Microsoft Virtualization: Customer Solution Case Study

China Telecom Introduces Cloud Services Platform in Just Six Months

OverviewCountry or Region: People’s Republic of ChinaIndustry: Telecommunications—Hosting

Customer ProfileChina Telecommunications Corporation is a state-owned telecommunications company that has 194 million fixed-line telephone subscribers, 62 million mobile subscribers, and 62 million broadband customers.

Business SituationChina Telecom decided to build data centers from which it could offer a range of hosting services. It wanted to contain costs while adding the flexibility to meet changing customer needs.

SolutionChina Telecom had subsidiary Shanghai Telecom build a test cloud computing data center using Microsoft software, including Windows Server 2008 R2 and Microsoft System Center data center solutions.

Benefits Six-month time-to-market New business growth Greater flexibility to meet customer

needs Lower costs

“By using Microsoft software, we were able to get our [Internet Data Center] up and running in just six months, half the time it would have taken us using competing technologies.”

Shang, Yanming, Product Manager, New Business Development Center, IT Department, Shanghai Branch, China Telecommunications Corporation

China Telecommunications Corporation (China Telecom) is one of the largest telecommunications companies in the People’s Republic of China. To expand its hosting business, China Telecom built an Internet data center (IDC) at subsidiary Shanghai Telecom to determine the best infrastructure for creating flexible cloud computing services. China Telecom built the IDC using the Windows Server 2008 R2 operating system with Hyper-V technology and Microsoft System Center data center solutions. By using Microsoft software, China Telecom got its first IDC up and running in just six months—half the time it would have taken using VMware—and realized significantly lower costs. By offering dynamically configurable cloud resources, China Telecom can meet a wider range of customer needs and greatly expand its hosting business.

SituationChina Telecommunications Corporation (China Telecom) is a large state-owned telecommunications operator in China that provides fixed-line telephone, mobile phone service, Internet connectivity, and applications services. China Telecom has total assets of CNY632.2 billion (U.S.$96.3 billion) and 670,000 employees.

The role of telecom operators is evolving and expanding to include voice and data traffic, entertainment channels such as movies and television, and IT services such as hosting business applications. China Telecom has been at the forefront of this transformation. However, as it expanded its hosting services, it grappled with how to expand IT services and revenues and create a flexible, dynamic infrastructure while containing costs. Competition in the expanding Chinese telecommunications market is stiff, and China Telecom wanted to make the right strategic decisions to survive and thrive.

China Telecom decided to make use of its existing Internet communications lines and broadband resources to set up Internet data centers (IDCs) from which it could provide commercial and government users with server colocation and leasing services. By taking advantage of IDC server colocation services, commercial and government organizations could satisfy many of their IT needs without setting up their own dedicated data centers or investing in expensive communications lines.

However, building an IDC infrastructure across China would be an expensive proposition. Each would need to be

equipped with hundreds of servers and accompanying storage, memory, network switches, and other hardware components, as well as licensing for server operating systems, databases, and application software. Costs for customers could also be high if customers ran their applications on dedicated servers and needed to pay China Telecom monthly leasing costs regardless of whether they were using the servers. China Telecom also needed to figure out how to administer such a sprawling infrastructure—onboarding new customers and changing or cancelling services for perhaps millions of customers.

SolutionChina Telecom decided to create several test IDCs where it could evaluate various hardware and software configurations and arrive at the most flexible and cost-effective design. It selected Shanghai Telecom, one of its largest subsidiaries, to test the concept of cloud computing—using virtualized computing and storage resources in a central data center to deliver dynamically configured IT resources to users over the Internet.

Shanghai Telecom provides voice, data, Internet, and Internet Protocol television (IPTV) services to more than 16 million people in and around Shanghai. Shanghai has the largest number of fixed telephone lines and broadband and IPTV users, and the highest international communications traffic of any city in the country. By creating a pilot program at Shanghai Telecom, China Telecom could gain real-world experience on which to base future strategic decisions.

Cost-Effective Cloud Platform

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“We have experienced good collaboration with Microsoft in the past and decided that Microsoft had a complete suite of software for building enterprise cloud environments.”

