Develop a Successful Virtual Private Server Profit Model


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  • VPS Platforms: Which one is right for you? Beginning Considerations: Where are you now and where you want to go Building a Plan Base: What do you your customers want? Associated Costs: What’s needed? Physical hardware, support systems, training, advertising What to Expect: You planned, you built, and you promoted… now what?
  • A brief review of virtualization: A virtual server contains virtual environments (ghost machines) which share hardware resources with other virtual environments on the same physical server (hardware node). Virtual servers reduce costs for Web hosts and end users by reducing the amount of hardware needed to support client websites and applications.
  • Is it right for your customers? Have your current customers requested a better hosting solution? Have you identified customers that would benefit from this solution? What is it exactly that your customers need?
  • Other Platforms: There are other virtualization platforms out there that don’t hold a large part of the market. Depending on your preference, you can choose from platforms with different host processors, operating systems, and speed of operation. Research is key; use the Web to find out about the various platforms and companies:
  • Microsoft Virtual Server runs on Windows Server 2003. This is primarily a Windows-based virtualization solution. The latest version, R2, includes Linux guest operating system support. Virtual server enables migration of legacy operating systems, e.g. Windows NT 4.0 and Windows 2000 Server. Virtual machines can be moved from one physical node to another. Minimal downtime is required to move a virtual environment from one physical node to another. Resources such as CPU, memory, networks and storage can be added to a virtual environment while it is running. Provides support for 64-bit guests, allowing for more memory intensive applications to be run in a virtual environment. Provides support for multiple CPU resources to a single virtual environment.
  • Xen 3.0 , when running on the latest generation of chips from Intel and AMD, both of which have hardware extensions that better support virtualization, can run unmodified operating systems. In particular, this means that Xen 3.0, operating on machines with these chips, can host Windows guest systems. Each guest operating system must be explicitly modified (ported) to run with Xen. This updates the operating system to be directly compatible with Xen, decreasing the amount of work Xen needs to do to interact with the operating system and therefore increasing the performance. Xen supports many mainstream Linux distributions like Red Hat, SuSE and Debian (along with many others as well). Xen has a base operating system running on the server that controls the virtual environments, each of which can run its own operating system similar or different than the base operating system. Xen allows for “seamless” migrations of virtual environments from one physical node to another.
  • VMware Inc. , a wholly owned subsidiary of EMC Corporation, is a major vendor of virtualization software for x86-compatible computers, including VMware Workstation and the freeware VMware Server and VMware Player. Each virtual machine is configured to see the same hardware and therefore the same drivers. The hardware node needs to only manage one set of drivers and hardware, which makes each virtual machine uniform and simplifies the work of the hardware node. VMware ESX runs its own operating system, which allows for increased performance. Operating systems for each virtual environment is installed on top of it. This allows for both Windows and Linux based-operating systems to exist as virtual machines. With VMotion, virtual environments can be moved from one hardware node to another while running, preventing any downtime.
  • Virtuozzo captures the state of an existing virtual environment and migrates it to a new physical server without any interruption in service or availability. Virtuozzo enables administrators to define many processing parameters to very precisely define a virtualized server's performance. SWsoft leverages the Windows operating system already loaded on the server. It can run multiple virtual servers without the need to pay for extra OS licenses because each virtual server links to the OS on the physical server. Virtuozzo also supports any hardware that Windows supports, including up to eight-way and 16-way servers and as much as 64 Gbytes of RAM.
