Microsoft Server Virtualization and Management

versus OpenStack
Competitive Discussion Guide- June 2013
Introduction

IT Service Desk and Help

Desk

$1.2
billion

BMC, HP, CA

This discussion guide provides guidance for Microsoft field sales representatives to
discuss customer concerns about server and cloud environment management and how
solutions from Microsoft can help address those concerns. This document provides
information and facts to help field sales for competing effectively against Openstack
Data Center and Cloud Management solutions. Use this guide to:
Initiate sales conversations with technical decision makers (TDMs) and business
decision makers (BDMs) to identify sales opportunities.
Understand key messages and strategies for positioning Microsoft Hyper-V and
Microsoft System Center.
Sell Microsoft System Center against Openstack Cloud Management Solutions.

Job Scheduling & RBA

$1.0
billion

CA, IBM, BMC

Asset Management

$406
million

BMC, HP, IBM

2 | Competitor Overview: OpenStack in a Nutshell

OpenStack is a cloud operating system that controls large pools of compute,
storage, and networking resources throughout a datacenter, all managed through a
dashboard that gives administrators control while empowering their users to
provision resources through a web interface

Use this discussion guide in conversations with:

TDMs: Information Technology (IT) Administrators, IT Managers (IT Implementers),
VP of IT, Director of Technology, Director of IT, and Chief Architect
BDMs: President, CEO, Chairman, and COO

1 | The IT Operations Management market land escape

The IT operations management markets are fractured from both a product and a vendor
perspective. The stakes are high as traditional ITOM vendors like BMC face off
competitively with infrastructure vendors like Microsoft to consolidate market share.
The ITOM market is currently over $14 billion in size is made up of many sub segments and is
projected to grow at over 7% annually through 2014.

Of the nine ITOM market segments we track at Microsoft, the Big Four vendors (BMC
Software, CA Technologies, HP and IBM) represent the top three market share positions
in 24 out of 27 positions.
The Big Four vendors are more alike than different and investing in similar areas, such
as their integration architectures, cloud computing and in enabling real-time
infrastructure, as well as alternative delivery models such as software as a service
(SaaS). They are also investing in business management functionality, such as in IT
financial management and decision support.
2009
Segment

Top 3 Vendors

Configuration
Management

$2.7
billion

MSFT, IBM,
SYMC

Availability & Performance

$2.5
billion

IBM, HP, CA

DBMS Management

$1.7
billion

BMC, IBM,
Oracle

Application Management

$1.6
billion

CA, IBM, HP

Network Management

$1.5
billion

IBM, CA, HP

Availability and
Performance (Mainframe)

$1.2
billion

IBM, CA, BMC

ITOM Segment

2011 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Reality
OpenStack is probably not something that the average business
would consider deploying themselves yet.
- OpenStack Web Site

Microsoft Server

Hypervisor agnostic OpenStack on X, never stand

alone.
Exposes logical APIs to tenants, with operators.
Predictable, fast releases every 6 months:
o

Heat Application Orchestration compatible

with AWS CloudFormation (new in Grizzly)

Essex (older), Folsom (previous) ,Grizzly

(current), Havana (10/13)

Governed by the OpenStack Foundation, of which

VMware is a member.
Publicly backed by major HW/SW infrastructure
vendors and SPs:
RH, HP, IBM, Cisco, Dell, VMware, EMC, Intel,
Yahoo, RAX, AT&T, NTT
o
Not publicly supporting: Amazon, Oracle,
Google, Facebook
Over 600,000 lines of code (as of 10/2012) 178
companies and 3386 people
o

OpenStack has been heavily hyped, and its large

community of sponsoring vendors has done an
outstanding job of marketing it. It is an early-stage
product, which faces challenges of operational
maintainability. The bulk of early development has
been driven primarily by the needs of service
providers, although there are commercial distributions
aimed at enterprises. It is suitable principally for early
adopters with a high risk tolerance, that have
significant in-house resources or that intend to use
consultants to build and support commodity cloud
infrastructure.
Open source doesn't mean open standards, broad
interoperability, and reduced lock-in, freedom from
commercial interests, or eventual widespread
adoption.

Open Source framework for assembling an Amazonlike IaaS cloud from component technologies.
Founded in 2010 by Rackspace and NASA.
Collection of Different but Related Projects:
o
o
o
o
o
o
o
o

Nova Compute
Horizon Web-based Dashboard
Keystone Identity and User Management
Swift Object Storage
Glance Image Management Service
Cinder Block Storage
Quantum Virtual Networking
Ceilometer Monitoring and metering (new
in Grizzly)

Benefits and Risks

Open-source OpenStack provides three key benefits
that non-open-source vendors like Microsoft are
unlikely to provide:
Community support. Although not all open-source
projects attract a strong community, those that do can
provide a community of practice that can assist with
routine issues, recommend best practices and
collaborate on contributions back to the project.
Access to the source code to fix critical
problems. Organizations that expect to use a CMP in a
highly mission-critical manner for instance, a
service provider that expects to serve thousands or
even millions of customers via a cloud IaaS offering
built on top of a CMP may not want to rely on a
vendor to fix critical bugs in a timely manner. Access
to the source code ensures that if the organization has
the engineering expertise, it can address issues
without being subject to the vendor's timeline.
Community development. Open-source projects
allow widespread contributions, although some
communities achieve greater outside contributions
(beyond the core sponsoring vendor) than others.
They also foster decentralized and cooperative
innovation in a manner not readily achievable by other
kinds of commercial effort.

