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Success with Hybrid Cloud: Saving Time & Money with a Hybrid Cloud
Published Sep 07 2018 11:01 PM 749 Views
Iron Contributor
First published on CloudBlogs on Jan, 20 2014

Over the course of this Success with Hybrid Cloud series we’ve covered the structure behind a hybrid environment and the best practices to plan , build , deploy , and operate one. For any organization, the Hybrid Cloud effectively combines an enterprise’s on-premises infrastructure with that of cloud service provider infrastructure and the public cloud to create the extended compute, storage, and network infrastructure for the enterprise.

A Hybrid Cloud allows an enterprise to compliment on-premises capacity with cloud infrastructure services on an as-needed basis. Because of the elasticity provided by cloud services, the hybrid cloud model offers a high degree of flexibility to enterprises who need to add capacity yet maintain certain resources on-premises for compliance, licensing, or other purposes. The popularity of a Hybrid environment as the go-to IaaS strategy for enterprises is already high , and I expect that popularity to continue growing.

It is really important to understand the capabilities you are going to use as you stretch your datacenter infrastructure to use external cloud capacity. Simply put: All clouds are not created equal. With this in mind, I think it is valuable to talk about the work we have done in Windows Server and System Center to enable Hybrid Clouds, and then compare this to what others have done in the market. I’ll also put some financial numbers alongside these technical details to demonstrate why we think using Microsoft for your Hybrid Cloud solution provides something really powerful at a really economical price.

In this post, I’ll examine the benefits of a Hybrid environment for Networking , Storage , and Compute .

Hybrid Networking

Hybrid networking refers to the capabilities that extend an enterprise’s on-premises network seamlessly to the cloud. Hybrid networking enables enterprises to easily move their VMs (and workloads) from the on-premises network to the cloud and back while maintaining IP addresses and other networking policies. With hybrid networking, an enterprise administrator can treat their composite network – spanning enterprise-cloud boundaries – as one extended network for placing compute and storage resources.

Hybrid networking in Windows Server and Systems Center 2012 R2 was described in detail in an earlier post , and a key capability is the multitenant site-to-site (S2S) VPN gateway that can support S2S connections from multiple customers, thus eliminating the need to deploy separate gateways for each customer. The gateway also supports VPN and Internet access (see graphic below).

In the 2012 R2 release, a single pair of multitenant S2S gateways (in 1+1 failover configuration) can support up to 200 S2S connections with aggregate throughput of up to 1.5 Gbps, and each such connection could potentially belong to a distinct customer. This is a significant architectural detail to understand: Whether you are a service provider, or an enterprise that needs to offers secure and isolated networking to your tenants, the architecture of your multi-tenant gateway will have a huge impact on your costs.

The following table shows the cost savings for the service provider when the multitenant gateway supports just 15 tenant connections (with average throughput of up to 100 Mbps each).

  • The second column here represents traditional S2S connectivity deployed by service providers, whereby a single pair of S2S gateway VMs per tenant is deployed.
  • The third column depicts the computations using a pair of WS 2012 R2 multitenant gateways.
  • The last column describes the case wherein the customer deploys a virtualized function in Amazon Web Services (AWS) – implemented using the Vyatta virtual router/firewall – to realize S2S connectivity for constructing his virtual private cloud.

Cost of traditional S2S GW solution – 2 VMs per tenant

Cost of 2012 R2 multitenant S2S GW solution – 2 VMs

AWS Vyatta solution

Cost of  S2S GW VM per hour

6 cents

6 cents

36 cents

Cost per year (0.06*24*365)




Number of VMs required to support one connection each from 15 customers




Cost of VMs for  15 customers per year




The hourly VM cost figures in the second and third columns are representational, based on Azure service rates. Other service provider tariffs may be substituted in these columns, but the cost advantage of the 2012 R2 multitenant GW is clear. This cost advantage holds as long as the S2S throughput requirement of an individual customer is significantly less than the aggregate throughput capability of the S2S gateway (allowing effective multiplexing), which is true for the typical business customer. The cost savings to the service provider will translate to cheaper connectivity for customers in building their hybrid cloud.

