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Cloud Hosting: Lessons from the trenches

Cloud Hosting: Lessons from the trenches



OnApp Keynote presented at WHD 2011 by OnApp CVO Carlos Rego

OnApp Keynote presented at WHD 2011 by OnApp CVO Carlos Rego



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    Cloud Hosting: Lessons from the trenches Cloud Hosting: Lessons from the trenches Presentation Transcript

    • Lessons from the trenches(and how to build a profitable cloud hosting business)
      Carlos Rego, Chief Architect, OnApp
    • What is OnApp?
      Cloud deployment & management software for hosting providers
    • What does OnApp do?
      Commodity hardware
      Elastic cloud
      On demand resources
      End users
      VM Deployment
      VM Management
      VM HA/Failover
      User management
      Utility Billing
    • Company info
      50+ employees in US and EU
      Build as internal project for VPS.NET (UK2Group)
      60,000+ VMs live on OnApp
      120+ client clouds deployed
      Adding 1-3 clouds per day
    • With OnApp you…
      Get online in less than 48 hours
      Use your existing hardware
      Get the first 100 cores for free
      Only pay $10/core after
      Get free 24/7 support
      Are fully integrated with WHCMS/UBER/Hostbill
    • What is OnApp?
      Cloud Deployment Scenarios
    • Different deployment scenarios
      By-the-hourpublic cloud hosting
      Cloud VPS hosting
      All working out of the box…
      Hybrid cloud hosting
      Private Clouds
    • By-the-hour cloud hosting
      • Sell Virtual Machines to customers who pay hourly for cloud resources
      • Set different prices for RAM, CPU and storage (incl. IOPS), VMs, IPs etc.
      • Set up different availability zones with different pricing
      • Competing with AWS/Rackspace
    • Cloud VPS hosting
      • Group cloud resources into nodes that you can sell on a monthly plan basis
      • Your customers use nodes as the building blocks for their VMs
      • The node-based approach makes cloud hosting extremely simple for end users
      • Competing with VPS.NET/Slicehost/Linode
    • Hybrid cloud hosting
      • Allocate hypervisors on a 1:1 basis: each customer gets a dedicated hypervisor for their hosted service, centralized storage
      • Failover is provided by the rest of the cloud (for example, one HV might act as failover for 5 "live" HVs)
      • Competing with SingleHop/StormOnDemand/Iweb
    • Virtual private clouds
      • You can group hypervisor, network and storage resources into a single private cloud resource
      • Customers get all the benefits of a private cloud, backed by the resources of the whole cloud
      • This brings the cost of private clouds down for customers, too
      • Compete with the likes of Amazon Web Services...and enterprise service providers
    • So, what have we learned...
      …from 100+ cloud deployments ?
    • Vendor & analyst chatter
      Cloud OS
      Cloud Oriented Architecture
      Cloud Storage
      Consumption Based Pricing
    • This is what they told us…
    • 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
      • Interoperability
      • Compatibility
    • What hosts actually care about
      • Low entry costs
      • Time to market
      • Density/profitability
    • What challenges do cloud hosts face?
      • #1 concern
      • 100+ clouds, close to 50 different storage configs
      • Ability to use multiple tiers of storage
      • Billing for IOPS
    • What challenges do cloud hosts face?
      Traditional storage vendors
      • Not always a fit for mass-market hosts
      • The industry is crying out for storage innovation
    • What challenges do cloud hosts face?
      • Ability to use existing infrastructure
      • Capitalizing on depreciated hardware
      • Ability to mix ‘old’ & new gear
    • What challenges do cloud hosts face?
      • New billing structures
      • Charging per hour, per minute
      • Or should they?
    • What challenges do cloud hosts face?
      • Finding, hiring, training staff for cloud hosting services
      • “Support us like we support our clients”
    • What challenges do cloud hosts face?
      Cloud hosting business plan:
      • Hosts need to pay attention to their cloud business strategy
      • ...even more so than usual
    • Business plan – ARPU & Profits
      With the cloud:
      Potential revenue/cab increases – at a higher margin too – BUT with lower ARPUs
      >> KEEP AN EYE ON CPAs <<
    • Business plan – higher entry barriers
      • Hardware cost of bringing your first dedicated server client live: $2,500
      • Hardware cost of bringing your first cloud server client live: $25,000
    • 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
    • What does the future hold?
    • OnApp New Features…April 14th
      • Autoscaling
      • Let client VMs scale up and down (and out) automatically
      • Firewalls
      • Control a VM’s firewall settings from the GUI
      • Very granular metering, tiered storage and IOPS billing
      • Loadbalancers
      • Offer your clients free Loadbalancer.org VMs (£995 value). Fullyintegrated in GUI
      • SSLs
      • Offer your clients free Globalsign SSL certs for 1 year. One-Click-Installs!
    • Cloud – 3 phases
      The Cloud is cool and sexy
      • High margins, high conversions, low CPAs
      2. The Cloud is commoditized
      • ACPU is a CPU is a CPU = transparency = price erosion
      • Focus on de-commoditizing your offering
      3. The Cloud is no longer the cloud
      • It’s how stuff is done…
    • How should cloud 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 might think
      • The time to act is now – late arrivalswill face a much tougher market
    • Thanks!
      Don’t be a stranger