Organizational Profile: History

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

OpenStack roots evolved in two organizations in the

mid to late 2000s: NASA (The National Aeronautics and
Space Administration) and Rackspace (the large online
hosting company).
In the mid-2000s, Rackspace began offering some
limited cloud hosting products, and then in 2009
rewrote its cloud object storage product, Cloud Files.
This scalable object storage system, which came to be
known as Swift, OpenStack storage component, is
meant to resemble and compete with Amazons S3
storage product. Additionally, Rackspaces original
cloud computing product, Cloud Servers, was open
sourced in 2010.
The compute portion of OpenStack, on which we focus
more closely, originated in NASA in the 2008-2009
period, and was built to provide elastic and burstable
compute capacity for NASAs processing of extremely
large datasets from their space missions. NASA began
their cloud development (original NASA code name
Nebula) using software from Eucalyptus, a nowcommercial entity that was formerly open source but
followed an open core model. In early 2010, NASA
decided that Eucalyptus did not scale well for their
purposes, and attempted to submit code to Eucalyptus
to address the scaling problems. They found that
portions of their submissions conflicted with closed
portions of Eucalyptus code.9 NASA then broke from
Eucalyptus cooperation and rewrote the compute code
base from scratch using Python and a message
queuing model. This rewrite became known as Nova,
which is now the compute portion of OpenStack. The
contracting company inside NASA that developed the
majority of this code base was Anso Labs.
In June and July 2010, Rackspace and NASA joined
their open source storage (Swift) and compute (Nova)
efforts and formed a new initiative called OpenStack.
They invited technology partners to come onboard
with them to create additional tools, services, and
software to augment the new platform.
In 2011, OpenStack added an image management
module, called Glance, to their core projects, bringing
the total number of core modules to three.

OpenStack came full circle in early 2011, when

Rackspace, one of the original partners in the
OpenStack endeavor on the Swift side, acquired Anso
Labs, the former NASA contracting company which
wrote the Nova compute portion of OpenStack. This
acquisition, of essentially the original core Nova
development team, caused some concern in the open
source community that Rackspace was attempting to
control the development and direction of OpenStack,
rather than contribute to it. Rackspace is now using
that expertise to offer Rackspace Open Cloud Edition.
There were two releases of OpenStack in 2012, Essex
in April 2012 and Folsom in September 2012. Essex
added the Keystone (identity management) and
Horizon (UI) projects into the core OpenStack release.
Folsom broke off the block storage (nova-volumes)
function from Nova and launched it as its own
separate core project named Cinder. Folsom also
added the Quantum networking project to the core
release. OpenStack touts the key improvements in
Folsom of simplified installation and deployment,
virtualized and software defined networking,
significant improvements to Hyper-V functionality, and
security enhancements using Keystone.
The Grizzly release of OpenStack is slated for April
2013. Two projects are in incubation that will most
likely not be added to the core projects in time for this
release. The Heat project is an effort to simplify the
orchestration of large deployments by using AWS
CloudFormation templates.10 Ceilometer is a tool that
provides of metering cloud usage.
Microsoft launched a targeted effort following the
Essex release to add improved functionality and
support for Hyper-V back into OpenStack after it was
dropped in the Essex release. Their effort was
successful as Hyper-V was officially back in the Folsom
release with a larger set of supported features than
before.

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Myths
However, due to the current hype, there are also many
myths about OpenStack. The most dangerous myths
include the following:
Myth: Open source means an open standard,
and an open standard will dominate the
market. While a community process does mean that,
in theory, anyone can contribute to the development
of a standard, it does not mean that standard will be
free of commercial interests, or that it will gain
widespread adoption or be broadly supported. Do not
prematurely commit to an open-source cloud
management platforms (CMPs) "standard." Doing so
locks you into a particular vendor or ecosystem, with
no advantage to you, and, given the extremely
immature state of the CMP market, it can hinder your
future technology choices in severely disadvantageous
ways.
Myth: Open source will deliver faster innovation
and better capabilities than commercial
solutions. While Linux is often cited as an example of
how an open-source project displaced commercial
solutions, the commercial Unix variants that Linux
displaced were part of a mature, decades-old market.
In most technology markets, open-source solutions
have been successful but not dominant; in particular,
they are often successful at the low end of a market,
but not in the enterprise. A full-featured CMP is a
highly complex piece of software, and open-source
CMPs provides a minimalistic set of features compared
with commercial closed-source CMPs.
Myth: Open source means freedom from vendor
influence. While many open-source CMPs have their
roots in research projects, most have been
commercialized. Even if the open-source project itself
is in a foundation, open source is almost always a
business strategy for the vendors involved in a project.

OpenStack latest release Grizzly

Grizzly, the seventh major release of OpenStack, came
out in April 2013. This version fully
supports Hyper-v at the infrastructure layer (Not a
Microsoft Official statement)

Technology Providers
OpenStack broadly targeted at the general market,
with an initial feature set that emphasizes the needs of
service providers and others building large-scale
clouds. It uses a loosely coupled architecture of
components written in Python. It is hypervisorneutral, though KVM support is primary, Xen support
is good, and VMware and Hyper-V support is marginal.
AWS compatibility is controversial in
the OpenStack community, but it is likely to be
maintained, although this may be achieved through
connectors rather than natively
within OpenStack itself. It is in the early stages of
development, with a large community of supporting
vendors, and a foundation is being created for the
project; its key commercial sponsors include
Rackspace and HP, which are building cloud IaaS
offerings based on OpenStack, as well as Canonical,
Red Hat, Cloudscaling, Nebula and Piston Cloud
Computing, which are among the many vendors
offering commercial distributions. A free distribution
(including source code) is available under an Apache
license.

Core Projects
The initial and most important components are the
compute service, Nova (similar to Amazon EC2) and
the object-based storage service, Swift (similar to
Amazon S3). Complementary, loosely-coupled
components have been added over time, including
Quantum (network controller), Keystone (identity and
access management), Glance (VM image catalog) and
Horizon (self-service portal).

OpenStack Private Cloud Technologies

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

OpenStack Core Projects

Architecure

OpenStack Community Projects

Atlas-LB
The Atlas project will provide Load Balancing as a
Service or LBaaS for short. The goal is for load
balancing vendors to be able to write adapters to this
service for their technology.
Burrow
A messaging queue system for multi-tenant cloud use.
Burrow has a simple API and modular design.
Clanavi
Cloud management tool based on Drupal moduls for
supporting multiple clouds. Supported cloud
functionalities include server templates, clusters,
monitoring, billing, resource allocation, reliability,
scalability and more.

