Finserv IT Infrastructure

Migrating from VMware

to OpenStack
A path to drive business agility and innovation at lower costs

July 2022

Introduction
Business agility is a strategic imperative for financial services organisations to
better service customers while continuing to meet compliance and regulatory
demands. “However, on average, traditional financial services organisations
scorelow on business agility 1 as they have to deal with years of technical debt.
The IT landscape at many financial institutions is characterised by isolated
applications and services, data and resource silos, islands of management, many
proprietary technologies and vendor lock-in. This results in an interoperability
nightmare.

To drive business agility, financial institutions are on a journey to fundamentally

reshape their IT infrastructure by adopting scalable and agile cloud infrastructure
guided by hybrid multi-cloud strategy. As their IT estates grow and become more
complex, financial institutions are increasingly facing the challenge to optimise
their infrastructure spend. Financial institutions will need to use the right mix of
cloud services – a hybrid cloud strategy to maximise application performance
while on-boarding innovative new capabilities. A hybrid cloud provides
orchestration, management, and application portability between public and
private clouds to create a single, flexible, optimal cloud infrastructure for running
a financial institution’s computing workloads.

This white paper presents a comparison between VMware’s virtualisation

platform and Charmed OpenStack, the role of a cost-effective private cloud in
executing FinServs’ hybrid cloud strategy, along with key considerations that
organisations need to take into account when planning migration to OpenStack.
It also provides an analysis of a typical financial organisation with a medium to
large-sized estate of VMs and physical machines, and highlights how
migrating from VMware to OpenStack can result in substantial cost savings
with Charmed OpenStack.

1. https://www.accenture.com/_acnmedia/accenture/pdf-43/accenture-enterprise-agility-web.pdf
 Cost effective private cloud - The key to
successful hybrid cloud strategy
Using cost effective open source private cloud infrastructure and placing
workloads on public clouds with considerations for application performance,
security and compliance, economics and consumption model allows financial
institutions to optimise their CapEx and OpEx costs.

On the private cloud front, one strategy that financial institutions can adopt to
reduce infrastructure costs is to move away from expensive proprietary
technologies to open-source platforms. This allows organisations to not only rein
in costs, but also to gain more control over their infrastructure.

OpenStack is the de-facto standard for open source private cloud build.
OpenStack sits at the centre of the open-source infrastructure stack, providing an
interface for the virtualisation stack, Software Defined Networking (SDN), and
Software Defined Storage (SDS) . It allows provisioning Virtual Machines (VMs)
on-demand from the self-service portal and allocates the required resources
through the underlying platforms - all managed and provisioned through
application programming interfaces (APIs) with common authentication
mechanisms.

Beyond standard infrastructure-as-a-service functionality, OpenStack provides

additional open-source components for orchestration, fault management and
service management, amongst other services, to ensure high availability of
enterprise applications.

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 Comparing VMware and Charmed OpenStack
The economics of utilising proprietary software vendors for private cloud
management is one of the key factors that triggers financial institutions to
explore other options that are more cost-effective in the long run. Open-source
technologies provide an alternative solution for building and managing cloud
infrastructure economically and at scale.

VMware
VMware’s vRealize Suite is an enterprise virtualisation platform. It supports
both virtual machines and containers, and comes in standard, advanced and
enterprise flavours.

vRealize Suite

VMware’s vRealize Suite is a hybrid cloud management platform. IT organisations

can address cloud management requirements across Day 1 and Day 2 operations
for compute, storage, network and application-level resources across private and
public clouds. vRealize Suite provides features like self-service and policy-based
infrastructure and application provisioning and management. It also provides a
lifecycle manager, log analytics, performance and capacity management.

Challenges

When financial institutions began exploring options to reduce the Total Cost of
Ownership (TCO) by shifting from monolithic legacy systems to virtualised
infrastructure, VMware was the most commonly-used platform available.

However, many financial institutions started seeing their TCO inflate over time
due to the nature of VMware’s CPU licensing and support model, which is CPU-
based.

