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Cloud Hosting: Lessons from the trenches

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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
    @nullmind
    linkedin.com/in/carlosrego
    carlos@onapp.com
    facebook.com/carlos.rego
  • 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
    EC2
    Azure
    Cloud OS
    Cloudware
    Interoperability
    Cloud Oriented Architecture
    Cloud Storage
    Portability
    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?
    Storage:
    • #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?
    Infrastructure:
    • Ability to use existing infrastructure
    • Capitalizing on depreciated hardware
    • Ability to mix ‘old’ & new gear
  • What challenges do cloud hosts face?
    Billing:
    • New billing structures
    • Charging per hour, per minute
    • Or should they?
  • What challenges do cloud hosts face?
    Support:
    • 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 <<
    Host
    Client
  • 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
    Underselling??
  • 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
    @nullmind
    linkedin.com/in/carlosrego
    carlos@onapp.com
    facebook.com/carlos.rego