CloudGateway
A common interface used to manage multiple clouds
based on the RightScale gateway. Ultimately, the
Cloud Gateway should evolve into an interoperable
cloud standard.
CaaS
Cluster as a Service: Managing multiple clusters for
openstack clouds, Hadoop, and other diverse
frameworks.
Crowbar
A DevOps inspired cloud installation and maintenance
system that allows users to quickly deploy a fully
functioning OpenStack cloud.
Dashboard
The Dashboard for OpenStack is based on a Django
module called django-openstack. This project is
currently in core incubation.
Donabe
Donabe is a container service, a group of resources
created and/or managed as one unit, with an initial
focus on network containers.
Keystone
An identity service for use with OpenStack. Initially
using token-based authentication, but eventually
supporting plug-in modules for identity, protocols, and
necessary middleware to support integration with
OpenStack.
Lunr
An open commodity storage platform that will
integrate with the Nova Volume service.
Melange
Melange will provide network information services with
a focus on IP address management and address
discovery. Melange will be a standalone service with its
own API but fully integrate-able with Nova.
MultiClusterZones
A Nova deployment is called a Zone. Internal
deployment nuances, such as hostnames and service
information, are hidden to users outside of a Zone.
Zones may be joined together to form a hierarchy of
OpenStack services. This may be used to partition
OpenStack into geographical regions or business units.
A Zone may have the full suite of Nova services or can
be as simple as the API & Scheduler services. The
Distributed Scheduler provisions servers across Zones.
Quantum
A service providing network connectivity-as-a-service
for devices managed by other OpenStack services. It
exposes a generic and extensible API, allowing users
to build and manage their networks, and uses a
pluggable architecture, thus enabling different
technologies to implement the logical abstractions
exposed by the API.
RedDwarf

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

A scalable relational database service that allows

users to quickly and easily utilize the features of a
relational database without the burden of handling
complex administrative tasks. Cloud users and
database administrators can provision and manage
multiple database instances as needed. Initially, the
service will focus on providing resource isolation at
high performance while automating complex
administrative tasks including deployment,
configuration, patching, backups, restores, and
monitoring.
Topology
A topology service which is, being augmented by a
number of adapters, a primary way to provide a
solution for failure zones centered IaaS deployment.

Hypervisor feature support matrix

Feature

K
L
Bare Pow
QE
ESXi Hyp
XenServ
V
X
meta erV
MU
/VC er-V
er/XCP
M
C
l
M

Get Guest
Info

Get Host
Info

Glance
Integration

Service
Control

VLAN
Networking

*(7)

Flat
Networking

Security
Groups

*(9)

Firewall
Rules

Routing

nova
diagnostics

Config Drive

*(3)

Auto
configure
disk

Launch

Reboot

Terminate

Resize

Rescue

Pause

Un-pause

Suspend

Resume

Inject
Networking

*(1)(2)

*( *(1
1)
)

Inject File

*(6)

Serial
Console
Output

*(4)

VNC Console *(5)

SPICE
Console

Attach
Volume

Detach
Volume

Live
Migration

Snapshot

iSCSI

Set Admin
Pass

*(6)

*(7)

General Weakness

OpenStack remains less user friendly than System

Center Suite.
Installation is improved, but still requires manual
editing of configuration files in multiple locations and
multiple administrative restarts for all associated
services.
The available networking models offering advanced
functionality are difficult to configure and the available
documentation is insufficient for a mainstream
audience.
As in previous releases, the fragmented and userdriven nature of the open source documentation and
support resources leads to user confusion.
OpenStack HA remains less evolved than System
Center Hyper-v replica solution.
The Horizon dashboard does not use SSL by default
and provides only a subset of available networking
features.
Live migrations, while available, are not as
straightforward as in System center VMM and have a
documented risk of not completing correctly.
Due to the open source nature of this product,
businesses looking to deploy OpenStack in their
enterprise have very little support available other than
purchasing packaged releases with SLAs included from
third-party vendors.
The governance issues surrounding a large consortium
with many members may get in the way of producing
a viable product.
The MySQL database credentials are in each project
configuration file.

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

The remote console capabilities are weak compared to

App controller, such as no support for remote media.
12. Images must be prepared outside of OpenStack,
then bundled and uploaded.
13. The product has relatively frequent release cycles,
creating the need for frequent upgrades, patches, and
documentation updates.

Top Strengths

Capital costs the product is free and runs on

inexpensive commodity hardware.
Hyper-V integration is gaining traction in real-world use
cases.
The UI (Horizon) is more functional than in the prior
Diablo releases.
Keystone (identity management and authentication
component) is more tightly integrated than in the past.
The community and industry momentum behind the
product continue to intensify.
When properly configured, the scalability of the
product is impressive.
The licensing continues to encourage innovation and is
fueling a small startup cloud segment of the
technology industry.
Some management tools are EC2-compatible, which
provides developers with a familiar framework. Newer
modules may not include EC2 features and
compatibility.
For service providers with significant and appropriate
developers and staffing, the product may be attractive
from a cost/benefit standpoint.
OpenStack now offers advanced features like
virtualized networking via Quantum and integrated
identity management/security via Keystone.

Reality
Some people have been led to believe that
because OpenStack is open source, it is an open and
widely-adopted standard, with broad interoperability
and freedom from commercial interests.
In reality, OpenStack is dominated by commercial
interests, as it is a business strategy for the vendors
involved, not the effort of a community of altruistic
individual contributors. Some of the participants,
notably Rackspace and other service providers are
afraid of the growing dominance of AWS in the cloud
IaaS market and do not believe that they have the
ability to muster, on their own, the engineering
resources necessary to successfully compete with AWS
at scale, nor do they want to pay an ongoing license
fee for a commercial CMP like VMware's vCloud stack.
Both Rackspace and HP believe that OpenStack will
enable them to offer hybrid public/private cloud
solutions, if they can drive OpenStack penetration for
on-premises enterprise clouds. Others, like Piston
Cloud Computing, Nebula, and Cloudscaling, provide
commercial distributions of OpenStack, along with
professional services and support. Many are vendors,
such as Cisco, Citrix (see Note 2), Dell and Red Hat,
that want to ensure OpenStack works well with their
products, as well as limiting VMware's future market
power.