OpenStack
OpenStack provides a complete ecosystem for building private clouds. Built from
multiple sub-projects as a modular system, OpenStack allows financial institutions
to build out a scalable private (or hybrid) cloud architecture that is based on open
standards. OpenStack enables application portability among private and public
clouds, allowing financial institutions to choose the best cloud for their
applications and workflows at any time, without lock-in. It can also be integrated
with a variety of key business systems such as Active Directory (AD) and
Lightweight Directory Access Protocol (LDAP).

Large financial institutions such as PayPal and Wells Fargo are using OpenStack
for their private cloud builds. These companies are successfully leveraging the
capabilities of OpenStack software that enables efficient resource pooling, elastic
scalability and self-service provisioning for end users.

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 Benefits

OpenStack software provides a solution for delivering infrastructure as a service

(IaaS) to end users through a web portal and a foundation for layering on
additional cloud management tools. These tools can be used to implement higher
levels of automation and to integrate analytics-driven management applications
for optimising cost, utilisation and service levels. OpenStack software provides
support for improving service levels across all workloads and for taking advantage
of the high availability capabilities built into cloud aware applications.

In the world of Open banking, the delivery of a financial application or digital

customer service often depends on many contributors from various organisations
working collaboratively to deliver results.

An open source technology solution like OpenStack gives users flexibility with
customisation capabilities, lock-in avoidance and broader developer
contributions. Proprietary cloud and virtualisation platforms, on the other hand,
tie financial institutions to vendors and come with recurring licensing fees which
can make it an expensive option.

Challenges

OpenStack is not just a simple plug-and-play technology. It is a complex

ecosystem that enables flexibility for application management and configuration.
Whilst this has its advantages, it can also make deployments and operations
complex, requiring OpenStack expertise. OpenStack and KVM hypervisor, for
example, come free of charge, but they require specific skills to configure them
which financial institutions may not have in-house. OpenStack upgrades, for
example, have become so arduous that many OpenStack vendors have
discontinued support - leaving customers with no option but to re-deploy.

Operational benefits of Charmed OpenStack for

financial institutions

Business intent driven

While there are many OpenStack distributions available, what

Charmed OpenStack differentiates Charmed OpenStack from others is the usage of
OpenStack Charms for OpenStack deployment and operations. By
Canonical’s Charmed OpenStack is an using a model-driven approach which focuses on what needs to be
enterprise grade OpenStack achieved, as opposed to concentrating on how it can be done,
distribution engineered for the best teams can simply define their ultimate requirements and let Juju
price-performance. It leverages MAAS, take care of the rest. Juju is the Charmed Operator Framework; an
Juju, and OpenStack Charms to open source framework that uses Charmed Operators, or ‘Charms’,
automate and simplify the deployment to deploy cloud infrastructure and applications and manage their
and management of an OpenStack operations from Day 0 through Day 2. With Juju, you can install,
cloud. Together with Ubuntu, it meets maintain, upgrade, and integrate applications across Kubernetes
the highest security, stability and clusters, containers, virtual machines, and bare metal machines, on
quality standards in the industry. public or private clouds. This enables teams to focus on leveraging
the business value brought by OpenStack rather than its
deployment and day-to-day operations.

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 Substrate agnostic

Charmed OpenStack uses MAAS for infrastructure provisioning and Juju for
application modelling. MAAS is an open source bare-metal server provisioning
tool that turns bare metal into an elastic, cloud-like resource. Along with
OpenStack, Kubernetes clusters can be deployed on top of OpenStack to
optimise performance and extend flexibility. Financial institutions can choose to
run their workloads inside virtual machines or containers.

Reduce hardware footprint

Charmed OpenStack can run compute, network and storage services on the
same shared hardware. This reduces hardware footprint and costs in both
purchasing and maintaining hardware. Using a hyper-converged architecture,
organisations can use the same hardware across the entire data centre and
benefit from a unified, distributed approach to infrastructure provisioning and
service orchestration.

Secure, compliant and hardened

Canonical provides up to ten years of security updates for Charmed OpenStack

under the UA-I subscription for customers who value stability above all else.
Moreover, the support package includes various EU and US regulatory compliance
options. Additional hardening tools and benchmarks ensure the highest level of
security.

