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Credit Suisse Spins Off Homegrown Virtual Machine Management Firm

After trying all sorts of other vendors, the financial services firm built DynamicOps so well; it's decided to offer it as a standalone product.
Credit Suisse, in an early push to virtualize both servers and desktops, realized that things were going to get complicated fast. So it started to develop three years ago its own software to manage an environment with a variety of hypervisors and virtual machines.

Today it's doing something that it's never done before: spinning out a startup company from its own IT staff to let the rest of the world buy what works for Credit Suisse. The financial services firm's own venture capital group, Next II, will be the first backer of the firm, DynamicOps LLC.

"We all felt this was a growing field that presented an enormous opportunity," said Steve Yatko, managing director of Credit Suisse's Global Research and Development Group, in an interview. Some IT staffers who used to report to him, such as chief architect Leslie Muller, are now executives in DynamicOps. Muller is its CTO.

VMware, Citrix Systems, Microsoft, and several startups, such as Veeam Software, Akorri, and Double-Take Software, already offer virtual environment management tools. Rich Krueger, CEO of DynamicOps, is an executive with experience at storage virtualization startup, Incipient, as well as EMC, owner of VMware. The firm will be located in Burlington, Mass.

"The virtualization market is a noisy market. But we think we have a product that meets the needs of a global organization," he said in an interview.

Most of DynamicOps competition will come, not from establish vendors but from in-house efforts to rationalize competing virtualization environments, he said, and he thinks Credit Suisse has got a lead on most organizations.

For example, Credit Suisse has many different kinds of hardware, as most companies do, and they use different forms of virtual machines. Sun's UltraSparc servers run Solaris Containers, the IBM mainframe would use the venerable LPARS, and x86 systems, whether servers or desktops, use some combination of VMware, Citrix System's XenDesktop and open source Xen -- and somewhere down the road -- Microsoft's Veridian, now known as Hyper-V.

Credit Suisse has even experimented with KVM, the virtual machine generator inside the Linux kernel. As it is first offered, Virtual Resource Manager will be able to handle VMware ESX Server and Citrix Systems XenServer and Sun Solaris Containers. It is working with adapters for open source Xen and KVM in prototypes.

It didn't know exactly what combination of virtual machines it would ultimately employ. So it started building its own virtual environment management tool, Virtual Resource Manager, to provision, track and decommission virtual machines, regardless of vendor.

Virtual Resource Manager from DynamicOps will work with VMware's existing Virtual Center, or Virtual Infrastructure 3 or XenServer environments and put management layer over them that doesn't require a line of business managers to know the ins and outs of Virtual Center or other tools. Credit Suisse needs several instances of Virtual Center to manage its virtual machines. It is federating their operation under its Virtual Resource Manager.

"There's lots of knobs and dials on those other tools. The line of business manager doesn't have an IT understanding of virtualization," said Krueger, yet companies need to give line of business managers the authority to generate new virtual servers and desktops, when they are needed.

DynamicOps' Virtual Resource Manager knows that a Credit Suisse investment banker wants to implement a different sort of virtual machine from the Credit Suisse private banker and gives each the ability to do so from the same tool.

Most of those [vendor-built] tools don't reach out beyond the vendor's own product line," said Yatko. "We wanted a cross-platform product," he said.

In effect, however, users of VMware ESX and Citrix Systems XenServer management tools will not replace them with DynamicOps products but get a layer of management software that overlays them. "We want to leverage what's out there," said Krueger.

Credit Suisse has been implementing virtualization of servers and desktops through its four worldwide data centers. "We know we're in the multi-thousands of servers and desktops virtualized," out of a total of roughly 10,000, said Krueger. Its virtualization software has been implemented by other firms but Krueger wouldn't name its early adopters.

Krueger said there was little debate over whether to launch the startup or whether IT staffers were free to join it. It was launched with the full support of top Credit Suisse management, he said.

"Forming DynamicOps provides Credit Suisse with the opportunity to realize a return on its software investment," said Karl Landert, CIO of Credit Suisse, in a prepared statement supporting the move.