OpenStack has drawn a large vendor community,

which makes source code contributions, but many
exclusively contribute vendor-specific code, such as
drivers for their own hardware and resist the creation
of interoperability inducing common frameworks that
would facilitate switching between vendors. Vendor
interests also heavily affect the determination of what
features to add and how to implement them, since
every vendor wants each feature to work best with its
own products.
OpenStack is not an open standard, as it does not
provide for either interoperability or portability. It
does have an open community and anyone is welcome
to contribute to discussions and to contribute code.
The technical leadership is elected by contributors,
although most contributors are employees of the
sponsoring vendors and in practice, the technical
leadership has come from vendor employees. Voting
rights for its proposed foundation's governing board of
directors are largely controlled via vendor
sponsorships. The open community process, in
combination with closed-room discussions between
the sponsors, sometimes results in intense infighting
between the participants in the community,
particularly as Rackspace works to establish
the OpenStack foundation.
There are interoperability issues
between OpenStack versions, due to the nascent,
constantly-changing nature of the project, although
this is lessening as the project matures and
compatibility becomes a community priority. There are
also interoperability issues between distributions,
especially since commercial distributions
of OpenStack typically contain proprietary extensions,
which fragment commonality.
Additionally, as OpenStack is essentially a
framework for components and not a product,
some distributions even have completely different
components than the ones in the OpenStack core (for
example, the use of Ceph, another open-source
project, rather than Swift for storage) or may not
include certain components and associated
functionality at all. These differences between versions
and distributions extend to the API, making it more
difficult for third-party libraries and tools to reliably
support OpenStack. This lack of interoperability, even
within OpenStack, will also limit the future potential for
fully open, hybrid public-private or
federated OpenStack clouds; instead, hybrid or
federated clouds will likely require using specific
service providers and their specific supported
distributions.
Since the vendors involved want to drive business
through the OpenStack ecosystem, there is
considerable incentive for proprietary lock-in. There is
no significant difference in lock in for customers
adopting OpenStack than those customers adopting
proprietary CMPs. In fact, as OpenStack is not a
widely-adopted standard, the number of solution
providers is highly limited (whether in hardware,
software, or services), restricting overall customer
choice far more than adopting Microsoft System
Center Cloud.

Distributions and New OpenStack

Offerings

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

In our research, we found many examples of small and

large companies bundling, packaging, and offering
services based on the OpenStack core modules. These
include the following:

Rackspace
After purchasing Anso Labs, the original developers
of the Nova compute module at NASA, Rackspace
began offering Rackspace Private Cloud. This has
evolved into Rackspace Open Cloud, which includes
Public, Hybrid, and Private Cloud versions based on
OpenStack. Rackspace has been very active in the
OpenStack community and in adding new features to
its public cloud offering. Recent announcements have
introduced a cloud management application for
Windows 8, SSD storage offerings for higher
performance cloud block storage, SharePoint 2013
hosting,15 Rackspace Cloud Control Panel, and
Rackspace Service Registry, which is an interface for
automating application self-service delivery and
monitoring including service heartbeats.

HP

In May, 2011, Citrix announced, but had not yet

released, its own commercialized distribution, Project
Olympus a partnership with Dell, Rackspace, and
OpenStack. This partnership fell through and Citrix
actually moved to developing their own solution based
on the CloudStack open source project, which Citrix
donated to Apache after purchasing the IP for
CloudStack in their acquisition of Cloud.com in July
2011. Named Citrix CloudPlatform, their solution
includes integration with the Amazon EC2 API. Sameer
Dholakia, VP of the Citrix Cloud Platforms group stated
that Amazon is by far the largest and most successful
cloud in the world, by about an order of magnitude.
Removing focus from the Amazon API seemed like the
wrong strategy for Citrix. Also, Mr. Dholakia stated that
in their evaluation of the two products the CloudStack
platform was much more mature so they decided to
develop their code based on this platform. Citrix
CloudPlatform includes a Citrix-tested and -verified
version of Apache OpenCloud and a cloud-optimized
version of XenServer like the original Project Olympus
had intended. Citrix is still active in the OpenStack
community, but only in a limited capacity when
XenServer integration is involved.

HP launched their Cloud in June 2013, which included

HP Cloud Compute, HP Cloud Object Storage, and
content delivery network (CDN) functionality. HP has
had a great deal of turnover in their Cloud Services
division after multiple reorgs and CEO transitions. Due
to this turnover, the messaging and direction for HPs
cloud products has been fragmented and inconsistent.
Current SVP of HP Cloud Services, Zorawar Singh, has
been very outspoken about the aggressive plans he
has for the HP OpenStack Cloud. HP is completely
committed to OpenStack and making it ready for
enterprise-ready workloads, extending the OpenStack
environment further with value added services such as
billing, metering, identity, orchestration, load
balancing, DNS and messaging services. They intend
to fuse OpenStack functionality into their hardware
to provide value added benefits for their cloud
customers that use HP hardware.

Cisco

HP-powered enterprises may be waiting longer than

expected to climb onto the HP public cloud, according
to Qingye Jiang, chief architect at ezCloud. His
company performed an independent evaluation of
HPs Cloud Services and found many issues that would
make the product unfit for enterprise environments,
including a 35 percent VM creation failure rate and
shortcomings in HPs internal monitoring of resources
in the blog post titled OpenStack Isnt Quite
Enterprise-Ready, Says HP Cloud Services Performance
Test.

