This white paper discusses strategies for telcos and service providers to build successful cloud computing services. As traditional revenue streams decline, cloud services provide new opportunities. However, choosing the right cloud infrastructure is important. Proprietary solutions can lock providers in and be costly. Open-source cloud technologies offer lower costs, flexibility, and scalability. While open-source provides benefits, deployment can be complex requiring integration and testing of disparate components. The white paper examines how to successfully build an open-source cloud.

1. WHITE PAPER
Entering the cloud fray
Building successful cloud strategies for telcos and service
providers in an evolving market.
© Copyright Canonical 2013 www.canonical.com

2. Executive introduction
In a shifting market, the traditional revenues of telcos and service providers
are under threat. Voice revenues are at an all-time low, and high wireless
data costs are negatively impacting margins. As an additional challenge,
many enterprises are moving low-value workloads and applications to public
clouds such as Amazon, eroding traditional managed hosting revenues.
To overcome these challenges and remain profitable, telcos and service
providers are building cloud computing into their service delivery strategies.
This is enabling them to launch new cloud-based IT services that drive
additional broadband traffic over their networks, helping them increase
core revenues and access new commercial opportunities.
The cloud makes it possible, for example, for telcos and service providers to
deliver new compute and storage services, launch new machine-to-machine
(M2M) services such as automated asset management and meter reading for
utilities companies, and deliver converged communications and IT services
backed up by enterprise-grade SLAs. Many telcos and service providers are also
brokering third-party cloud services to their customers, providing hot-swapping
between cloud providers based on business rules for cost and performance.
Telcos and service providers are ideally positioned to capitalise on the many
commercial opportunities the cloud offers. They own or control the networks
needed to connect customers with cloud services, and have the skills and
experience to deliver end-to-end data security and governance. Critically,
while public cloud providers offer lower compute and storage prices for
start-ups, most enterprises still require the more robust services and SLAs
of a telco or service provider.
The wide-ranging opportunities of cloud-based delivery mean the question for
telcos and service providers is no longer whether to adopt cloud-based delivery
strategies, but how? Successful cloud deployment depends on a number of
factors, from an operator’s choice of cloud technology, to engaging the right
deployment support and technical support from cloud experts.
In this paper, we discuss how telcos and service providers can build a successful
cloud strategy, and how open-source technology can help. Specifically, we
discuss which open-source technology is best for building telco and service
provider clouds, and introduce the next generation of open-source cloud,
which pre-integrates all the infrastructure, systems, tools and services telcos
and service providers need.
© Copyright Canonical 2013 Page 20 of 10

3. Contents
BUILDING A SUCCESSFUL
CLOUD STRATEGY 3
CHOOSING THE RIGHT CLOUD
INFRASTRUCTURE 4
ACHIEVING OPEN-SOURCE
CLOUD SUCCESS 7
CONCLUSION 8
ABOUT CANONICAL AND
UBUNTU FOR TELCOS AND
SERVICE PROVIDERS 9
© Copyright Canonical 2013 Page 3 of 10

4. Building a successful cloud strategy
To maximise margins for cloud-based services, and provide the greatest possible
value for stakeholders and subscribers, telcos and service providers need to
minimise the cost of their cloud-computing infrastructure. As well as building
the cloud on commodity hardware and low-cost software, every element
of service delivery must be automated to reduce management costs, from
resource provisioning and service orchestration, to usage monitoring and billing.
Service providers’ cloud infrastructure must also be ‘carrier-grade’ by definition,
and capable of delivering the high levels of performance, availability and
security today’s enterprise customers demand. It should also be highly resilient,
properly supported and totally secure, with logical separation of customer
systems and data in the multi-tenant environment.
To support the IT and communications requirements of enterprise customers,
cloud infrastructure must be extremely flexible and able to handle any kind
of application or workload. Customers must be able to scale resources up and
down on demand to meet the fluctuating requirements of their own end users
and customers, paying only for the resources they use.
© Copyright Canonical 2013 Page 4 of 10