Shang, Yanming, Product Manager, New Business Development Center, IT

Department, Shanghai Branch, China Telecommunications Corporation

Shanghai Telecom assumed all technical decisions for building the IDC and made the decision to use Microsoft software. “We have experienced good collaboration with Microsoft in the past and decided that Microsoft had a complete suite of software for building enterprise cloud environments,” says Shang Yanming, Product Manager in the New Business Development Center, IT Department, Shanghai Branch, China Telecom. “The Windows Server 2008 R2 operating system has Hyper-V virtualization technology built in and provided the best performance for the price of any virtualization solution on the market. Microsoft also provided us with an extensive range of examples of successful public clouds built with Microsoft software.” Hyper-V is a hypervisor built into the Windows Server 2008 operating system. Shanghai Telecom selected HP to provide implementation services.

A key requirement was that customers have convenient virtual machine leasing and use a browser-based, self-service portal to order and configure virtual resources. Another important requirement was that Shanghai Telecom administrators have management tools to dynamically meet customer demands, which could change at any time.

Based on these requirements and the engineering plans provided by Shanghai Telecom, technology experts at Microsoft China engaged in extensive communication, analysis, testing, and field surveys before recommending a dynamic cloud architecture. The solution combined the Windows Server 2008 R2 operating system with the Hyper-V virtualization

technology and Microsoft System Center data center solutions to create a shared resource pool of computing, memory, storage, and network bandwidth. Shanghai Telecom elected to deploy Windows Server 2008 R2 Enterprise, which provides four virtual machine licenses with the original host operating system license.

The Shanghai Telecom IDC currently contains 40 host computers, each capable of accommodating eight virtual machines. The host servers run Windows Server 2008 R2 Enterprise, and the virtual machines can run just about any operating system the customer needs. Shanghai Telecom customers currently run the Windows Server 2008, Windows Server 2003, and Linux operating systems.

Sophisticated Management ToolsShanghai Telecom takes advantage of Microsoft System Center data center solutions to monitor, manage, and back up its IDC cloud platform. It uses Microsoft System Center Virtual Machine Manager 2008 R2 to create virtual machines and to perform physical-to-virtual and virtual-to-virtual server migration. Through System Center Virtual Machine Manager, Shanghai Telecom can manage all physical and virtual servers in the IDC.

By combining that program with Microsoft System Center Operations Manager 2007 R2 for server monitoring, Shanghai Telecom technicians can preemptively detect and address performance issues before they impact customer workloads. Shanghai Telecom also uses Microsoft System Center Data Protection Manager 2010, to automatically back up workloads on both physical and virtual servers.

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“The Windows Server 2008 R2 operating system has Hyper-V virtualization technology built in and provided the best performance for the price of any virtualization solution on the market.”

Shang, Yanming, Product Manager, New Business Development Center, IT

Department, Shanghai Branch, China Telecommunications Corporation

Guidance and Best PracticesAdditionally, Shanghai Telecom used the Microsoft Dynamic Data Center Toolkit for Hosters, a solution available as a no-charge download from Microsoft that contains guidance, sample code, best practices, and collateral to help hosting providers rapidly build and release managed services powered by the Windows Server 2008 Hyper-V technology and System Center programs. It also contains marketing guidance to help hosters market and sell managed services and solutions.

“Using the Dynamic Data Center Toolkit significantly sped up the work of getting the IDC up and running,” says Shang. “I would say that it probably cut our work in half.”

Self-Service PortalUsing the Dynamic Data Center Toolkit, Shanghai Telecom created a self-service portal that customers can use to order and manage their IDC resources from any web browser. A simple, user-friendly interface offers the customer options for setting up user accounts and access privileges, creating and sizing virtual machines and storage, backing up files, selecting and licensing specific software programs, and more. They can even manage VMware ESX–based virtual machines from the portal if customers desire that hypervisor software.

Behind the scenes, System Center Virtual Machine Manager implements user selections and dynamically configures storage, computing, and network resources, while giving customers real-time insight into the CPU utilization, storage capacity, and broadband resources related to their

workload. If a customer’s application suddenly requires more performance, Shanghai Telecom can automatically increase CPU and memory allocation or send an email to the customer so that they can increase the allocation themselves.

BenefitsUsing Microsoft software and cloud services, China Telecom created an IDC in just six months. It now has a platform for offering a range of new services and enormous flexibility for dynamically adjusting to customer needs. Additionally, China Telecom reduced costs by using Microsoft software to build its IDC.

Rapid Time-to-Market with Cloud ServicesBy constructing the Shanghai Telecom IDC using Microsoft virtualization and data center software, China Telecom was able to get to market quickly with new cloud services. “By using Microsoft software, we were able to get our IDC up and running in just six months, half the time it would have taken us using competing technologies,” says Shang.