3 | Microsofts position on open

source cloud stacks

Dell
Dell has contributed a tool to the community called
Crowbar (based on Chef from OpsCode). This tool aims
to simplify and streamline deployment of the
OpenStack platform and also bundles other helpful
components, such as performance monitoring
software. The majority of their contributions to the
OpenStack Foundation are centered on this tool. At the
latest OpenStack summit they announced Crowbar 2.0
to be coming soon.
Citrix

Cisco recently announced that it has released its own

bundled version of OpenStack with focus on virtual
networking and integration into its latest version of
Nexus switches. Cisco OpenStack edition can be
downloaded for free and includes a wiki describing the
installation process.

Red Hat
Red Hat plans on releasing a commercial version of
OpenStack for its Enterprise customers. For now, they
have a preview of this release available on their Web
site, which works with RHEL 6.3+ and includes
subscriptions that allow a three-node OpenStack
cluster.

Microsoft believes the best solution for cloud

deployments is System Center providing management
functionality for the Cloud OS, whether its Windows
Server or Windows Azure. To that end, open source
cloud stacks are competitive offerings and we will
always strive to convince customers & partners of the
superior value proposition of our solution. However,
we also recognize the importance of providing
administrative functionality in solutions that are not
based primarily on Microsoft technology. Therefore
even in accounts that are pursuing open source cloud
stacks, it is still recommended that the account team
works to deploy Hyper-V as the hypervisor of choice
and deploy System Center in as many use cases as is
practical.
For your reference, weve also included the response
to this question from our public-facing version of this
document:
Microsoft believes that trends in the industry (from
ubiquitous access to modern applications to the ability
to gain meaningful insights from ever-growing pools of

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

data) call for a new approach to datacenter

computing. Microsoft calls this vision the Cloud OS
and has refreshed its entire server portfolio this year
to support this strategy. This involves transforming
the datacenter to make it truly dynamic and enable
the creation and operation of modern applications.
These applications and data should in turn be
accessible by employees wherever they are and
whenever they need it so they can make the best
business decisions. Microsoft feels that the integrated
solution of Windows Server and System Center,
combined with Windows Azure, Microsoft SQL Server
and Microsoft Visual Studio provide the most complete
platform to accomplish this objective. Open source
cloud stack alternatives do not provide a solution as
comprehensive as Microsofts. This position is
supported in large part by a recent article from
Gartners cloud analyst, Lydia Leong (available to
subscribers):
http://www.gartner.com/DisplayDocument?
id=2159915&ref=g_fromdoc
However, Microsoft also realizes that some customers
choose to use open source cloud management stacks.
In these cases, we believe that Hyper-V is the best
hypervisor for these environments. Specifically for
OpenStack, Microsoft is committed to support the
OpenStack community to enable this integration as
demonstrated by this public statement:
http://blogs.technet.com/b/openness/archive/2012/04/
18/openstack-hyper-v.aspx

VMware positioning with Openstack

For clarity, on August 26th 2012, it was announced on
the OpenStack wiki that VMware would join the
OpenStack Foundation as a Gold member (note that
this was not communicated directly on VMwares
corporate website). It is worth calling out that this is
not a Platinum commitment (the highest level) and
represents only a $67,000 investment for VMware.
This is a calculated risk for VMware, which has also
traditionally seen OpenStack as a competitive threat
to their core technologies. However, we believe that
this, as well as other recent moves (such as the
acquisitions of Nicira and DynamicOps) indicate their
acknowledgement that the hypervisor layer continues
to become commoditized and that the solution value
will increasingly be realized through the management
tools. We believe theyre looking to parlay their strong
position in the hypervisor into increased market share
in the management layer and are willing to embrace
potentially competitive technology to accomplish this.
This move is also a valuable validation of Microsofts
bet on world-class management technologies in the
recent releases of System Center and Windows Server
and why we worked with the OpenStack community to
enable Hyper-V as a first class hypervisor option.

o
o

vCAC will be able to provision over OpenStack

in the Q4 release (roadmap rules apply).
RabbitMQ is a key element of OpenStack
CloudFoundry praised by OpenStack founders
as the ideal PaaS

Fully supported access to vCenter-managed clusters

from OpenStack Nova
vSphere administration is done through our interfaces
i.e. vCenter, templates, host profiles, etc.
Attachable/detachable disk volume support
Future work in Cinder will enable the leveraging of any
storage type supported by vSphere, including vSAN.
This means that if the customer chooses
OpenStack, they CAN use vSphere instead of
KVM as their hypervisor choice.

Openstack and Hyper-V

Windows Server 2012 Hyper-V, Microsoft Hyper-V
Server 2012 and Windows Server 2008 R2 Hyper-V,
and Microsoft Hyper-V Server 2008R2 are supported
hypervisors in OpenStack starting with the Essex
release of OpenStack. Details of the integration
functionality can be found here:
http://wiki.openstack.org/Hyper-V

Microsoft worked with the OpenStack community to

enable this integration, and is committed to continue
supporting the community in the adoption of Hyper-V
for the Essex release as well as future OpenStack
releases. However, Microsoft does not own this
integration code. Since the code is Open Source, by
definition it is owned and supported by the community.
Microsoft provides support for its technologies and
therefore would support Hyper-V within an Open Stack
deployment (e.g. my Hyper-V server has crashed and I
cant stand it back up or I cant start VMs, even from
the Hyper-V console). However, this support does not
extend to the Open Stack technology itself (e.g. I
cant start VMs on Hyper-V from within my Open Stack
console is not a scenario that would be supported by
Microsoft). As an open source project, technical
support for the Open Stack technologies specifically is
provided by the community or via support
subscriptions purchased from commercial entities.
Microsoft does not offer such a support contract.