Another area for cost savings for the service provider is the IP Address Management (IPAM) capability that ships with Windows Server 2012 R2.

With the R2 release, IPAM implements several major enhancements:

  • Unified IP address space management of physical and virtual networks through tight integration with SCVMM.
  • Granular and customizable role-based access control and delegated administration across multiple datacenters.
  • Single console monitoring and management of DHCP and DNS services across datacenters – in particular, the administration of DHCP failover, DHCP policies, and filters.
  • Complete PowerShell support for integration with automation workflows; and support for SQL Server as IPAM data store.

The use of IPAM in a hoster datacenter is depicted in the previous graphic.

IPAM automates tasks that otherwise require expensive and inherently unreliable manual effort, including management of physical and tenant address spaces, sequential update and management of DHCP and DNS services, and implementation of provisioning and monitoring workflows. In a virtualized cloud environment, IPAM is key to ensuring the agility promised by virtualization – new VM instances can be quickly created and deployed without IP address assignment, DHCP and DNS updates becoming bottlenecks. IPAM thus saves time, provides visibility into the network state, and saves cost for the operator.

To answer your next question, ROI analysis and various estimates on the cost savings of IPAM does exist, including projections that IPAM eliminates hundreds of person-hours of operations time per year, and saves thousands of dollars in operations cost.

Finally, the 2012 R2 hybrid networking solution is managed through Systems Center Virtual Machine Manager , and service providers can set up a Windows Azure Pack (WAP)-based self-service portal for customers to create and monitor S2S connections.

These Network features save time for business customers by creating new capacity. Rather than taking days or weeks to set up, a customer can self-provision the infrastructure in minutes in the service provider cloud and connect it back to his premises facilities seamlessly.

Hybrid Cloud Storage

Data is one of the most important assets a business has, but the exponential growth of this data has made it increasingly difficult to manage. Organizations all over the world have faced this simple fact: Storage, the technology for holding and protecting data, must evolve in order to keep up with data growth and the access requirements mandated by legal and regulatory compliance. It’s clear that greater efficiencies and tighter automation are going to be needed moving forward.

Hybrid Cloud Storage is a breakthrough technology that integrates on-premises storage systems with cloud storage services. Our recently released Windows Azure Backup Service provides a way for our customers to automate their nightly backup processes using Windows Azure Storage as the location for storing that backup data. This means that data no longer has to occupy on-premises storage and it frees storage administrators from the time-consuming and error-prone tasks of running and managing backups. If there had been Hybrid Cloud Storage decades ago, customers wouldn’t have had to manage tapes and offsite storage all these years!

But Hybrid Cloud Storage can be much more than backup automation – it can also provide uninterrupted, continuous capacity expansion for on-premises systems and applications without consuming additional on-premises storage or data center resources. I recently wrote about the anniversary of our StorSimple acquisition and I identified several of the major successes we’ve had helping customers deal with the high cost of storage.

With storage, there is a universal use case that almost every company struggles with: Storing inactive data with a much lower total cost of ownership where it can be easily retrieved. Companies have many reasons to keep historical copies of data for long periods of time, but they don’t want to use expensive on-premises SAN capacity and the administrative overhead required to do it. Hybrid Cloud Storage with StorSimple automatically and transparently offloads inactive data to Windows Azure Storage where it is safely and securely stored – and can be retrieved quickly.

Consider a couple real-world examples:

AGC AusGroup is a manufacturing and construction services company in Australia and Southeast Asia that recently invested about $500,000 USD in two data center SANs. The problem they didn’t anticipate was that both SANs quickly filled up with inactive data and they were left needing expensive capacity upgrades. In addition to these unforeseen costs, their archiving software proved to be expensive and time-consuming to manage. Fortunately for them, this common predicament fell right into StorSimple’s sweet spot: Helping organizations avoid the cost of acquiring additional, expensive on-premises storage capacity. In AGC’s case, they were able to immediately postpone a $125,000 expenditure and they were able to save additional money by displacing their archiving software and reducing the capacity needed for the SharePoint implementation.

