Flexiant and 451 Research Discuss the Service Provider Path from VPS to IaaS

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Liam Eagle, analyst at 451 Research Group covering the Internet infrastructure business, joins Flexiant Founder and Product Champion, Tony Lucas in a presentation that explored the strengths and benefits of moving from VPS to an IaaS platform.

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Flexiant and 451 Research Discuss the Service Provider Path from VPS to IaaS

  1. 1. www.flexiant.com© 2013 Flexiant LtdVPS and Beyond:The Service Provider Path from VPS to IaaS
  2. 2. www.flexiant.com© 2013 Flexiant LtdLiam EagleAnalyst- Internet Infrastructure451 GroupJoe ShermanDigital Marketing ManagerFlexiantTony LucasSVP Product & FounderFlexiant
  3. 3. www.flexiant.com© 2013 Flexiant LtdCloud Orchestration SoftwareEuropean, Offices in London,Edinburgh, Amsterdam,New YorkStarted as a Hosting CompanyLaunch Europe’s firstcloud services company100+ Customers
  4. 4. www.flexiant.com© 2013 Flexiant Ltd
  5. 5. www.flexiant.com© 2013 Flexiant LtdThe onlycloud management software you needto create, sell and manageyour cloud services
  6. 6. www.flexiant.com© 2013 Flexiant LtdVPS and BeyondSeriesØ  VPS and Beyond Part 1:Why Moving to an IaaSOffering will Pay DividendsØ  VPS and Beyond Part 2:Why IaaS will SolveProblems Beyond VPS
  7. 7. VPS  and  Beyond:    The  Service  Provider  Path  from  VPS  to  IaaS  Liam  Eagle  
  8. 8. The  451  Group  Today  §  230+  Staff  §  One  company  with  5  business  lines  §  Syndicated  research,  cerKficaKon,  accreditaKon,  and  advisory  services  §  Global  Events  §  1,300+  client  organizaKons:  enterprises,  vendors,  service  providers,  and  investment  firms  §  Organic  and  growth  through  acquisiKon  
  9. 9. Agenda  Hos$ng  and  Cloud  Market  Data  VPS  and  IaaS  Capabili$es,  Market  Drivers  VPS  and  IaaS  Opportuni$es,  Use  Cases  IaaS  Hos$ng  Market  Strategies  Service  Provider  Recommenda$ons  
  10. 10. Cloud  As-­‐A-­‐Service  Taxonomy  
  11. 11. Cloud  Market  EvoluKon  
  12. 12. Global  HosKng  Market  vs  Cloud  Source:  451  Research  Market  Monitor  (Data  Cut  5/14/13)  $0  $5,000  $10,000  $15,000  $20,000  $25,000  $30,000  $35,000  $40,000  2010   2011   2012   2013   2014  Infrastructure  as  a  Service   $680     $1,495     $2,772     $4,001     $5,486    Dedicated  HosKng   $3,078     $3,257     $3,490     $3,787     $4,177    Managed  HosKng   $12,808     $15,524     $18,839     $22,908     $27,983    in  millions  of  US$  
  13. 13. Key  CapabiliKes,  Demand  Drivers  for  VPS  and  IaaS  Virtual  Private  Server  Resource  and  performance  upgrade  versus  shared  hosKng    Infrastructure  as  a  Service  Pay  per  use  compute  and  storage  resources  Root  access,  pla^orm  control    Cost  conscious  alternaKve  to  dedicated  server  infrastructure    VerKcally  (automaKcally)  scale  instances  up  and  down  API  control  Availability,  fault  tolerance  
  14. 14. VPS  and  IaaS  Customer  Use  Cases  Virtual  Private  Server  Web  server    Infrastructure  as  a  Service  Website  pla^orm  Mail/DNS/IRC/Game  etc.  server    File  share  /  seedbox    Remote  computer  /  desktop  Hobbyist  /  sandbox  use  Scalable  app  back-­‐end  Cloud  storage  Disaster  recovery  Batch  processing  Big  data  Test  /  dev  
  15. 15. The  AppeKte  for  VPS  HosKng  is  Ongoing  •  Worldwide  VPS  market  conKnues  to  grow,  due  to  a  variety  of  factors  •  VPS  growth  in  2013  and  2014  to  outpace  mass  market  hosKng  growth,  with  Y/Y  growth  of  17%-­‐18%  •  Global  monthly  Google  searches  for  “VPS”  are  1.5  million  •  However:  price  pressure  and  commodiKzaKon  are  major  forces  in  the  VPS  space.  