Where does Hyper-V fit in

VMware was the first non-founding corporate member

of the OpenStack Foundation
Our NSBU (formerly Nicira) contributes most of the
Quantum and OpenVSwitch code for the Networking
stack
vSphere 5 w/vCenter supported in OpenStack Grizzly
o

Already submitted over 1,000+ lines of

Python code to the project

VMware committed to open interfaces

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Different Approaches

Essex Support (http://wiki.openstack.org/Hyper-V)

o
o
o
o
o

MSI Installer (nova-compute on Hyper-V

nodes)
Start/Stop VMs
Pause / Suspend / Resume
Glance integration
Flat networking

They needed high availability, no cascading failures

and smooth scale down and scale up. They were able
to get there by deploying OpenStack along with
considerable custom work of their own, both above
and below that layer
Pravir Chandra, CTO Security Architect, Bloomberg

OpenStack vs. System Center Suite

Feature Comparison

Coming up in Folsom and beyond:

o
o
o
o
o

Continuous Integration (test framework)

Live Migration
Volume support (partially done by community
for Essex)
Snapshots
Quantum integration for non-flat networks

Go to Market strategy

Nothing changes with our primary selling motion

around System Center Suite
Hyper-v OpenStack effort is focused on helping
customers who have already chosen OpenStack
leverage Microsoft technologies as best-of-breed
components.

Openstack and System Center

As a comprehensive cloud and datacenter
management solution, components of System Center
will add significant value to an open source cloud stack
deployment. This is especially true because the
currently available open source cloud stacks focus only
on the Infrastructure as a Service layer and do not
manage all layers such as the application layer.
Of specific value would be the monitoring capabilities
within System Center as well as the ability to
orchestrate the execution of defined processes,
service management and the back-up features in the
product.
there are cases where System Center integration with
open source can come in handy. For example, there
are management packs for monitoring Linux and UNIX
and the Orchestrator Integration Toolkit for SSH
support. These integrations can help System Center
manage heterogeneous guests on OpenStack as well
as provide some integration at the fabric layer.

OpenStack is Tedious to Setup,

Resource Intensive to Maintain

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Are OpenStack Really Avoiding the

Lock-in?
What Drives Interest in OpenStack

Beware of the Hidden and Long-term

Costs

SWOT

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

I have a customer / partner

evaluating an open source cloud stack
solution. Where can I find resources
to support me in competing with
these solutions?

This document will serve as a guide for the corporate

position on how to approach open source cloud stack
situation, but specific resources that will also be useful
include:
Product specific content & collateral

OpenStack Adoption

o
Public
Windows Server - http://www.microsoft.com/enus/server-cloud/windows-server/2012-default.aspx
System Center - http://www.microsoft.com/enus/server-cloud/system-center/default.aspx
o
Internal
http://sharepoint/sites/privatecloudlaunch/pages/d
efault.aspx

Commercial Software Initiative (CSI)

o
o
o

Public - http://www.microsoft.com/openess
Internal - http://openness
Core deck on openness (customer ready) http://infopedia/docstore/pages/KCDoc.aspx?
DocId=171039

General escalations - http://comphot

Specific large opportunity escalations
OSCSEscal@microsoft.com (Open Source Cloud Stack
Escalations)

What are the recommended sales tactics for

integrating Hyper-V and System Center into
my account which has decided to move
forward with OpenStack?

HP recent announcements
On June 12th 2013 HP announced the HP Cloud OS, a
cloud technology platform based on OpenStack that
claims to enable workload portability, simplified
installation and life cycle management across hybrid
clouds see http://www8.hp.com/us/en/hp-news/press-release.html?
id=1416091. The HP Cloud OS will be supported on HPs
proprietary private cloud offering (HP CloudSystem),
HPs public cloud offering (HP Cloud Services), and
HPs recently announced platform for provisioning
cloud workloads such as dedicated hosting and largescale websites (HP Moonshot). HP is also offering an
HP Cloud OS Sandbox at no cost, for customers
interested in evaluating an OpenStack-based
architecture for cloud computing.

4| Sales scenarios and messaging

Hyper-V - As noted above, Hyper-V is now supported

within an OpenStack solution and you should
recommend for it to be included in the deployment for
providing the following customer value:
Integration Windows Guests runs best on
Hyper-V due to kernel level awareness and
optimization through Hyper-V integration
services
o
Licensing - Its included in the Windows
Server licensing the customer is likely to be
deploying
o
Performance Hyper-V is a better
hypervisor, with significant improvements in
the 2012 release (datasheet linked here)
including for Linux guests running on HyperV. Examples include:
Over 1M IOPs from a single VM
64 Virtual CPUs per VM
1TB of memory per VM
1,024 VMs per host
64 nodes in a cluster
Up to 64TB of storage per VM
o
Technical Support for Windows Guests
Microsoft provides technical support for
Windows guests if they run on Hyper-V or on
o

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

3rd party hypervisors that have passed the

Windows Server Virtualization Validation
Program (SVVP). Not all open source
hypervisors have gone through this validation

System Center Regarding System Center, while the

customer may find redundancies in functionality of
aggregating and delegating physical resources in
clouds (specifically the VMM component), there is
still significant value to be added by including System
Center especially for guest OS management, and
specifically in the following areas:
o
o
o
o

Configuration management for guest

OSs
Monitoring of guest OSs including Linux
Service management and automation
Data protection

Note that in these cases, the functionality of System

Center may compete with other open source tools
which are not part of the native open source cloud
stack. Examples for such open source tools include
Puppets, Juju, Chef for configuration management and
automation, Nagios and Ganglia for monitoring, and
other tools providing capabilities similar to System
Center.

My partner (ISV, OEM, etc.) wants to partner

with Microsoft around an OpenStack
solution. How do I approach this?
Microsofts platforms are designed with the goal to
allow partners to easily integrate our platform
capabilities. Technical guidance can be found on
TechNet. Microsoft does not currently have business or
marketing programs for partners focused on open
source cloud solutions. With that said, Hyper-V
functionality is available within OpenStack and will
likely be enabled in CloudStack deployments. Also,
System Center can add significant value to solutions in
the space of monitoring, automation, service
management and data protection. If you hear of a
partner whod like to work with Microsoft closely
around OpenStack, please refer them to
OSCSEscal@microsoft.com (Open Source Cloud
Stack Escalations)

How to talk to customers DONTs

Rackspace Anxiety Questions

Do you have applications running internally that you

wish to move to the cloud? Are they virtualized on
Hyper-v today?
Do your developers have deep expertise in Rackspace
or OpenStack architecture to ensure security,
availability, and performance of applications? Do they
know company policies in these areas? How do you
monitor these?
What is your plan if you want to pull workloads out of
Rackspace?
Do you use any IT management tools? Can you
integrate them with Rackspace?

