@rcj: this is as expected. The cloud-init user-data needs to have a
metadata key of base64_keys="cloud-init:user-data" in order for it to
work.

The logs indicate that the instance your on is lacking a ubuntu user.
Can you re-run the test, but create the ubuntu user before running the
test?

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https://bugs.launchpad.net/bugs/1272115

Title:
  [SRU] cloud-init SmartOS datasource provider is not compliant to
  datadictionary

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