but also to support them together under the same framework, management systems, development/test, CI/CD pipelines, and deployment automation toolset(s).

Who are the team members?

  • AT&T Cloud and D2 architecture team
  • AT&T Integrated Cloud (AIC) Members: Margaret Chiosi, distinguished member of technical staff, president of OPNFV; Toby Ford, AVP – AT&T cloud technology & D2 architecture – strategy, architecture & pPlanning, and OpenStack Foundation Board Member; Sunil Jethwani – director, cloud & SDN architecture, AT&T Entertainment Group; Andrew Leasck – director – AT&T Integrated cloud development; Janet Morris – director – AT&T integrated cloud development; Sorabh Saxena, senior vice president – AT&T software development & engineering organization; Praful Shanghavi – director – AT&T integrated cloud development; Bryan Sullivan – director member of technical staff; Ryan Van Wyk – executive director – AT&T integrated cloud development.
  • AT&T’s project teams top contributors: Paul Carver, Steve Wilkerson, John Tran, Joe D’andrea, Darren Shaw.

April 30, 2016Swisscom in Production with OpenStack and Cloud Foundry

Swisscom has one of the largest in-production industry standard Platform as a Service built on OpenStack. Their offering is focused on providing an enterprise-grade PaaS environment to customers worldwide and with various delivery models based on Cloud Foundry and OpenStack. Swisscom embarked early on the OpenStack journey to deploy their app cloud partnering with Red Hat, Cloud Foundry, and PLUMgrid. With services such as MongoDB, MariaDB, RabbitMQ, ELK, and an object storage, the PaaS cloud offers what developers need to get started right away. Join this panel for take-away lessons on Swisscom’s journey, the technologies, partnerships, and developers who are building apps everyday on Swisscom’s OpenStack cloud.

May 23, 2016How OpenStack public cloud + Cloud Foundry = a winning platform for telecoms interview on ‘OpenStack Superuser’ with Marcel Härry, chief architect, PaaS at Swisscom

Swisscom has one of the largest in-production industry standard platform-as-a-service built on OpenStack.

Their offering focuses on providing an enterprise-grade PaaS environment to customers worldwide and with various delivery models based on Cloud Foundry and OpenStack. Swisscom, Switzerland’s leading telecom provider, embarked early on the OpenStack journey to deploy their app cloud partnering with Red Hat, Cloud Foundry and PLUMgrid.

Superuser interviewed Marcel Härry, chief architect, PaaS at Swisscom and member of theTechnical Advisory Board of the Cloud Foundry Foundation to find out more.

How are you using OpenStack?

OpenStack has allowed us to rapidly develop and deploy our Cloud Foundry-based PaaS offering, as well as to rapidly develop new features within SDN and containers. OpenStack is the true enabler for rapid development and delivery.

An example: after half a year from the initial design and setup, we already delivered two production instances of our PaaS offering built on multiple OpenStack installations on different sites. Today we are already running multiple production deployments for high-profile customers, who further develop their SaaS offerings using our platform. Additionally, we are providing the infrastructure for numerous lab and development instances. These environments allow us to harden and stabilize new features while maintaining a rapid pace of innovation, while still ensuring a solid environment.

We are running numerous OpenStack stacks, all limited – by design – to a single region, and single availability zone. Their size ranges from a handful of compute nodes, to multiple dozens of compute nodes, scaled based on the needs of the specific workloads. Our intention is not to build overly large deployments, but rather to build multiple smaller stacks, hosting workloads that can be migrated between environments. These stacks are hosting thousands of VMs, which in turn are hosting tens of thousands of containers to run production applications or service instances for our customers.

What kinds of applications or workloads are you currently running on OpenStack?

We’ve been using OpenStack for almost three years now as our infrastructure orchestrator. Swisscom built its Elastic Cloud on top of OpenStack. On top of this we run Swisscom’s Application Cloud, or PaaS, built on Cloud Foundry with PLUMgrid as the SDN layer. Together, the company’s clouds deliver IaaS to IT architects, SaaS to end users and PaaS to app developers among other services and applications. We mainly run our PaaS/Cloud Foundry environment on OpenStack as well as the correlated managed services (i.e. a kind of DBaaS, Message Service aaS etc.) which are running themselves in Docker containers.

