Finnish hosting provider differentiates itself through hybrid cloud offering

Finland-based Innofactor wanted to expand its hosting business but also needed a clear way to differentiate itself from its competitors

Operating as a hosting provider in Scandinavia presents some challenges because of the competitive nature of the market. Innofactor, an IT systems and hosting provider based in Espoo, Finland, wanted to expand its hosting business but also needed a clear way to differentiate itself from its competitors.

To help it achieve its goals, the company – which serves more than 1,000 private and public sector organisations across Europe and employs more than 400 people across Finland, Denmark and Sweden – decided to simplify and modernise its datacentre by moving away from its existing VMware-based infrastructure that was old, inconsistent and costly to support. In addition, the company wanted to take on more elements of Microsoft Azure to support the expansion of its own cloud application hosting business.

“Innofactor had grown through acquisitions and ended up with a mixed IT infrastructure that was virtualised with various versions of VMware software and expensive to maintain. The company sought to streamline its infrastructure and personnel, eliminate the need to keep expensive VMware specialists on staff, and chart a committed path to the cloud,” said CEO and president Sami Ensio.

The company chose to switch from VMware to the Hyper-V technology in the Windows Server 2012 R2 operating system (OS) as its hypervisor. In expanding its use of Microsoft Azure, it created infrastructure as a service (IaaS) using the Azure public cloud.

“We were drawn to Azure from a price functionality and management perspective. We want to offer hybrid cloud solutions using Microsoft System Center as our single management console,” said Ensio.

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Migrating hundreds of virtual machines

Innofactor migrated 250 of its original 586 VMware virtual machines to Azure, moved 150 to its Hyper-V private cloud and decommissioned the rest. One of the biggest challenges was to manage this migration efficiently.

Microsoft introduced Innofactor to Vision Solutions, a member of the Microsoft Partner Network and an expert in cross-platform migrations. Vision Solutions offered anything-to-anything migration capability, a completely automated process, with no significant downtime during migration. 

“With Vision Solutions Double-Take Move, Innofactor could migrate our many versions of VMware to Azure without taking production servers offline,” said Ensio. In the end, Innofactor averted 2,500 hours of downtime.

Double-Take Move links to Microsoft System Center 2012 R2 Service Manager, Virtual Machine Manager, and Orchestrator.

“Innofactor simply chooses the virtual machines to be migrated, points to the target server in Azure, and Double-Take Move does the rest,” added Ensio.

The total migration period lasted around two months. Innofactor also spent a further three to four months assessing the VMware portfolio and determining the workload destination. Importantly, Innofactor was able to keep its staff focused on revenue-generating business while performing a large migration from VMware to Azure and Hyper-V.

“It would have taken one to two hours per server to migrate those servers manually, and we migrated 300 servers,” said Ensio.

Adding disruptive hosting services to the existing offering

Innofactor had already been using the Azure platform as a service (PaaS) for years to develop customer systems. As part of its efforts to offer a more differentiated service, the company decided to add Azure IaaS to provide what it describes as disruptive hosting services that were not yet available on the standard hosting market, while also refocusing its staff from building infrastructure to delivering those new services.

“By entrusting more of its business to Microsoft Azure, Innofactor expects to increase its cloud business tenfold in the next three to five years, and greatly expand its infrastructure without adding staff,” said Ensio. “With Azure, we can offer disruptive services that competitors can’t provide in a cost-competitive manner.”

Innofactor started to move its server to Azure IaaS and Hyper-V on a large scale during 2014. Now, the company has already used Azure IaaS services – including Azure Virtual Machines, Azure Virtual Network, and Azure Storage – to create new hosting services, with more on the way.

Helping to cut customer costs by up to 50%

One such service is Innofactor 7to7, an IaaS offering that lets customers run applications in Azure Virtual Machines from 7am to 7pm and then releases those virtual machines at night to save money. “With our 7to7 IaaS service, customers can reduce their costs by 50%,” said Ensio.

Another new service is the Innofactor Business Cloud, which customers use to combine Microsoft Dynamics NAV for enterprise resource planning, Microsoft Dynamics CRM for customer relationship management, and Microsoft business intelligence systems in Azure. Customers can add Microsoft Office 365, a Microsoft cloud-based suite of productivity, communications and collaboration services. Package options are selected through a simple online menu, configured to the customer’s needs.

“Our customers have traditionally gotten these types of services from local providers,” Ensio said. “But we’ve made it easy for them to get the same services in the more cost-effective Azure environment while still having local service and languages and using a very simple menu system.”

Public over private cloud

Innofactor has a clear public cloud–first strategy: “We want to run everything possible in Azure, but if it’s not possible, we will run a workload in our Hyper-V private cloud,” said Heikki Jekunen, vice-president of products and services at Innofactor.

Jekunen noted that all of Innofactor’s customers will run workloads in both public and private cloud, because few are willing or able to put everything in the public cloud.

“About 50% of our environment is in Azure now, but our Azure environment is growing rapidly. We hope to have 80% of our workloads in Azure in a year,” he added.

Long-term benefits

As well as increasing its cloud business tenfold in the next three to five years and expanding its infrastructure without adding staff, Innofactor also expects to increase its competitiveness by keeping operating costs low.

“Because IT talent is so expensive in our region, it’s important for us to not have multiple staff members doing the same things to multiple platforms,” said Jekunen. “By standardising on Microsoft, we have to employ far fewer specialised staff members. We have increased our server count by 30% but are managing them with the same staff. We expect to double our infrastructure size with no staff increases. Keeping operating costs low helps our price competitiveness, which is critical in our business.”

Innofactor also expects IaaS services to generate significant revenue and ultimately enable it to enter other markets.

“Our current cloud hosting business is about $2m, and in three to five years we estimate that it will be $20m,” Ensio said. “Hosting is where our long-term growth lies, and using Azure will help us not only come up with new products, but also expand our market beyond the Nordic countries.”

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