A similar scenario took place at Mulvanny G2 Architecture , with a slightly different twist. Having stored paper documents with an offsite records company for decades, they had hundreds of millions of historical documents – they wanted these records digitized and placed in indices. What they didn’t want to do was fill up their new high performance SAN storage with documents that had minimal performance requirements. Again, our StorSimple solution made the most sense, both for its ease of integration and the low cost of ownership. MulvannyG2 avoided spending $140,000 USD on yet another SAN and is on their way to eliminating the $50,000 annual cost of managing their documents offsite. They are also looking forward to improving their DR abilities using their StorSimple system and Windows Azure Storage.

Considering how much conversation there is in the industry around security, I want to emphasize the world-class structure we have in place to protect your data:  The data is encrypted before it leaves your datacenters, it is then encrypted again in transit, and it is encrypted again at rest in Azure. At every stage, you hold the keys – the keys never come to Microsoft – so you can take advantage of these incredible storage/backup/DR scenarios knowing your data is safe and secure.

These two examples show how customers get immediate budget relief by implementing the StorSimple and Windows Azure Hybrid Cloud Storage solution. But the financial benefits of Hybrid Cloud Storage extend far beyond their immediate impact; it is a solution that continues to generate user benefits throughout its lifecycle by offloading storage capacity to the cloud and automating the time consuming tasks of backup, arching, and DR preparation.

Hybrid Compute

The private cloud and public cloud each have their sweet spots and constraints in terms of optimizing for Compute.  By its very nature, when you implement a Hybrid Cloud approach you extend your degrees of freedom around these to allow you to achieve cost optimizations that are simply not achievable with an all-private or all-public strategy.

For example, most public cloud providers charge for network egress into and out of their network.  For applications with high egress requirements (especially to zone 2 regions, for example), implementing these in your private cloud can provide excellent cost savings. For applications with high storage requirements the cost of public cloud storage on Azure can be under 4 cents per GB per month – that is pretty tough to beat for redundant storage.

To achieve these cost savings it’s necessary to do an effective analysis of your workloads and understand their behaviors across the following measures:

  • Compute Size (# of procs and cores and RAM)
  • Compute Utilization (peak loads and annual utilization)
  • Storage requirements
  • Network egress by zone

With this analysis done, you can begin to understand the nature of your Compute needs – and with this understood, you can begin to address them accordingly. There are several important pieces of technology that address these needs, for example… ( how this tech addresses, why it is lower cost)

Here are some examples of where innovative companies have improved efficiencies in this regard:

  • United Airlines & Sika AG :  They leveraged their private cloud infrastructure across multiple datacenters to lower the cost of their DR solutions.
  • Trek Bicycle Corp provides a good example of the benefits of combining public cloud (Azure) IaaS to complement their existing datacenter solutions and reduce costs.

With this analysis done, you can begin to understand the nature of your Compute needs – and, with this understood, you can develop a hybrid strategy to address them accordingly.

The first step is to model the usage of the applications and services you provide back to the business.  For example, applications that are just used at month-end or quarter-end are good candidates for moving to the public cloud to capitalize on the bursting nature of these apps.

From a tooling perspective, System Center’s AppController provides IT with a single pane of glass to view VMs in your private cloud and Azure public cloud.

We have a growing number of hosting service providers in our Cloud OS Network (COSN) who are implementing the Windows Azure Pack (WAP) to provide an Azure consistent experience for you in their hosted clouds.  This approach allows you to consider compute cost savings based on your region’s service providers – as well as Azure and your own internal costs for compute.

Finally, there are value-added hybrid services that provide cost savings opportunities for innovative IT departments.  These include leveraging Azure backup, Hyper-V Replica, and Hyper-V Recovery Manager as vehicles for offloading expensive storage and disaster recovery solutions.


Whether you are a cloud service provider or an enterprise considering your Hybrid Cloud options, Microsoft offers a powerful solution can time and money – and lots of it.

These savings are realized across countless networking, storage, and compute scenarios, and the technologies described here are only going to become more efficient as we continue to refine and update these solutions.