Give them the "basic technical facts" about

OpenStack, so that we can help play the role of
"trusted advisor.
Emphasize that OpenStack is a framework, what
matters is quality + capabilities of underlying
components.
Indicate that Microsoft cares about customer choice,
and is contributing to OpenStack both technically & as
a member of the Foundation.
Emphasize that Microsoft sees OpenStack as an
opportunity b/c of its best of breed components. We
also work extensively with partners to develop these
areas.
Highlight that OpenStack currently is very focused on
DIY-type customers.
Shift focus to technical aspects of OpenStack +
Microsoft, away from controversial stuff.
Be honest about where we are in terms of OpenStack
integration. For most Microsoft customers, its more
important that we talk clearly about where we are
going and when we will get there than it is to claim
that we are better integrated than we are.
Put emphasis on enterprise-grade workloads, where
Microsoft is extremely strong, and on operations +
management (often overlooked in current hype).
Emphasize that things are bigger than compute,
including network, storage, management,
provisioning, etc. Customers will need solutions in this
department that work together well (and can be
supported in a sane way).

Dont emphasize momentum behind OpenStack

(independent of Microsoft)
Dont emphasize production readiness of OpenStack in
general, especially in terms of enterprises.
Dont put focus on license costs, or pump up open
source in a way that suggests it is a superior overall
model.
Dont throw OpenStack under the bus overt criticism
is best avoided and any criticism should be focused on
underlying technologies that Microsoft competes with.
We can highlight weaknesses in OpenStack + KVM by
talking about the strengths of OpenStack + Hyper-v.
Dont reduce Hyper-v / System Center to "KVM
equivalence". always talk about them being on two
different levels, which they are in terms of enterprisegrade workloads.
Dont paint a specific roadmap beyond what has been
committed for 2013 Cloud OS vision.
Dont entrench the System Venter Suite vs.
OpenStack mentality.

System Center delivers lower TCO,

faster TTM than free solutions

How to talk to customers DOs

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Perceived as a strong opensource supporter through

OpenStack, and appeals to customers largely on the
basis of simplicity, raising the adoption
Leverages OpenStack partner ecosystem of 110
technology players including Cisco, Citrix, HP and
Microsoft in enhancing cloud presence
Strong channel system, generating about 70% of
Rackspace business
Building up its cloud infrastructure to target all
potential OpenStack customers

Rackspace Weaknesses

Summary

OpenStack positioning is not black and white

Understand your customers goals, motivations and
challenges, and help them with the right strategy.
OpenStack is here to stay Even if you have to fight it
now, find a way to make it work to your advantage in
the long run.
Inform yourself If you are in Sales, read all the
material we have in our landing page. If you are
technical, get your hands dirty.

How We Can Win

5 |Windows Azure vs. Rackspace (For

offerings based on OpenStack)
Grocery vs. Restaurant?

Its cloud offering features are less superior compared

to the close IaaS competitors including Amazon and
GoGrid
Lack of scale in terms of resources and global
presence impacts its effectiveness while competing
with large global cloud players
More challenged in pursuing larger prospective clients
which are looking for solutions that extend beyond
hosting services to include more enterprise
applications services and other complementary
managed services
Less developer oriented cloud offerings
Rackspace relies on third-party security to protect its
equipment against breaches, and lack the skill set to
protect its customers from more sophisticated security
It is a Xen based service provider, limiting its
capabilities in targeting enterprise customers,

Position Microsoft as the leader in the PaaS category

and articulate the advantage of PaaS over IaaS in
every conversation with customers and partners (i.e.,
reduced IT administration burden, faster-to-market).
Focus the discussion on the business value and not
feature/functionality
Use customer case studies to build credibility and
demonstrate momentum.
Emphasize Microsofts commitment to the cloud and
outline its vision in providing a continuum of solutions
that enable private cloud, public cloud, and a hybrid
cloud.
Highlight our breadth of cloud offerings across public
cloud stack and private cloud
Leverage our vast Partner ecosystem.
Take advantage of Microsofts broad reach in the
developer community and partner network to drive
early adoption. Raise awareness of the introductory
special offers, the MSDN subscriber offers, and the
MPN offers.

Rackspace Strengths

Key Points for Comparison

Rackspace just offers basic IaaS capabilities and doesnt

have a clear roadmap for future. We provide end to end
cloud services across SaaS, PaaS and IaaS.
Using Rackspace means adding another company to a
customers vendor portfolio. Using Windows Azure
Platform probably raises fewer vendor management
issues, because it works with MS existing sales,
licensing and support channels

Well familiar as a managed hosting player by far

reaching the cloud hosting customer
Driving the strong SLAs and support through managed
cloud, with over 10% of new cloud server customers
adding its managed cloud service
With hybrid hosting allows combination of cloud and
dedicated servers