What challenges have you faced in your organization regarding OpenStack, and how did you overcome them?

The learning curve for OpenStack is pretty steep. When we started three years ago almost no reference architectures were available, especially none with enterprise-grade requirements such as dual-site, high availability (HA) capabilities on various levels and so forth. In addition, we went directly into the SDN, SDS levels of implementation which was a big, but very successful step at the end of the day.

What were your major milestones?

Swisscom’s go-live for its first beta environment was in spring of 2014, go live for an internal development (at Swisscom) was spring of 2015, and the go-live for its public Cloud Foundry environment fully hosted on OpenStack was in the fall of 2015. The go-live date for enterprise-grade and business-critical workloads on top of our stack from various multinational companies in verticals like finance or industry is spring, 2016, and Swisscom recently announced Swiss Re as one of its first large enterprise cloud customers.

What have been the biggest benefits to your organization as a result of using OpenStack?

Pluggability and multi-vendor interoperability (for instance with SDN like PLUMgrid or SDS like ScaleIO) to avoid vendor lock in and create a seamless system. OpenStack enabled Swisscom to experiment with deployments utilizing a DevOps model and environment to deploy and develop applications faster. It simplified the move from PoC to production environments and enabled us to easily scale out services utilizing a distributed cluster-based architecture.

What advice do you have for companies considering a move to OpenStack?

It’s hard in the beginning but it’s really worth it. Be wise when you select your partners and vendors, this will help you to be online in a very short amount of time. Think about driving your internal organization towards a dev-ops model to be ready for the first deployments, as well as enabling your firm to change deployment models (e.g. going cloud-native) for your workloads when needed.

How do you participate in the community?

This year’s Austin event was our second OpenStack Summit where we provided insights into our deployment and architecture, contributing back to the community in terms of best practices, as well as providing real-world production use-cases. Furthermore, we directly contribute patches and improvements to various OpenStack projects. Some of these patches have already been accepted, while a few are in the pipeline to be further polished for publishing. Additionally, we are working very closely together with our vendors – RedHat, EMC, ClusterHQ/Flocker, PLUMgrid as well as the Cloud Foundry Foundation – and work together to further improve their integration and stability within the OpenStack project. For example, we worked closely together with Flocker for their cinder-based driver to orchestrate persistency among containers. Furthermore, we have provided many bug reports through our vendors and have worked together with them on fixes which then have made their way back into the OpenStack community.

What’s next?

We have a perfect solution for non-persistent container workloads for our customers. We are constantly evolving this product and are working especially hard to meet the enterprise- and finance-verticals requirements when it comes to the infrastructure orchestration of OpenStack.

Härry spoke about OpenStack in production at the recent Austin Summit, along with Pere Monclus of PLUMgrid, Chip Childers of the Cloud Foundry Foundation, Chris Wright of Red Hat and analyst Rosalyn Roseboro. 

May 10, 2016: Lenovo‘s Highly-Available OpenStack Enterprise Cloud Platform Practice with EasyStack press release by EasyStack

BEIJING, May 10, 2016 /PRNewswire/ — In 2015, the Chinese IT superpower Lenovo chose EasyStack to build an OpenStack-based enterprise cloud platform to carry out their “Internet Strategy”. In six months, this platform has evolved into an enterprise-level OpenStack production environment of over 3000 cores with data growth peaking at 10TB/day. It is expected that by the end of 2016, 20% of the IT system will be migrated onto the Cloud.

OpenStack is the foundation for Cloud, and perhaps has matured in the overseas market. In China, OpenStack practices worthy of noticing often come from the relatively new category of Internet Companies. Though it has long been marketed as “enterprise-ready”, traditional industries still tend to hold back towards OpenStack. This article aims to turn this perception around by presenting an OpenStack practice from the Chinese IT Superpower Lenovo, detailing their journey of transformation in both the technology and business realms to a private cloud built upon OpenStack. Although OpenStack will still be largely a carrier for internet businesses, Lenovo plans to migrate 20% of its IT system onto the cloud before the end of 2016 – taking a much applauded step forward.

