TDC Hosting enters the emerging cloud market

To read a Danish version of this case study, click here.

Owned by TDC A/S, the largest telecommunications company in Denmark, TDC Hosting A/S provides information technology outsourcing and hosting services. Based in Aarhus, Denmark, the company employs 250 people and has locations in Denmark, Sweden and Finland, with expansion into Norway planned soon. TDC Hosting achieved revenues of 350 million Danish kroner (US$58 million) last year, which are expected to rise to 500 million DKK in 2012.

Identifying an opportunity
With the Infrastructure as a Service (IaaS) market dominated by international giants, TDC Hosting recognized that there might be room for a local Scandinavian player.

Ole Widahl, Director of Products and Solutions at TDC Hosting, explains: “Data security is a growing priority for many companies, and some simply do not want their data stored overseas, which is what most of the principal hosting providers offered. As a result, we saw an opportunity for us to enter the market, offering highly reliable, pay-as-you-go hosting solutions where the data never leaves Scandinavia.”

Instead of following the traditional route of deploying large servers to host the solution, TDC Hosting decided to implement a cluster of smaller servers to eliminate bottlenecks and maximize performance.

“Our priority was to avoid overloading any single server in terms of CPU, RAM or networking,” says Widahl. “As a result, we began looking for a relatively small server that was reasonably priced, but did not compromise on quality. We considered a number of vendors, including Dell and HP, but IBM System x was our final choice due to its proven track record of stability.

Building the cluster
TDC Hosting deployed a number of IBM System x3550 M4 servers, configured in a cluster and virtualized with third-party software, supporting a mixed environment of Linux and Windows operating systems. System x3550 M4 servers are powered by the Intel Xeon processor E5-2600 family, offering intelligent performance that adapts to the company’s needs, providing the reliability needed today combined with the headroom to grow for tomorrow. Comm2ig Aps, an IBM Advanced Business Partner, helped co-ordinate the project and deliver the hardware.

“IBM responded extremely quickly once we had made our initial order of the System x servers,” comments Widahl. “We were able to implement them ourselves and found it extraordinarily easy to do so – they are pretty much ‘plug in and go’, making them ideal for adding extra resources to our cluster as customer demand grows. We were in full production within a couple of weeks of our order, helping us capitalize on opportunities sooner rather than later.”

Exceeding expectations
The new solution, called “Cloud Rack”, enables TDC Hosting’s clients to log in via a web interface and create their own cloud environment. Clients can sign up for pay-as-you-go services, based on the amount of CPU capacity they use, or they can purchase resources on a pre-paid basis. The company chose to undertake a “silent” launch – making the new offering available on the TDC Hosting website, but not investing in any marketing activities.

“As a new venture for us, we wanted to gain some experience before investing promotional budget in the solution,” says Widahl. “We felt it would be a good chance for us to investigate the reliability of the platform, and the response from customers. In actual fact, we have secured more customers than expected, and we feel this is partly testament to the superb availability of the IBM servers helping us generate positive word-of-mouth.”

Simple management, maximum resilience
With TDC Hosting’s System x cluster growing all the time, the easy manageability of the System x3550 servers is a key advantage. In-built predictive failure and diagnostics tools ensure that the company can reduce the risk of issues that could affect performance for clients. In the unlikely event of a hardware failure, redundant, hot-swappable components make it easy to repair individual machines without taking the entire cluster offline.

“The approach we have chosen – adding new servers to the cluster as needed to eliminate bottlenecks – is only possible because the System x servers are so easy to manage,” comments Widahl. “Since implementation, we have experienced no pain with our hardware at all: the System x servers deliver the superb levels of availability we were hoping for when we chose them as our preferred platform.”

Looking to the future
The success of TDC Hosting’s first steps into the IaaS market means that the company now feels it is in a position to fully promote its “Cloud Rack” solution. As more clients sign up to use the service, TDC Hosting will continue to add racks of System x3550 servers as and when required.

Widahl concludes: “We really feel that the sky is the limit for us as we enter the emerging cloud market. Choosing the highly flexible, resilient and scalable IBM System x platform has given us the tools to seize an opportunity to grow our business, and we feel well-equipped to continue to capitalize on this success.”