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Managed private cloud cheaper than self-managed?

This article was last updated 2 years ago.

Outsourcing private cloud operations can significantly accelerate the private cloud deployment process. Although most organisations are successful with the initial roll-out of the cloud, many struggle to operate it effectively post-deployment. This is because private cloud platforms, such as OpenStack, are known to be complex. As a result, under certain circumstances, a fully managed OpenStack can even be a cheaper option than the self-managed one. We have recently published a webinar in which we demonstrated a detailed cost analysis of both options. We have also created an interactive TCO (total cost of ownership) calculator which anyone can use to play with the numbers.

But hold on a second. What is “managed OpenStack”? And how can it be cheaper than a self-managed one?

What is managed OpenStack?

Managed OpenStack is a service provided by various OpenStack vendors which allows organisations to outsource OpenStack operations to a service provider. It means that the service provider takes full responsibility for the operations of a customer’s OpenStack cloud. This includes lifecycle management, reconfigurations, maintenance and software integration. Fully-managed services for OpenStack not only help organisations to ensure the reliability of their cloud but also allow them to focus on the business value brought by OpenStack.

Why managed OpenStack?

OpenStack is known to be complex, especially when it comes to post-deployment operations. For example, OpenStack upgrades used to be so difficult that most vendors would never support them, offering only re-deployments instead. Organisations deploying OpenStack usually struggle with a lot of challenges when it comes to the maintenance of the cloud. These can include lack of knowledge, experience, human resources, time constraints and high risks associated with production-grade SLAs (service level agreements).

Managed services are a solution to this problem. By outsourcing OpenStack operations to a service provider, organisations can benefit from the knowledge and experience brought by a dedicated team of cloud experts. They also do not have to worry about human resources as humans are provided in the contract. Managed services allow organisations to fully transfer the risk associated with OpenStack operations. Finally, time constraints get relaxed too, as the deployed cloud can be moved into production immediately.

Why not self-managed?

Although many organisations struggle with OpenStack operations, the aforementioned challenges not always apply. Big enterprises usually already have dedicated operations teams. They can afford training their personnel, hiring dedicated, experienced people and taking the risk associated with production-grade SLAs. But is self-managed OpenStack an economical option? Let’s try to estimate it.

In order to provide 24*7 coverage of the cloud, organisations need approximately ten FTEs (full-time equivalents). Why ten? So the year has 365 days which is 8,760 hours. In turn, an FTE availability per year is around 1,776 hours (222 days). In order to provide production-grade SLAs at least two FTEs have to be available at the same time. Thus, in fact, there are 2 * 8,760 = 17,520 hours to cover while one FTEs can only cover 1,776 hours. Dividing the number of hours to cover by the number of hours covered by one FTE results in around ten FTEs.

Now assuming than an average global salary of cloud operations engineer is $74,156 it becomes evident that yearly operational cost is 10 * 74,156 = $741,560. This is a significant number. And it does not include support services for which extra charges apply. Obviously, those numbers may vary depending on the SLAs and an average salary of the operations team.

Canonical’s Managed OpenStack

In case organisations cannot afford to manage OpenStack by themselves, they should consider outsourcing OpenStack operations to a trusted managed service provider. Canonical is one such provider, offering managed services for OpenStack at the best possible price. When choosing Canonical’s Managed OpenStack option the cloud is designed, deployed and maintained by Canonical’s team of cloud experts. However, at any given time organisations can take control of their cloud back, avoiding additional costs and vendor lock-in.

So when is it more economical to go with Canonical’s Managed OpenStack than with the self-managed option? In order to answer this question, organisations should use the TCO calculator to evaluate yearly operational cost of Canonical-managed and self-managed options. Canonical offers managed services for OpenStack at the price of $4,275 per host. This makes the pricing model clear and fully predictable. Whenever it is cheaper to outsource OpenStack operations to a trusted service provider, organisations should always consider it as an option.

Learn more

Use the TCO calculator to check the cost of outsourcing operations of your cloud to Canonical.

Watch the webinar: ‘Hosted private cloud infrastructure: a cost analysis’.

Learn more about Canonical’ Managed OpenStack and Managed Kubernetes.

Contact us about managed services for private cloud.

What is OpenStack?

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