5. Choosing the right cloud infrastructure
THE PITFALLS OF PROPRIETARY CLOUDS
While many proprietary software vendors offer packaged cloud solutions
that are fast and simple to deploy, many of these are prohibitively expensive
for telcos and service providers in terms of both licensing and support. This
means they are unable to provide the margins needed to make cloud-based
services profitable.
There are also a number of other risks for carriers that choose to deploy
proprietary cloud technologies, including:
• Vendor lock-in
Telcos and service providers that choose to deploy proprietary cloud
infrastructure may be tied into costly forced software upgrades. In addition,
proprietary technologies invariably limit the flexibility of any cloud strategy,
making it difficult or impossible to migrate workloads to other private or
public cloud platforms in the future, even if it makes good economic or
business sense to do so.
• Inability to scale due to high software costs
One of the major issues with proprietary clouds is that additional licenses
are required to add new physical and virtual servers to the environment.
This increases the risk that the cloud will not be able to scale cost effectively
to meet the needs of hundreds, or even thousands of enterprise customers
in the future.
• Costly, inflexible support contracts
In a mission-critical enterprise environment, effective cloud support is a key
success factor. However, support agreements with proprietary cloud vendors
are typically highly inflexible and expensive, requiring all machines across the
environment to be supported under the vendor’s terms. This may increase
costs and impact margins on cloud services.
• Limited cloud features
Proprietary cloud software evolves quite slowly, with only a small number of
developers working on new code. This means that new functionality is typically
only delivered with new releases of software, and that customers may be kept
waiting for the features they request and need.
• High hardware costs
Some proprietary cloud technologies are only certified for a small number
of hardware platforms. This means that telcos and service providers have
limited procurement options, and that low-cost commodity hardware may
not be available to support their choice of cloud software – which often means
higher overall hardware costs.
© Copyright Canonical 2013 Page 5 of 10

6. THE BENEFITS OF OPEN-SOURCE CLOUD TECHNOLOGIES
Service providers can mitigate these risks by choosing to deploy open-source
cloud infrastructure. This provides a number of key benefits, from lower
infrastructure costs and comprehensive cloud feature sets, to regular
updates delivered through a coordinated, worldwide development effort.
Open-source technologies are also able to give service providers the scalability
they need, enabling them to add servers to their environments at will with no
additional licensing costs. With no licenses to buy, and no proprietary software
to update and maintain, operators can maximise margins on cloud services and
ensure that their cloud business is profitable from day one.
Open by nature as well as name, the best open-source cloud infrastructure
uses de facto industry standard APIs, giving service providers the flexibility
to port workloads between different private and public cloud platforms
at will. By building flexibility into their cloud strategy in this way, open-source
technologies help service providers adapt their clouds seamlessly to meet
changing business needs.
Yet another benefit of open-source cloud technology is certification for a
wide array of hardware. The best open-source offerings can be deployed
on all brands of servers, and support different technology architectures,
including X86 and ARM.
© Copyright Canonical 2013 Page 6 of 10

7. OPEN-SOURCE CLOUD-BUILDING CHALLENGES
While open-source cloud infrastructure has clear flexibility and cost
advantages over proprietary alternatives, deployment of open-source clouds
can be complex and time consuming. Specialist technical knowledge and
skills are needed, for example, to deploy, integrate and manage different
open-source cloud components and interfaces. What’s more, this complexity
can make migration of open-source clouds from the lab into full production
a daunting proposition.
Several of the challenges associated with open-source cloud building include:
• Integration requirements
with multiple, disparate components needed to build a comprehensive,
production-ready cloud solution
• Extensive testing
to ensure seamless scaling from ‘test’ clouds to live operations
• Lack of a comprehensive toolset
to automate cloud deployment processes, from bare metal provisioning,
to service orchestration – which increases complexity, manual administration
and overall costs
• Manual development and deployment of security policies
to ensure customer systems and data are protected in the multi-tenancy
environment
• Lack of enterprise-class support
with users left to rely on community help and documentation, which is not
an appropriate level of support for mission-critical enterprise applications
The manual work typically required to build and deploy open-source clouds
can jeopardise managed hosting providers’ cloud strategies and increase time
to market. There is also a risk that cloud services will not translate well from
the lab into production, and that they will ultimately fail to meet customers’
expectations in terms of quality or availability.
© Copyright Canonical 2013 Page 7 of 10