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Microsofts ability to invest in its cloud platform

exceeds Rackspaces by a significant amount ($44B
vs. $0.05B cash on hand in Q3 11)1. This is evident
with our Windows Azure Platform Appliance and
significant other new capabilities that have been
added to Windows Azure Platform.
With Windows Azure AppFabric and Windows Azure
Virtual Network, it is easy to develop hybrid solutions
that integrate existing on-premises enterprise
applications with cloud-based services.
Microsoft provides one of the most complete set of
cloud services ranging from productivity to business
apps to platform to infrastructure. MS provides
customers ability to run a scale-out Platform-as-aService Cloud Platform in their own data centers with
Windows Azure Platform appliance. The first wave is a
limited production release with a small set of
partners/customers as we optimize the appliance to
run on a greater selection of hardware and to integrate
with customers existing management tools and
processes.
Security is one of the biggest concerns among
companies that are considering cloud computing. The
idea of having sensitive business data floating around
out there makes people nervous. Microsoft has
designed the Windows Azure Platform with security in
mind. In considering cloud service providers and
platforms, four different aspects of security must be
evaluated: physical security, logical security, service
continuity and compliance and certification. Below is a
summary of the security features, and talking points
for comparing the Windows Azure Platform to
Rackspace

6| Support and Documentation

Companies can purchase derivative products and
services from one of the many companies now using
OpenStack in their cloud products. In these cases,
support would be included.
If not purchasing services from another company,
significant free documentation is available online at
both the OpenStack site and at various blogs, forums,
and even small companies such as StackOps.
However, because they are community driven, each
piece of documentation has varying levels of
completeness and update schedules. Forums are, of
course, driven by user response. Below, we detail the
main documentation and community pages we found.
The main landing page for OpenStack documentation,
docs.openstack.org, includes the following guides
offered in both PDF and browser-based formats:
OpenStack

Projects

Common Questions

OpenStack Security

Blog

Community

User Groups

Events
Jobs

Companies
Contribute

Documentation

OpenStack Manuals

Getting Started

Wiki

API Documentation

Branding & Legal

Logos & Guidelines

Privacy Policy

Trademark Policy

OpenStack CLA

Also offered on the main OpenStack Web site is a wiki

with community contributions at
http://wiki.openstack.org/ .
Facebook:
https://www.facebook.com/pages/OpenStack/1041391
26308032
Twitter: http://twitter.com/OpenStack
The main forums available for OpenStack questions
and support are at
http://forums.openstack.org

7 | Microsoft Differentiators
With the addition of new and powerful virtualization
features in Microsoft Hyper-V in Windows Server 8 and
Microsoft System Center Virtual Machine Manager 2012,
Microsoft can provide a rich user experience and efficient
management technologies for meeting a wide range of
customer needs. Microsoft regards virtualization as an
enabling technology that facilitates greater flexibility and
efficiency in the data center.

Enterprise Ready
Enterprise customers such as HSBC, Target, and
Ingersoll Rand deploy Hyper-V in production. Since
2008, Hyper-V has gone through three releases (R1,
R2, and SP1) to enhance performance and scalability
and add new features such as Dynamic Memory.
Hyper-V R2 SP1 provides a scalable, reliable, and
highly available virtualization platform.

Built-in Virtualization and Familiar

Platform
Hyper-V is a key feature of Microsoft Windows Server
2008 with built in security and reliability capabilities,
providing an environment that is familiar to Windows
administrators

Superior Management
System Center Virtual Machine Manager can manage
physical, virtual, and cloud environments, as well as
heterogeneous hypervisor environments (Hyper-V,
ESXi, Xen). System Center Operations Manager also
can provide full visibility into applications.

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Compared with any of the major system management

vendors, Microsoft offers the easiest solution to install,
begin monitoring/provisioning, and provide value to
the business. Other vendor solutions require
significant tweaking just to get them to discover
devices. This ease of use remains a key differentiator
in the market as highlighted in each survey done to
date. Stress that BMC has multiple consoles and GUIs
because of acquisitions from the past. For example,
one would have to work with well over 20 BMC
consoles to accomplish change, configuration,
performance and availability management tasks while
Microsoft can accomplish that with two consoles Ops
Mgr and SCCM.

Hyper-V & System Center Optimized

for Microsoft Workloads
Microsoft lab results demonstrate exceptional
performance for Microsoft applications on Microsoft
private cloud: 450,000 concurrent Microsoft
SharePoint users on one physical server with five
VMs; 80,000 OLTP users on one server with four VMs;
and 20,000 Microsoft Exchange mailboxes on one
server with five VMs. These highly scalable and high
performance results show that Hyper-V can be used to
virtualize Tier-1 data center applications with
confidence. The report is located here,
http://www.microsoft.com/virtualization/en/us/solutio
n-business-apps.aspx

Physical and virtual

Microsofts System Center provides a robust physical
and virtualized server management solution. This
powerful solution provides greater breadth for
customer infrastructures, and enables support for
existing and future server platforms.

Extensibility
Microsoft provides the most extensible solution for
partners and customers, enabling the ability to
monitor, provision and self-heal any application or
integrate with existing management tools. This
ensures that extensions to meet a customers specific
needs can quickly be completed without code
changes. This is not possible today with BladeLogics
solution and requires the vendor to create support for
new infrastructure components.

Integration
BMC has been unsuccessful integrating its acquired
datacenter automation technologies (Marimba, Run
Book Automation) into its core sales strategy. BMC
needs multiple products and acquisitions to
accomplish the same capabilities as System Center.
Point out the importance of a tightly integrated
solution. With System Center, customers get a
seamless user experience through integrated user
interfaces and a common look and feel. If customers
encounter an installed base with Marimba or other
BMC acquisitions, try to displace.

8| System Center Resources

In all scenarios it is recommended that you leverage

System Center 2012 Cloud & Datacenter Management
core content for your customer engagements:
System Center Cloud & Datacenter Management
Core System Center 2012 messaging and positioning
System Center Cloud and Datacenter Management
executive and ITDM pitch and the train the trainer
deck recording
System Center cloud and datacenter vision/roadmap
pitch (some slides are NDA confidential) & some
conversational ideas

Resources to leverage automation to:

IT process automation resources on InfoPedia

Solution overview (academy live)
Target scenarios, pain points to look for
Automation resources on Infopedia
Workshop Offer to develop opportunities

Other information
Management Compete page on Infopedia
Gartner Analysis on BMC
BMC Pricing information
Gartner analysis on competitive landscape

Ease of use

2013 Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Reso

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Licen
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