  • The 80/20 Rule
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  • Develop a Successful Virtual Private Server Profit Model

    1. 1. Develop a Successful Virtual Private Server Profit Model Platform, Plans, and Pricing Presented by Lou Honick CEO
    2. 2. Information Summary <ul><li>Beginning Considerations </li></ul><ul><li>VPS Platforms </li></ul><ul><li>Building a Plan Base </li></ul><ul><li>Pricing & Associated Costs </li></ul><ul><li>What to Expect </li></ul>
    3. 3. Why Customers Want VPS <ul><li>Is VPS right for your customers </li></ul><ul><li>Increased control vs. shared hosting </li></ul><ul><li>Complete isolation </li></ul><ul><li>An alternative to a dedicated server without the cost </li></ul>
    4. 4. Market Strategy <ul><li>Mass market and volume vs. higher end plans </li></ul><ul><li>Entry point to dedicated hosting </li></ul><ul><li>Customer acquisition plans </li></ul><ul><ul><li>Market to your own customers vs. </li></ul></ul><ul><ul><li>Market to prospects </li></ul></ul>
    5. 5. <ul><li>Choose your VPS technology </li></ul><ul><li>A brief review of the more popular platforms: </li></ul><ul><ul><li>MS Virtual Server </li></ul></ul><ul><ul><li>Xen </li></ul></ul><ul><ul><li>VMware </li></ul></ul><ul><ul><li>Virtuozzo </li></ul></ul>VPS Platforms
    6. 6. VPS Platforms <ul><li>MS Virtual Server </li></ul><ul><ul><li>Migration of VEs cause minor downtime </li></ul></ul><ul><ul><li>Version 2005 R2 supports Linux guest OS </li></ul></ul>Image Source:
    7. 7. VPS Platforms <ul><li>Xen </li></ul><ul><ul><li>Allows for &quot;seamless&quot; migration of VEs </li></ul></ul><ul><ul><li>Each VE OS must be ported to run with Xen </li></ul></ul>Image Source:
    8. 8. VPS Platforms <ul><li>VMware ESX Server </li></ul><ul><ul><li>Allows for migration of VEs without downtime </li></ul></ul><ul><ul><li>VMware runs it's own OS – VE OSs are installed over the host OS </li></ul></ul>Image Source:
    9. 9. VPS Platforms <ul><li>Virtuozzo </li></ul><ul><ul><li>Allows for migration of VEs without service interruption </li></ul></ul><ul><ul><li>Each VE OS links to the host OS </li></ul></ul>Image Source:
    10. 10. Market Growth <ul><li>An example: Virtuozzo </li></ul><ul><ul><li>Over 60% of Plesk licenses sold are virtualized as compared to less than 30% 12 months ago </li></ul></ul><ul><ul><li>Rate of Virtuozzo licenses shipped increased 7x from 12 months ago and 50x from 24 months ago </li></ul></ul><ul><ul><li>Over 20,000 Virtuozzo partitions were sold in Feb 2006 as compared to 10,000 sold in Feb 2005 </li></ul></ul>Source: Serguei Beloussov, SWsoft
    11. 11. Plan Right for Success <ul><li>Staffing </li></ul><ul><ul><li>Plan for the necessary manpower at each step </li></ul></ul><ul><ul><li>Identify how much staff training is needed </li></ul></ul><ul><li>Infrastructure </li></ul><ul><ul><li>Assess the state of your current infrastructure </li></ul></ul><ul><ul><li>How your internal systems are set up determines your plan capabilities </li></ul></ul><ul><ul><li>Identify new systems to put in place if any </li></ul></ul>
    12. 12. Plan Right for Success <ul><li>Budget limitations </li></ul><ul><li>What are the necessities to offer? </li></ul><ul><ul><li>Control Panels </li></ul></ul><ul><ul><li>Spacing </li></ul></ul><ul><li>Beta testing strategies </li></ul>
    13. 13. Configuring Your Plans <ul><li>How many plans are right? </li></ul><ul><ul><li>Having several plans gives customers options </li></ul></ul><ul><ul><li>Consider upsell opportunities </li></ul></ul><ul><ul><li>Preparing your infrastructure will determine plan constraints </li></ul></ul><ul><li>Be aware of… </li></ul><ul><ul><li>Server limitations, staff limitations </li></ul></ul><ul><ul><li>Customer wants and needs </li></ul></ul>
    14. 14. Identify Costs & Set the Price <ul><li>Infrastructure </li></ul><ul><ul><li>Servers and other hardware </li></ul></ul><ul><ul><li>White box vs. name brand servers </li></ul></ul><ul><li>Requirements </li></ul><ul><ul><li>Acquiring initial technology software, licenses </li></ul></ul><ul><ul><li>Plan configurations determine continual software and license costs </li></ul></ul><ul><ul><li>Resources to prepare, train, and rollout the solution </li></ul></ul>
    15. 15. Identify Costs & Set the Price <ul><li>Define the parameters of each plan </li></ul><ul><li>Identify what the real costs are for those plans </li></ul><ul><li>Beware of falling into the ‘overselling’ trap </li></ul>
    16. 16. What to Expect <ul><li>The Good </li></ul><ul><ul><li>Current customer conversion </li></ul></ul><ul><ul><li>New market of prospects </li></ul></ul><ul><li>The Bad & The Ugly </li></ul><ul><ul><li>Growing pains are inevitable </li></ul></ul><ul><ul><li>Support staff learning curve </li></ul></ul><ul><li>Know what can go wrong </li></ul><ul><ul><li>What have you learned from other product rollouts? </li></ul></ul>
    17. 17. Topic Review <ul><li>Planning thoroughly is key </li></ul><ul><li>Do your research when selecting a platform </li></ul><ul><li>Understand what your customers want and make sure you can support it </li></ul><ul><li>Know what costs to expect and how to control them </li></ul><ul><li>Be prepared to refine as you go </li></ul>
    18. 18. Thank you for attending! [email_address] 302.224.3987