How a Fintech Cut Infrastructure Costs 65% Migrating to OpenStack + Kubernetes
A West African fintech serving 2M+ users migrated from legacy VMs to managed OpenStack and Kubernetes — reducing monthly infrastructure spend from $127K to $44K while improving uptime and deployment speed.
The Challenge
A fast-growing fintech company processing 500,000+ transactions daily was hitting the ceiling of their legacy infrastructure. Their stack — a mix of bare-metal servers and VMware VMs across two data centers — had served them through their first 2 million users. But the cracks were showing:
- $127,000/month in infrastructure costs, climbing 15% quarter-over-quarter
- Deployments took 2-3 days with manual coordination across 4 teams
- Scaling required hardware procurement — 6-8 week lead times for new capacity
- 99.7% uptime — good on paper, but the 0.3% translated to 26 hours of downtime per year, each hour costing an estimated $45,000 in lost transactions
- VMware licensing alone was $216,000/year — and rising after the Broadcom acquisition
Their VP of Engineering was clear: "We need cloud-native operations without cloud-native costs. And we need it before our next funding round closes."
The Solution
Fugoku designed and delivered a managed private cloud platform built on:
- OpenStack (Bobcat) for IaaS — compute, networking, and identity management
- Kubernetes 1.29 for container orchestration with Cilium CNI
- Ceph for distributed storage — block, object, and file in one cluster
- ArgoCD for GitOps-based continuous deployment
- Prometheus + Grafana + Loki for full observability
The entire platform was deployed on repurposed existing hardware plus 6 new compute nodes — in their existing data center footprint.
The Migration
Week 1-2: Discovery & Architecture
Automated infrastructure scanning mapped 52 services, 14 PostgreSQL databases, 6 Redis clusters, and 3 Kafka brokers. Resource utilization analysis revealed that average CPU utilization across VMs was just 18% — they were paying for 5x the compute they were using.
Target architecture: 3-node HA OpenStack control plane, 18 compute nodes (12 repurposed, 6 new), 5-node Ceph cluster with NVMe OSDs.
Week 3-4: Platform Build & Wave 1
OpenStack and Kubernetes deployed via automated tooling. CI/CD pipelines established from GitLab through Harbor to ArgoCD. First wave: 38 stateless services migrated to Kubernetes with standardized Helm charts.
The payment processing service — their most critical workload — was migrated with a dual-write pattern: transactions processed on both old and new infrastructure simultaneously for 72 hours, with automated comparison of results. Zero discrepancies.
Week 5-6: Data Migration
PostgreSQL databases migrated using logical replication with automated lag monitoring. Cutover happened during a planned 15-minute maintenance window at 3 AM — actual downtime: 47 seconds per database.
Redis clusters restored from RDB snapshots with key-by-key validation. Kafka clusters mirrored with consumer offset preservation.
Week 7-8: Hardening & Cutover
Remaining services containerized and migrated. Full PCI DSS compliance validation against the new infrastructure. Load testing confirmed 35% improvement in transaction processing latency (elimination of hypervisor overhead).
Progressive traffic cutover over 5 days. Automated rollback triggers set at error rate > 0.1% — never triggered.
The Results
Cost Reduction
| Category | Before (Monthly) | After (Monthly) | Savings |
|---|---|---|---|
| Compute (VMs/instances) | $68,000 | $22,000 | $46,000 |
| VMware licensing | $18,000 | $0 | $18,000 |
| Storage | $24,000 | $8,500 | $15,500 |
| Network/bandwidth | $9,000 | $3,500 | $5,500 |
| Managed services | $8,000 | $0 | $8,000 |
| Fugoku management fee | $0 | $11,000 | -$11,000 |
| Total | $127,000 | $45,000 | $82,000 (64.6%) |
Annual savings: $984,000
Operational Improvements
| Metric | Before | After |
|---|---|---|
| Deployment frequency | 2x/week | 15x/day |
| Deployment time | 2.3 days | 6 minutes |
| Mean time to recovery | 3.8 hours | 12 minutes |
| Uptime (first quarter) | 99.7% | 99.97% |
| Infrastructure utilization | 18% avg | 62% avg |
Business Impact
- Transaction processing latency dropped 35%, improving user experience and reducing timeout-related failures
- Engineering velocity increased — the team shipped 3 major features in Q1 that had been blocked by infrastructure constraints
- Funding round closed at higher valuation, with the infrastructure modernization cited by investors as evidence of operational maturity
- Compliance — PCI DSS audit completed in half the time, with the infrastructure-as-code approach providing complete audit trails
Key Decisions
Why OpenStack over public cloud?
At their transaction volume and data residency requirements, public cloud would have cost $180K+/month (AWS estimate with reserved instances) — 4x more than the new private cloud setup. Data sovereignty requirements for financial services in their jurisdiction also favored keeping infrastructure in-country.
Why managed over self-operated?
Their ops team was 4 people. Running OpenStack + Kubernetes at production grade requires deep expertise in a dozen domains. Fugoku's management layer gave them enterprise-grade operations without hiring a 10-person platform team.
Why Ceph for storage?
Single storage platform for block (VM disks, database volumes), object (backups, logs, artifacts), and file (shared config, ML datasets). Eliminated 3 separate storage systems and the operational overhead of managing them individually.
Timeline to Value
- Week 0: Engagement kickoff
- Week 2: Platform operational
- Week 4: First production workloads running
- Week 8: Full migration complete
- Month 3: Migration cost fully recovered from savings
- Month 12: $984,000 in cumulative savings
Infrastructure that costs less and does more. Talk to Fugoku about your migration.