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Lessons from the trenches(and how to b ild a profitable cloud h i b i( dh        build      fi bl l d hosting business)   ...
What is OnApp?  Cloud deployment & management          p y               g    software for hosting providers
What does OnApp do?Commodity hardware   Elastic cloud       On demand resources   End users                      VM Deploy...
Company info               45+ employees in US and EU                45,000+ servers deployed               100+ client cl...
So, what have we learned...     …from 100+ cloud deployments ?
Vendor & analyst chatter                        EC2                    Azure      Cloud OS            Interoperability    ...
This is what they’ll tell you…
They’ll tell you that it is very expensive…
Or very complicated…              =              =
That it will solve all problems
Or that cloud is just the same old same old…
What we thought hosts cared about                   Security                  I t                   Interoperability    ...
What hosts actually care about                    Low entry costs                    Ti                     Time t marke...
What challenges do hosts face?                  Storage:                   #1 concern                   100+ clouds, clo...
What challenges do hosts face?                  Traditional storage vendors                   Not always a fit for mass- ...
What challenges do hosts face?                  Infrastructure:                  Infrastr ct re                   Ability...
What challenges do hosts face?                  Billing:                  Billin                   New billing structures...
What challenges do hosts face?Support: Finding hiring training staff for cloud hosting services  Finding, hiring, “Suppo...
What challenges do hosts face?                  Cloud hosting business plan                                         plan: ...
Business plan – ARPU & Profits                      Host                      H                             $800          ...
Business plan – ARPU & Profits                   Host                   H                                                 ...
Business plan – higher entry barriers Hardware cost of bringing      Hardware cost of bringing  y  your first dedicated ...
Cloud – the end of overselling?                    Shared hosting:                    540 seat Jumbo jet = 700 passengers ...
What does the future hold?
Cloud – 3 phases1.1 The Cloud is cool and sexy  •   High margins, high conversions, low CPAs2. The Cloud is commoditized  ...
How will hosts compete? De-commoditize the cloud offer Add value with partner deals Target specific niche markets
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 ...
Thanks!    Ditlev Bredahl, CEO, OnApp                  ,    ,    pp@ ditlev              linkedin.com/in/ditlevditlev@onap...
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On app Ditlev Bredahl

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Transcript of "On app Ditlev Bredahl"

  1. 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. 2. What is OnApp? Cloud deployment & management p y g software for hosting providers
  3. 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. 4. Company info 45+ employees in US and EU 45,000+ servers deployed 100+ client clouds deployed Adding ~1 cloud per day
  5. 5. So, what have we learned... …from 100+ cloud deployments ?
  6. 6. Vendor & analyst chatter EC2 Azure Cloud OS Interoperability I bili Cloudware Cloud Oriented Architecture Portability Cloud Storage Consumption Based Pricing
  7. 7. This is what they’ll tell you…
  8. 8. They’ll tell you that it is very expensive…
  9. 9. Or very complicated… = =
  10. 10. That it will solve all problems
  11. 11. Or that cloud is just the same old same old…
  12. 12. What we thought hosts cared about  Security I t Interoperability bilit  Compatibility
  13. 13. What hosts actually care about  Low entry costs  Ti Time t market to k t  Density/profitability
  14. 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. 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. 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. 17. What challenges do hosts face? Billing: Billin  New billing structures  Charging per hour per minute hour,  Or should they?
  18. 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. 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. 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. 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. 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. 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??
  24. 24. What does the future hold?
  25. 25. Cloud – 3 phases1.1 The Cloud is cool and sexy • High margins, high conversions, low CPAs2. The Cloud is commoditized • A CPU is a CPU is a CPU = transparency = price erosion • Focus on de-commoditizing your offering gy g3. The Cloud is no longer the cloud • I’ h It’s how stuff i d ff is done…
  26. 26. How will hosts compete? De-commoditize the cloud offer Add value with partner deals Target specific niche markets
  27. 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
  28. 28. Thanks! Ditlev Bredahl, CEO, OnApp , , pp@ ditlev linkedin.com/in/ditlevditlev@onapp.com facebook.com/ditlev
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