Every OpenStack version supported

Each upstream OpenStack version comes with new features that may bring
measurable benefits to your business. Canonical provides full support for every
version of OpenStack within two weeks of the upstream release. Every two years,
Canonical releases a Long Term Support (LTS) version of Charmed OpenStack that
is supported for five years.

Upgrades included, fully automated

OpenStack upgrades can be resource intensive. By leveraging model-driven

architecture and using OpenStack Charms for automation purposes, Charmed
OpenStack can be easily upgraded allowing organisations to stay up to date
with the upstream features, while not putting additional pressure on the
operations team.

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 Migrating to OpenStack
Here are the key considerations that organisations need to think about when
planning to migrate to OpenStack:

• Economics – Choose the right OpenStack distribution that enables CapEx and
OpEx reduction

• Technology support – Ensure that various components of the technology stack

are supported

• Velocity of development and innovation – how quickly upstream features and

projects are adopted

• Day-N operations – how to efficiently operate OpenStack post-deployment

• Upgrades – how predictable the release cadence and upgrade path are.

To help financial services companies make the best decisions for their OpenStack
distribution, the following section covers how Charmed OpenStack helps
companies to meet these 5 challenges head on.

Consideration 1: Economics – reducing CapEx and OpEx

For any financial institution, infrastructure economics are pivotal. One of the key
reasons for OpenStack adoption is the cost benefit associated with a more
streamlined open infrastructure.

In the cost comparison scenario below, an organisation with a medium-sized

estate of VMs and physical machines can achieve substantial savings by migrating
away from VMware to Charmed OpenStack, and that is with consulting, training
and support services included.

It is important to mention that migrating from VMware to Openstack does not

always guarantee a cost reduction. This cost reduction can be ensured, however,
by choosing an OpenStack distribution that can be operated economically.

Charmed OpenStack is more economical than VMware vRealize and other

OpenStack distributions for three key reasons:

1. As OpenStack is an open source project, there are no licensing costs associated

with its usage.

2. While VMware uses a CPU based support and subscription model, Charmed
OpenStack uses a per-node support and subscription model, bringing the
operational costs down and adding pricing predictability.

3. Charmed OpenStack uses OpenStack Charms for its deployment and

operations which significantly simplifies the entire process, thus reducing CAPEX
and OPEX. The entire adoption process is reduced to just a few weeks, reducing
time to value. The operational overhead over the product lifetime is also reduced,
which again reduces OPEX and accelerates return on investment

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 VMware vs Charmed OpenStack cost comparison scenario

Consider 2,500 VMs and 50 physical machines with 4 CPUs per server. Building
Charmed OpenStack using Canonical’s Private Cloud Build professional services
package costs in the region of $75,000 to $150,000. The Ubuntu Advantage for
Infrastructure Advanced support package and training needs to be factored in at
$75,000 and $21,500 respectively. This results in $171,500 - $246,500 in total. In
turn, the same environment based on VMware vRealize results in $2,600,200.

This calculation uses VMware’s TCO comparison calculator.

VMware
Licenses $1,589,000 0

Professional Services $ 587,000 $ 75,000 - 150,000

Training $ 27,000 $ 21,500

Support Subscription $ 397,200 $ 75,000

Total $ 2,600,200 $ 171,500 - 246,500

Consideration 2: Technology support

No two businesses are the same. Technological choice enables financial
institutions to choose the solutions that best suit their needs.

With so many companies devoting resources to OpenStack, together with

Canonical’s own development efforts, Charmed OpenStack benefits from a wider
set of technology options than VMware and other OpenStack distributions. This is
particularly relevant in terms of Software Defined Networking (SDN) and storage
solutions, hypervisors and integration, and migration tools.

With VMware, for example, financial institutions can only use VMware NSX,
VMware’s SDN platform. Canonical, meanwhile, delivers Open Virtual Networks
(OVN) out of the box with Charmed Openstack, and users can integrate it with
other leading SDN platforms.

Consideration 3: Velocity of development

and innovation
With proprietary offerings like VMware, the speed of development and
innovation is dependent on the vendor, locking customers into their product
roadmap.