Be it the traditional PC or the cellphone, technology’s evolving fast amidst this move towards mobile and social networking, and the competition’s fierce. In response to rapidly changing market dynamics, the Lenovo Group made the move of going from being product-oriented to a user-oriented strategy that can only be supported by an agile, flexible and scalable enterprise-level cloud platform capable of rapid iterations. After thorough consideration and careful evaluation, Lenovo chose OpenStack as the basis for their enterprise cloud platform to carry out this “Internet Strategy”. After six months of practice, this platform has evolved into an enterprise-level OpenStack production environment of over 3000 cores with data growth peaking at 10TB/day. It’s expected that 20% of the IT system will be migrated onto the Cloud by the end of 2016.

Transformation and Picking the Right Cloud

In the past, internal IT at Lenovo has always been channel- and key client-oriented, with a traditional architecture consisting of IBM Power, AIX, PowerVM, DB2 and more recently, VMware virtualization. In the move towards becoming an Internet Company, such traditional architecture was far from being able to support the user and business volume brought by the B2C model. Cost-wise, Lenovo’s large-scale deployment of commercial solutions were reliable but complex to scale and extremely expensive.

Also, this traditional IT architecture was inadequate in terms of operational efficiency, security and compliance and unable to support Lenovo’s transition towards eCommerce and mobile business. In 2015, Lenovo’s IT entered a stage of infrastructural re-vamp, in need of using a cloud computing platform to support new businesses.

To find the right makeup for the cloud platform, Lenovo performed meticulous analyses and comparisons on mainstream x86 virtualization technologies, private cloud platforms, and public cloud platforms. After evaluating stability, usability, openness and ecosystem vitality and comprehensiveness, Lenovo deemed the OpenStack cloud platform technology able to fulfill its enterprise needs and decided to use OpenStack as the infrastructural cloud platform supporting their constant businesses innovations.

Disaster recovery plans on virtual machines, cloud hard drives and databases were considered early on into the OpenStack architectural design to ensure prompt switch over when needed to maintain business availability.

A Highly Available Architectural Design

On architectural logic, Lenovo’s Enterprise Cloud Platform managed infrastructures through a software-defined-environment, using x86 servers and 10GB network at the base layer, alongside internet-style monitoring and maintenance solutions, while employing the OpenStack platform to perform overall resource management.

To ensure high availability and improve the cloud platform’s system efficiency, Lenovo designed a physical architecture, and used capable servers with advanced configurations to make up the compute, storage network all-in-one, then using OpenStack to integrate into a single resource pool, placing compute nodes and storage nodes on the same physical node.

Two-way X3650 servers and four-way ThinkServer RQ940 server as backbones at the hardware layer. For every node there are five SSD hard drivers and 12 SAS hard drives to make up the storage module. SSD not only acts as the storage buffer, but also is the high performance storage resource pool, accessing the distributed storage through the VM to achieve high availability.

Lenovo had to resolve a number of problems and overcome numerous hurdles to elevate OpenStack to the enterprise-level.

Compute

Here, Lenovo utilized high-density virtual machine deployment. At the base is KVM virtualization technology, optimized in multiple way to maximize physical server performance, isolating CPU, Memory and other hardware resources under the compute-storage convergent architecture. The outcome is the ability to have over 50 VMs running smoothly and efficiently on every two-core CPU compute node.

In the cloud environment, it’s encouraged to achieve high availability through not hardware, but solutions. Yet still there are some traditional applications that hold certain requirements to a single host server. For such applications unable to achieve High Availability, Lenovo used Compute HA technology to achieve high availability on compute nodes, performing fault detection through various methods, migrating virtual machines on faulted physical machine to other available physical machines when needed. This entire process is automated, reducing as much as possible business disruptions caused by physical machine breakdowns.

Network

Network Isolation

Using different NIC, different switch or different VLAN to isolate various networks such as stand-alone OpenStack management networks, virtual production networks, storage networks, public networks, and PXE networks, so that interferences are avoided, increasing overall bandwidth and enabling better network control.

