Apidays New York 2024 - The value of a flexible API Management solution for O...
On app Ditlev Bredahl
1. Lessons from the trenches
(and how to b ild a profitable cloud h i b i
( dh build fi bl l d hosting business)
)
Cloud Expo Europe, London, 2nd February 2011
Europe London
Ditlev Bredahl, CEO, OnApp
@ditlev linkedin.com/in/ditlev
ditlev@onapp.com facebook.com/ditlev
2. What is OnApp?
Cloud deployment & management
p y g
software for hosting providers
3. What does OnApp do?
Commodity hardware Elastic cloud On demand resources End users
VM Deployment
VM Management
VM HA/Failover
User management
Utility Billi
Utilit Billing
4. Company info
45+ employees in US and EU
45,000+ servers deployed
100+ client clouds deployed
Adding ~1 cloud per day
5. So, what have we learned...
…from 100+ cloud deployments ?
6. Vendor & analyst chatter
EC2
Azure Cloud OS
Interoperability
I bili Cloudware
Cloud Oriented Architecture
Portability Cloud Storage
Consumption Based Pricing
12. What we thought hosts cared about
Security
I t
Interoperability
bilit
Compatibility
13. What hosts actually care about
Low entry costs
Ti
Time t market
to k t
Density/profitability
14. What challenges do hosts face?
Storage:
#1 concern
100+ clouds, close to 50
different storage configs
Ability to use multiple tiers of
storage
Billing for IOPS
15. What challenges do hosts face?
Traditional storage vendors
Not always a fit for mass-
mass
market hosts
The industry is crying out for
storage innovation
16. What challenges do hosts face?
Infrastructure:
Infrastr ct re
Ability to use existing
infrastructure
Capitalizing on depreciated
hardware
Ability to mix ‘old’ & new gear
old
17. What challenges do hosts face?
Billing:
Billin
New billing structures
Charging per hour per minute
hour,
Or should they?
18. What challenges do hosts face?
Support:
Finding hiring training staff for cloud hosting services
Finding, hiring,
“Support us like we support our clients”
Support clients
19. What challenges do hosts face?
Cloud hosting business plan
plan:
Hosts need to pay attention to
their cloud business strategy
...even more so than usual
20. Business plan – ARPU & Profits
Host
H $800
Client
Cli
$40,000
$35,640
$35,000
$35 000 $33,391 $700
99
$30,000 $600
$25,000 $500
300
$20,000 $400
$15,000 $300
$10,080
$10,000
$10 000 $8,030
$8 030 $200
300
$5,000 $100
100
$0 $0
Dedicated Cloud Dedicated Server Cloud Server
Monthly revenue Gross prof it
WebServer 1 WebServer 2 Load balancer
21. Business plan – ARPU & Profits
Host
H Client
Cli
$40,000 With the$800
$35,640 cloud:
$35,000
$35 000 $33,391 $700
99
$30,000 $600
$25,000 Potential revenue/cab increases – at a
$500
300
$20,000
higher margin too – BUT with lower
$400
$15,000 $300
$10,000
$10 000
$10,080
$8,030
$8 030 ARPUs$200
300
$5,000 $100
>> KEEP AN EYE ON CPAs << 100
$0 $0
Dedicated Cloud Dedicated Server Cloud Server
Monthly revenue Gross prof it
WebServer 1 WebServer 2 Load balancer
22. Business plan – higher entry barriers
Hardware cost of bringing Hardware cost of bringing
y
your first dedicated server y
your first cloud server client
client live: $2,500 live: $25,000
23. Cloud – the end of overselling?
Shared hosting:
540 seat Jumbo jet = 700 passengers
Dedicated server hosting:
540 seats = 540 passengers
Cloud hosting:
540 seats = 4-500 passengers
Underselling??
25. Cloud – 3 phases
1.
1 The Cloud is cool and sexy
• High margins, high conversions, low CPAs
2. The Cloud is commoditized
• A CPU is a CPU is a CPU = transparency = price erosion
• Focus on de-commoditizing your offering
gy g
3. The Cloud is no longer the cloud
• I’ h
It’s how stuff i d
ff is done…
26. How will hosts compete?
De-commoditize the cloud offer
Add value with partner deals
Target specific niche markets
27. In summary
Cloud is here to stay
It isn t as complex or expensive as you
isn’t
might think
The time to act is now – late arrivals
will face a much tougher market