The diverse OpenStack community, on the other hand, is constantly innovating.

Financial institutions can stay at the cutting edge of technology with an open
source approach, which allows for accelerated development and lowered costs.

Canonical is a proud participant in the community of innovation around

OpenStack. For example, Canonical’s Microstack solves the problem of
small-form factor OpenStack. MicroStack provides an easy way to develop
and test OpenStack workloads on a workstation or VM.
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 anonical has built hundreds of OpenStack clouds, combining the best tools from
various open source projects results in the best possible cloud. Canonical’s
OpenStack reference architecture uses Ceph for storage, ELK for logging and
Nagios, and Prometheus for monitoring. Canonical also adopts upstream
OpenStack projects as soon as they get mature and production-ready.

Consideration 4: Enhancing Day N operations

(operational efficiencies post-deployment)
All organisations look to scale and reduce infrastructure complexity in a bid to
increase productivity. This can be achieved with automated, operational tooling
that enables quick deployments of private clouds.

OpenStack charms can significantly simplify application deployments and

accelerate daily operational tasks such as scaling out the OpenStack cluster
resulting in lower maintenance, less human resource requirements – and,
therefore, reduced Opex.

Juju is an open source application modelling tool utilised to model and build an
OpenStack cloud, reducing the deployment time from days to hours. By relying
on charms, Juju provides operations automation and service orchestration
capabilities.

In turn, charms, as outlined in the box out above, are

What is a charm? collections of scripts for deploying and operating software.
With event handling built in, they declare interfaces that fit
Charms encapsulate a single application and all charms for other services. This is the basis for forming
the code and know-how it takes to operate it, relationships. This drastically reduces the operational
such as how to combine and work with other complexity in environments consisting of various inter-
related applications or how to upgrade it. connected services, such as OpenStack.
Charms are programmed to understand a
single application, its operations, and its Charms simplify application deployment and management
potential to communicate or integrate with tasks, including automating complex operations such as
other applications. Charms are available for OpenStack upgrades.
hundreds of applications including Kubernetes,
Ceph and OpenStack. Canonical-maintained Charms are community vetted and open source. OpenStack
charms can be downloaded from Charmhub. charms are supported by the Canonical team.

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 Consideration 5: Predictable release cadence and
upgrade path
With a proprietary solution, financial institutions are tied to a specific vendor’s
release cadence and upgrade model, which can constrain business advancement
and innovation. An unpredictable upgrade path also makes it impossible for
financial institutions to plan their IT roadmap.

This is applicable to both VMware vRealize and OpenStack distributions on

the market.

Compared to other OpenStack distributions, Charmed OpenStack users benefit

from a highly predictable, transparent release cadence - outlined below.

• Every six months, there is an interim release of OpenStack that Canonical

supports for eighteen months.

• Every two years, there is a LTS version of OpenStack released which Canonical
supports for five years.

Canonical aligns with the OpenStack release cadence to provide a predictable

upgrade path for organisations through Ubuntu, upstream OpenStack and
OpenStack Charms.

Upgrading OpenStack can be difficult and time consuming without the right
expertise and tooling. Charms, however, are a solution for streamlined
OpenStack upgrades.

The OpenStack Charms project focuses on making OpenStack deployable,

maintainable and upgradable. By outsourcing the entire logic to charms,
Canonical’s Charmed OpenStack distribution provides full support for the
OpenStack upgrades.
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 Alignment with the OpenStack release cadence and the ease-of-upgrade
capability with charms takes the perceived complexity out of OpenStack
upgrades, serving as one of the key differentiators for Charmed OpenStack
compared to other distributions.