Multi-Public Network

Achieve network agility through multiple public networks to better manage security strategies. The Public Networks from Unicom, Telecom and at the office are some examples

Network and Optimization

Better integrate with the traditional data center network through the VLAN network model, then optimize its data package processing to achieve improved capability on network data pack process, bringing closer the virtual machine bandwidth to that of the physical network.

Dual Network Protocol Bundling and Multi Switch

Achieve high availability of physical networks through dual network protocol bundling to different switches.

Network Node HA

Achieve public network load balance, high availability and high performance through multiple network nodes, at which router-level Active/Standby methodology is used to achieve HA, which is ensured through independent network router monitoring services.

Storage

The Lenovo OpenStack Cloud Platform used Ceph as the unified storage backend, in which data storage for Glance image mirroring, Nova virtual machine system disc, and Cinder cloud hard drive are provided by Ceph RBD. Using Ceph’s Copy on Write function to revise OpenStack codes can deploy virtual machines within seconds.

With Ceph as the unified storage backend, its functionality is undoubtedly a key metric on whether the critical applications of an enterprise can be virtualized and cloud-ready. In a super-convergent deployment architecture where compute and storage run alongside each other, storage function optimization not only have to maximize storage capability, but also have to ensure the isolation between storage and compute resources to maintain system stability. For the IO stack below, Lenovo conducted bottom-up layer-by-layer optimization:

On the Networks

Open the Jumbo frame, improve data transfer efficiency while use 10Gb Ethernet to carry Ceph Cluster network traffics, improving the efficiency on Ceph data replication.

On Functionality

Leverage Solid State Disc as the Ceph OSD log to improve overall cluster IO functionality, to fulfill performance demands of critical businesses ( for example the eCommerce system’s database businesses, etc.) and achieve function-cost balance. SSD is known for its low power consumption, prompt response, high IOPS, and high throughput. In the Ceph log system, these are aligned to multithread access; using SSD to replace mechanical hard drives can fully unleash SSD’s trait of random access, rapid response and high IO throughput. Appropriately optimizing IO coordination strategy and further suit it to SSD and lower overall IO latency.

Purposeful Planning

Plan the number of Ceph OSD under the super-convergent node reasonably according to virtual machine density on the server, while assign in advance CPU and other memory resources. Cgroup, taskset and other tools can be used to perform resource isolation for QEMU-KVM and Ceph OSD

Parameter Tuning

Regarding parameter tuning for Ceph, performance can be effectively improved by fine-tuning parameters on FileStore’s default sequence, OSD’s OP thread and others. Additional tuning can be done through performing iteration test to find the most suitable parameter for the current hardware environment.

Data HA

Regarding data HA, besides existing OpenStack data protection measures, Lenovo has planned a comprehensive disaster recovery protocol for its three centers at two locations:

By employing exclusive low-latency fiber-optic cable, data can be simultaneously stored in local backup centers, and started asynchronously in long-distance centers, maximizing data security.

AD Integration

In addition, Lenovo has integrated its own business demands into the OpenStack enterprise cloud platform. As a mega company with tens of thousands of employees, AD activity logs are needed for authorization so that staffs won’t need to be individually set up user commands. Through customized development by part of the collaborator, Lenovo has successfully integrated AD functions into its OpenStack Enterprise Cloud Platform.

Overall Outcomes

Lenovo’s transformation towards being “internet-driven” was able to begin after the buildup of this OpenStack Enterprise Cloud Platform. eCommerce, Big Data and Analytics, IM, Online Mobile Phone Support and other internet based businesses, all supported by this cloud platform. Judging from feedback from the team, the Lenovo OpenStack Enterprise Cloud Platform is functioning as expected.

In the process of building up this OpenStack based enterprise cloud platform, Lenovo chose EasyStack, the leading Chinese OpenStack Company to provide professional implementation and consulting services, helping to build the initial platform, fostering a number of OpenStack experts. For Lenovo, community compatibility and continuous upgrade, as well as experiences in delivering services at the enterprise level are the main factors for consideration when choosing an OpenStack business partner.