8. Achieving open-source cloud success
To overcome the challenges associated with deploying open-source clouds,
telcos and service providers need the right mix of infrastructure, tools and
enterprise-class support. What’s needed is a ‘production-ready’, open-source
cloud environment that is engineered specifically to meet the needs of
operators.
This should pre-integrate:
• Enterprise-class cloud infrastructure
Telcos and service providers need cloud infrastructure components that can
meet enterprise-class requirements for availability, performance and uptime.
One example of such infrastructure is the leading open-source cloud
infrastructure platform OpenStack, which provides all the compute, storage
and network components needed to build a production cloud, with end-to-end
service automation, seamless scalability and high availability configurations.
• A stable, full-featured operating environment
To ensure success, telcos and service providers need to build their clouds
on a stable, secure, open-source operating system that is synchronised with
the underlying cloud infrastructure both in terms of development and release
cycles to ensure all the latest cloud features are supported. It helps to choose
an operating system with a strong cloud heritage, and ideally one that is
supported for a minimum of five years.
• Innovative cloud deployment and configuration tools
These should speed up the process of configuring bare metal servers,
deploying and orchestrating OpenStack cloud components, and deploying
and orchestrating individual workloads and applications in the cloud.
• Cloud monitoring and management tools
To maximise margins on cloud services, monitoring and management
processes must be highly automated. Telcos and service providers need
tools for managing their cloud infrastructure centrally through a single,
centralised console.
• Deployment and technical support services
Telcos and service providers need end-to-end deployment support and
ongoing technical support for their open-source cloud projects. Operators
should choose support partners with extensive experience of delivering
large cloud implementations, migrations to open-source cloud technologies,
and technical cloud support.
© Copyright Canonical 2013 Page 8 of 10

9. Conclusion
Service providers around the world are investing in cloud strategies and
infrastructure to increase revenue-generating traffic on their networks and
bring new cloud-based services to market. When it comes to deploying cloud
infrastructure to support these services, many operators are attracted to
open-source cloud technologies, which offer very low cost of ownership,
seamless scalability and full service automation.
Despite the benefits of open-source cloud technologies, however, there is
still a perception that open-source clouds are complex and time consuming to
deploy and manage, requiring specific skills sets which may not be available.
To help telcos and service providers overcome this obstacle, and deploy
open-source cloud infrastructure quickly with minimal risk, a new generation
of open-source cloud is needed. This should pre-integrate all the infrastructure,
software, tools and services required to build a successful cloud strategy
from day one.
For more information on the issues discussed in this paper, or to find out
more about the next generation of open-source cloud for telcos and service
providers, please visit ubuntu.com/cloud
© Copyright Canonical 2013 Page 9 of 10

10. About Canonical and Ubuntu for
Telcos and Service Providers
Leading telcos and service providers depend on Canonical to assist, guide
and support them in making the most of their production cloud offerings.
Based on our experience of helping seven of the top 10 operators deploy
production clouds, we have created tightly integrated cloud technologies
that minimise deployment risk and speed time to market.
Ubuntu pre-integrates all the infrastructure, software, tools and services
that telcos and service providers need to achieve cloud success. With a
tried-and-tested reference architecture and deployment methodology,
we can help operators deploy clouds faster, and ensure that cloud services
meet customers’ requirements for performance and availability.
As an integrated element of the Canonical/Ubuntu proposition, Canonical
supports every stage of cloud deployment, from design and implementation,
to ongoing technical support. We provide telcos and service providers with an
efficient, production ready and cost effective route to the open-source cloud.
© Copyright Canonical 2013 Page 10 of 10