  16. 16. Service  Provider  Business  Case  for  IaaS  •  Don’t  compete  with  AWS  for  market  share  •  Winning  IaaS  business  of  exisKng  customers    •  Workload-­‐appropriate  services,  hybrid  opportunity  (Best  ExecuKon  Venue)  •  DifferenKator,  upgrade  path  versus  exisKng  compeKKon  •  Increased  customer  spend  without  major  purchase  decision  •  API  encourages  customers  to  put  whole  applicaKon  on  your  infrastructure  •  Fixed  resources  at  monthly  rate,  with  potenKal  to  scale  •  Enabler  of  other  services  –  applicaKon  marketplace  •  Higher  margins  on  applicaKons/services  than  raw  infrastructure  
  17. 17. The  QuesKon  of  Cloudwashing  •  DecepKve  rebranding  of  exisKng  services  as  “cloud”  •  TemptaKon  among  hosKng  providers  to  posiKon  virtualized  server  resources  as  “cloud  servers”  (VPS  +  SAN)  •  Follows  markeKng  trends,  but  ignores  real-­‐world  customer  and  product  issues  •  PosiKons  product  to  fail  by  aoracKng  customers  with  implicit  promise  of  specific  funcKonality  it  can’t  deliver  •  Ignores  the  ongoing,  exisKng  market  for  VPS  as-­‐is  •  Generally  short-­‐sighted;  bad  business  
  18. 18. Opportunity:  the  ApplicaKon  Marketplace  •  App  catalogs  and  marketplaces  meet  the  need  for  simplicity  in  delivery.  •  One-­‐stop-­‐shop  for  purchasing  applicaKons  and  the  resources  to  power  them.  •  One-­‐click  install  of  a  popular  applicaKon  is  a  driver  of  IaaS  consumpKon.  •  This  model  is  being  adopted  across  the  board,  from  AWS  to  web  hosts,  MSPs,  Sis  and  SaaS  companies.  
  19. 19. From  VPS  to  IaaS;  Bridging  the  Gap  •  Customers  seeking  VPS  may  not  be  recepKve  to  IaaS  or  cloud  servers  •  Focus  on  selling  them  the  disKnct  advantages  of  VPS  •  Win  VPS  customers  onto  your  pla^orm,  and  manage  their  transiKon  to  cloud  services  •  IaaS  products  can  be  packaged  to  meet  the  predictable-­‐cost  or  resource  requirements  of  VPS  customers.  
  20. 20. RecommendaKons  for  Service  Providers  •  It  is  early  innings  for  cloud,  but  the  opportunity  is  large  •  Don’t  target  big  public  clouds  with  a  “me  too”  IaaS  product  •  Target  exisKng  customers,  build  to  your  strengths  (support)  •  Emphasize  workloads  and  Best  ExecuKon  Venue;  hybrid  service  model  •  Add  value  via  services  •  eg.  Backup,  DR,  security,  VDI  •  ApplicaKon  marketplace  and  one-­‐click  install  •  IaaS  is  not  necessarily  a  replacement  for  VPS  today  •  Win  VPS  customers,  lead  them  to  IaaS  •  SMB  customers  care  about  availability,  cost,  simplicity  and  security  •  End  users  are  concerned  about  runaway  costs  –  provide  predictable  pricing  models  and  tools  for  managing  spending  and  costs    
  21. 21. HosKng  Provider  IaaS  ConsideraKons  •  Build,  buy,  partner,  syndicate?  •  Pla^orm  choices    •  Commercial  vs  open  source  •  CompaKbility,  standardizaKon  •  User  interface  (new  or  exisKng)  •  IntegraKon  challenges  (pla^orm,  billing,  interface)  •  Service  startup  costs  –  hardware/sorware/staffing  •  Skills  gap  –  building  in-­‐house  experKse  •  What’s  your  strategy  for  differenKaKon?  •  How  do  you  make  IaaS  a  higher-­‐margin  service?  
  22. 22. QuesKons?  Comments?  liam.eagle@451research.com  @liam.eagle  
  23. 23. www.flexiant.com© 2013 Flexiant Ltd23Thank you forwatching!Please visit our learning centrefor more resources:http://www.flexiant.com/learning-centre/Contactjsherman@flexiant.com if youhave any further questions

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