To dig deeper into this topic, I recommend a few of the links I used as footnotes back in my “ What’s new in 2012 R2 ” post about Hybrid Networking :

  • Networking for Cloud Services in Windows Server 2012 R2
    In this video from TechEd Europe, session presenters cover the advances in core network infrastructure services (DNS, DHCP, and IPAM) in Windows Server 2012 R2, as well as how to implement these enhancements in private, public, and hybrid cloud environments.
  • Deep Dive on Hyper-V network virtualization in Windows Server 2012 R2
    In this video from TechEd North America, session presenters discuss how Hyper-V Network Virtualization is a key investment to enable workload mobility and SDN in the cloud.  This session includes a deep dive into how Hyper-V Network Virtualization works.  Also featured:  How Windows Server 2012 R2 makes it easier than ever to enable customers to move their workloads, and for hosters to improve flexibility/automation/control across any cloud.
  • How to design and configure networking in Microsoft VMM and Hyper-V
    In this session from TechEd North America, the presenters discuss the comprehensive set of options and configuration settings for networking provided by Hyper-V VMM.
  • Project MAT for Shift
    From the popular Building Clouds blog, this post is an update on the very well received VM Migration toolkit. And check out their very entertaining video, The Migrator .
  • What’s new in Windows Server 2012 R2 Networking
    In this session from TechEd North America, you can learn more about how Microsoft has taken what it has learned from its global network of datacenters and applied it to the development of Windows Server 2012 R2.  This session covers networking advancements, network infrastructure enhancements in IPAM, Secure Remote Access to better meet the needs of virtualized environments, and how we have advanced Software Defined Networking with in-box support for hybrid environments.
  • What's New in IPAM in Windows Server 2012 R2
    This technical overview covers role-based access control, virtual address space management, enhanced DHCP server management, external database support, upgrade/migration support, and enhanced Windows PowerShell support.
  • Hyper-V Extensible Switch Enhancements in Windows Server 2012 R2
    In this blog post, we detail the enhancements we have made to the Hyper-V extensible switch in Windows Server 2012 R2.
  • What’s new in System Center 2012 R2, Virtual Machine Manager
    This session from TechEd North America, presented by Vijay Tewari, discusses the new innovations in virtualization, storage, and networking.  Vijay discusses the new capabilities of System Center 2012 R2 Virtual Machine Manager that enable new scenarios for customers – as well as enhancements to existing scenarios.  Also discussed:  How to use SDN to bring agility into cloud-based environments, and storage enhancements that enable customers to easily deploy enterprise-grade workloads.
  • Test Lab Guide: Windows Server 2012 R2 Hyper-V Network Virtualization with System Center 2012...
    Technical guidance with instructions for how to create the Windows Server 2012 R2 Network Virtualization with System Center 2012 R2 Virtual Machine Manager (VMM) – using computers running Windows Server 2012 R2.
  • What's New in VMM in System Center 2012 R2
    This detailed overview covers enhancements to Networking, VM management, Storage, Services, and Infrastructure.
  • What’s New in Hyper-V Network Virtualization in R2
    In this blog post, we go into details on the new capabilities of Hyper-V Network Virtualization in Windows Server 2012 R2.
  • Network Virtualization Technical Details
    Cloud-based datacenters can provide many benefits such as improved scalability and better resource utilization. To realize these potential benefits requires a technology that fundamentally addresses the issues of multi-tenant scalability in a dynamic environment. Hyper-V Network Virtualization was designed to address these issues and also improve the operational efficiency of the datacenter.
  • Overview of Windows Azure Pack for Windows Server
    This in-depth white paper evaluates how Windows Azure pack has been built on a foundation of Windows Server and System Center to deliver an enterprise class, cost-effective solution for multi-tenant cloud infrastructures services. Service Providers and enterprise customers can build customizable solutions using industry standard hardware, broad application platform support and open technologies.
  • Evaluation Guide for System Center 2012 R2 and the Windows Azure Pack
    Documentation reviewing how to set up and test an evaluation environment for tenant and administrator portals.
  • Microsoft BGP Router configuration automation
    Featured here is a PowerShell script that provides an easy-to-use automated interface for the configuration of BGP Router on Routing and Remote Access Server (both in Multi-Tenant and Single-Tenant modes) on a Microsoft Windows Server 2012 R2 system.
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