Helping you migrate to OpenStack

Charmed OpenStack - Consulting, Support and
Managed Services Financial institutions wanting to move from VMware to
Charmed OpenStack should put a carefully planned
As with most cloud computing platforms, migration strategy in place. This is something that Canonical
in-house teams will require an understanding can help with.
of OpenStack before and after it is deployed.
For migration, workloads should be ideally re-designed in a
OpenStack adoption is usually a complex cloud-native fashion based on a microservices architecture.
process. Some common mistakes made during This ensures high availability of services and native adoption
the design phase may result in a lot of re-work in the cloud environment. It is not a must, however, as the
during further phases. Although charms existing workloads can just be moved from one platform to
significantly simplify the deployment process, the other.
organisations still have to spend some time
learning Juju. For those who do not want to The OpenStack environment itself is built on another set of
go through the OpenStack adoption process servers or in a dedicated data centre. For a period of time,
on their own, Canonical provides the the two environments run in parallel so that testing can be
consulting services. A dedicated team of cloud carried out in an isolated environment before the migrated
experts will build the cloud for you. site is made primary. It also allows the financial institutions
to see how business applications will run on the new
But a successful deployment is just the platform before switching to it.
beginning of the journey. In order to assist its
customers with ongoing OpenStack
operations, Canonical offers a consolidated Conclusion
support offering for open source infrastructure
called Ubuntu Advantage for Infrastructure. It Migrating from VMware to OpenStack can have significant
comes in three different variants: essential, economic benefits for any financial institution and improve
standard and advanced and provides critical infrastructure flexibility. It is often a wise choice to gain
security patches, 24/7 support and production- business agility and drive innovation while lowering costs.
grade SLAs for maximum uptime and stability. But to move to an OpenStack distribution, organisations
UA Infrastructure covers not only OpenStack, must ensure they select a distribution that is easily
but also Kubernetes, Ceph and MAAS. deployable, maintainable, upgradable and cost effective.

FFor financial institutions that prefer to Charmed OpenStack reduces overall TCO compared to
outsource the entire operations process, VMware while enhancing infrastructure efficiencies,
Canonical provides a fully managed Charmed processes and productivity. Charmed OpenStack is a future-
OpenStack service, either hosted on-site or in a proof way forward for financial institutions. It provides a
Canonical data centre. All operational tasks are robust, highly available infrastructure platform for running
off-loaded to Canonical in what is a fully- critical business applications at reduced cost.
managed cloud. This provides financial
institutions access to Canonical’s team of
global experts and frees up their internal IT
teams to focus on core business objectives.

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 A case in point
SBI Group unlocks The client: SBI BITS
infrastructure
automation with SBI Group is Japan’s market-leading financial services company group
secure, on-premises headquartered in Tokyo. SBI BITS provides IT services and infrastructure to
OpenStack cloud SBI Group companies and affiliates.

The challenge

With hundreds of affiliate companies relying on it for IT services, SBI BITS – the
FinTech arm of SBI Group was under immense pressure to make its infrastructure
available simultaneously to numerous internal clients, often with critically short
time to market requirements. With SBI Group’s IT needs constantly increasing,
provisioning compute, storage, and networking resources quickly was a huge
challenge for SBI BITS.

After evaluating their existing suppliers, SBI BITS turned to Canonical to bring in
the external support and expertise required to move into production with an
economical, flexible solution.

The solution

Canonical designed and built the initial OpenStack deployment within a few
weeks, and is now providing ongoing maintenance through the Ubuntu
Advantage for Infrastructure enterprise support package. The initial
implementation consisted of 73 nodes each at two sites, deployed as hyper-
converged infrastructure and running Ubuntu 18.04. This architecture enables a
software-defined approach that unlocks greater automation and more efficient
resource utilisation, leading to significant cost savings.

The outcome

Canonical’s OpenStack deployment has streamlined the infrastructure delivery

ensuring that the company can meet the IT needs of SBI Group without the stress.
It is also proving to be highly cost-effective, both from CAPEX and OPEX
perspectives. Canonical delivered OpenStack at one third of the price of
competing proposals. Automation eliminates the majority of physical work
involved in resource provisioning. Since OpenStack is using the hardware more
efficiently, the upfront investment was very reasonable. At the same time,
Ubuntu Advantage for Infrastructure takes all the complexity out of maintenance
and troubleshooting – resulting in lower operating costs and empowering the
internal team to focus on the core business.

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 To learn more about how Canonical helps financial institutions drive
business agility and innovation at lower costs, visit our website.

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