New Business GrowthThe Shanghai Telecom IDC has been deemed a success, and China Telecom plans to expand that data center and then construct additional IDCs across China. China Telecom will take advantage of the enormous brand recognition that Microsoft has in China to expand the market for cloud computing services. “Microsoft has made substantial investments in both SaaS [software-as-a-service] and PaaS [platform-as-a-service] computing,” says Shang. “We will gradually expand our IaaS

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“Because the virtualization hypervisor is built into Windows Server 2008 R2 … and because we can use System Center [programs] to manage both physical and virtual servers in the same way, we have reduced our maintenance and operating costs.”

Shang, Yanming, Product Manager, New Business Development Center, IT

Department, Shanghai Branch, China Telecommunications Corporation

[infrastructure-as-a-service] services to the PaaS platform level and SaaS software level, which will guide China Telecom into the multifaceted cloud computing era. We will continue our strategic partnership with Microsoft long into the future.”

Microsoft is also providing advertising support to Shanghai Telecom to help the company promote its cloud computing and IDC services in Shanghai. “Cloud computing services are still new to most businesses and consumers, who need to better understand their benefits,” says Shang. “Shanghai Telecom is the first telecom operator in China to set up a cloud IDC, and our experience will be a valuable reference for other China Telecom operators at the provincial level.”

Using its cloud IDC platform to integrate existing telecom networks and service capacities ensures that China Telecom customers will gain maximum use from their existing investments. “With our cloud platform, we can offer mature, effective, and secure IT environments to all sizes and types of companies,” says Shang.

Greater Flexibility to Meet Customer NeedsWith its dynamically configurable IDC, China Telecom is able to make its data center resources go much further and respond to customer needs much faster. Instead of assigning customer workloads to a fixed number of dedicated physical servers, which are often underutilized, China Telecom can dynamically allocate virtual resources as needed. If a customer workload spikes, China Telecom can add more CPUs and memory within minutes—

and remove them just as quickly when the workload diminishes.

Also, while most China Telecom IDC customers run their workloads on the Windows Server operating system, several use the UNIX and Linux operating systems. With Hyper-V, customers can run just about any operating system in a virtual machine. “Microsoft is undoubtedly the best provider of management solutions for its own operating systems, but Microsoft also has strategic alliances with UNIX and Linux firms such as Red Hat and Novell,” says Shang. “This allows Microsoft to provide a caliber of management and support for Linux that is on a par with that for its own operating systems. This is beneficial to our IDC users who wish to utilize cloud data services more conveniently and quickly.”

Lower CostsBy using Hyper-V, China Telecom significantly reduced software licensing costs over what it would have spent on the leading competitor, VMware ESX Server. “Because the virtualization hypervisor is built into Windows Server 2008 R2, because of the attractive licensing terms of the Enterprise edition, and because we can use System Center [programs] to manage both physical and virtual servers in the same way, we have reduced our maintenance and operating costs,” says Shang.

Lower IDC costs mean lower cost of cloud computing services to China Telecom customers. Cost-effective pricing helps China Telecom be more competitive in the highly competitive Chinese hosting market.

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“Microsoft also has strategic alliances with UNIX and Linux firms such as Red Hat and Novell. This allows Microsoft to provide a caliber of management and support for Linux that is on a par with that for its own operating systems.”

Shang, Yanming, Product Manager, New Business Development Center, IT

Department, Shanghai Branch, China Telecommunications Corporation

Microsoft VirtualizationMicrosoft virtualization is an end-to-end strategy that can profoundly affect nearly every aspect of the IT infrastructure management lifecycle. It can drive greater efficiencies, flexibility, and cost effectiveness throughout your organization. From accelerating application deployments; to ensuring systems, applications, and data are always available; to taking the hassle out of rebuilding and shutting down servers and desktops for testing and development; to reducing risk, slashing costs, and improving the agility of your entire environment—virtualization has the power to transform your infrastructure, from the data center to the desktop.

For more information about Microsoft virtualization solutions, go to: www.microsoft.com/virtualization

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

For more information about China Telecommunications Corporation products and services, visit the website at: http://sh.ct10000.com/ywjs/biz/product/internet/hlwyy/917.html

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

Document published April 2011

Software and Services Microsoft Server Product Portfolio− Windows Server 2008 R2 Enterprise− Microsoft System Center Data

Protection Manager 2010− Microsoft System Center Operations

Manager 2007 R2− Microsoft System Center Virtual

Machine Manager 2008 R2

Technologies− Hyper-V

Solutions− Microsoft Dynamic Data Center Toolkit

for Hosters

Hardware 40 HP DL460 blade servers