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Migrating from VMware to an open-source private cloud in financial services

Kris Sharma

on 10 August 2022

Photo by Adeolu Eletu on Unsplash

This is part one of a two part blog series on open source based private cloud for financial services. This blog describes the need for a cost-effective private cloud to execute a successful hybrid cloud strategy. It also shares a comparison between proprietary and open source based private cloud platforms. In the second part, we will elaborate on the key considerations that financial institutions need to think about when planning to migrate to open source based private cloud platforms, along with the operational benefits of Charmed OpenStack for financial institutions.

To drive business agility, financial institutions are on a journey to fundamentally reshape their IT infrastructure. As their IT estates grow and become more complex, financial institutions are increasingly facing the challenge to optimise their infrastructure spend. Many financial institutions are adopting scalable and agile cloud infrastructure guided by a hybrid multi-cloud strategy.

What is a hybrid multi-cloud strategy?

Moving application workloads to the public cloud(s) transforms all expenses into operating expenses, providing cost flexibility. Yet, it leaves reasonable questions about data security, sovereignty and control. On the other hand, a private cloud build needs capital investment in hardware and a data centre, but allows financial institutions to retain complete control over the IT infrastructure and get fast, unconditional access to the data. A hybrid multi-cloud combines the best of both worlds. 

Hybrid clouds allow companies to use a combination of public and private clouds for their solutions. A hybrid multi-cloud exists when the organisation uses more than one public cloud vendor alongside a private cloud. 

Financial institutions will need to use the right mix of these cloud services to maximise application performance while on-boarding innovative new capabilities. How can organisations achieve this cost-benefit balance?

Cost-effective private cloud – The key to a successful hybrid cloud strategy

To optimise their CapEx and OpEx costs, financial institutions need to use cost-effective open-source private cloud infrastructure and place workloads on public clouds with considerations for application performance, security and compliance economics and consumption model.

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

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. 

VMware’s vRealize Suite is a hybrid cloud management platform that allows organisations to manage hybrid cloud.  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.

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, like OpenStack, provide an alternative solution for building and managing cloud infrastructure economically and at scale.

Open-source private cloud with OpenStack

OpenStack is the de-facto standard for open-source private cloud builds. 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).

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). 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, which enables efficient resource pooling, elastic scalability and self-service provisioning for end users.

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. Canonical solves this problem with automation that decouples architectural choices from the operations codebase that supports upgrades, scaling, integration and bare metal provisioning. For organisations looking for a well-supported OpenStack distribution, Canonical delivers Charmed OpenStack, which uses automation and leverages model-driven operations from bare metal to the cloud control plane. 

Charmed OpenStack

Charmed OpenStack is an enterprise grade OpenStack distribution engineered for the best price-performance. It leverages MAAS, Juju, and OpenStack Charms to automate and simplify the deployment and management of an OpenStack cloud. Together with Ubuntu, it meets the highest security, stability and quality standards in the industry.

Charmed OpenStack reduces overall TCO compared to VMware while enhancing infrastructure efficiencies, processes and productivity. Charmed OpenStack is a future-proof way forward for financial institutions. It provides a robust, highly available infrastructure platform for running critical business applications at reduced cost.

Summary

When looking to reduce their TCO, many financial institutions will consider a hybrid, multi-cloud strategy. But this strategy itself can be costly if the proper trade-offs and considerations are not taken to allocate private and public cloud workloads across vendors. A solution many financial services consider is migrating from proprietary technologies to open-source private clouds.

Photo by Pars Sahin on Unsplash

Migrating from VMware to OpenStack can have significant economic benefits for any financial institution and improve infrastructure flexibility.  It is often a wise choice to gain business agility and drive innovation while lowering costs.  But to move towards OpenStack, organisations must ensure they select a distribution that is easily deployable, maintainable, upgradable and cost effective. In order to provide a frictionless open source private cloud infrastructure to financial institutions, Canonical offers fully managed services so that financial institutions can focus on building innovative applications and not worry about infrastructure build and maintenance. 

In the next part of this series, we will discuss the key considerations that financial institutions need to take into account when planning to migrate to open-source private cloud platforms.

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