flexiant and 451 research discuss the service provider path from vps to iaas

www.flexiant.com © 2013 Flexiant Ltd

VPS and Beyond: The Service Provider Path from VPS to IaaS


Liam Eagle Analyst- Internet Infrastructure

451 Group

Joe Sherman Digital Marketing Manager Flexiant

Tony Lucas SVP Product & Founder

Flexiant


Cloud Orchestration Software European, Offices in London, Edinburgh, Amsterdam, New York Started as a Hosting Company Launch Europe’s first cloud services company 100+ Customers


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to create, sell and manage your cloud services


VPS and Beyond Series

Ø  VPS and Beyond Part 1:

Why Moving to an IaaS Offering will Pay Dividends

Ø  VPS and Beyond Part 2: Why IaaS will Solve Problems Beyond VPS

VPS and Beyond: The Service Provider Path from VPS to IaaS

Liam Eagle

The 451 Group Today

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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

Cloud As-‐A-‐Service Taxonomy

Cloud Market EvoluKon

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 m

illions of U

S$

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

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

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.

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

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

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.

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.

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

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?

QuesKons? Comments? [email protected] @liam.eagle

www.flexiant.com © 2013 Flexiant Ltd 23

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flexiant and 451 research discuss the service provider path from vps to iaas

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