hostingcon 2011 cloud and cdn. whats stopping you?
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HostingCon 2011
Cloud and CDN. What’s stopping you?
Ditlev Bredahl, CEO, OnApp
@ditlev linkedin.com/in/ditlev
facebook.com/ditlevditlev@onapp.com
Been in the hosting biz since ’96 Last 6 years as CEO of UK2Group Build several large hosting brands:
VPS.NET, 100tb.com, Resell.biz and others.
Made 10+ acquisitions in the industry Been through 3 hosting exits
Latest one UK2Group sold for ~$77 million
Now founder and CEO of OnApp.com Largest provider of cloud software to the hosting industry.
As of Monday, the largest CDN federation
Ditlev Bredahl
OnApp
…OnApp?
About OnApp
Software for hosts
OnApp launched July 1st 2010
300+ clients
80+ employees in US, EU, APAC
2+ clouds per day
400+ clouds deployed
The Cloud and CDN market… What are you missing out on? Is it too late? Who has done well, and why? What should you consider before launching
yours?
And this morning…
Cloud
IaaS market is $3.7bn in 2011, and Gartner estimates $10.5bn in 2014.
Demand that is growing (probably faster than supply)
Much higher conversion rate – and lower CPC/CPA’s
Higher net margins than shared/dedicated Lower capex requirements than dedicated Lower churn than your shared/dedicated
market 33k hosters world wide – but less than 1000
public clouds (T1R/451Group)
What are you missing out on?
The numbers stack up...
$10,080
$35,640
$8,030
$33,391
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Dedicated Cloud
Monthly revenue Gross prof it
300
100
300
99
$0
$100
$200
$300
$400
$500
$600
$700
$800
Dedicated Server Cloud Server
WebServer 1 WebServer 2 Load balancer
Host Client
Gold rush
The longer you wait...3 phases
Commoditization
Decommoditization
2010-12 2012-14 2015
Cloud is no longer the cloud but Just how stuff’s done
Margin for early (and smart) adopters
So, there is a window now, where CPA’s are low, margins are high and clients are plenty
…but it will commoditize soon
Now is the time…
So now is the time to get started!
What market and segment are you selling to? Tech/Mass market/Niche? (examples to come)
What brand will you be using? Is your own brand sexy enough?
What are your clients willing to pay for? SAN/redundancy/etc
What platform will power your cloud? When do you want to go live?
At what level will your expertise start?
So, what to consider ?
Where can you add value?
Build vs Buy
De-commoditiz
e
Strong growth Good understanding of their clients Taken the first steps towards de-
commoditization Not only fed by existing client bases…
Who has done well…
So what’s stopping you?Why are there less than
1000 public clouds online?
Maybe it’s the business plan?
Shared hosting: 540 seat Jumbo jet = 700 passengers
Dedicated server hosting: 540 seats = 540 passengers
Underselling – learn how to monetize spare capacity!
Cloud hosting:540 seats = 4-500 passengers
Lack of time?
Or is it a simple...
CPAs & margins Commoditization The gold rush has
already started
Time is of the essence
Choose a vendor/partner that: Understands your pressures as a host
Can help you overcome technical issues
Can advise on best practise
Most importantly, MAKE the time To sort out your deployment
And reap the rewards
...the harder it will be
How can OnApp help?
How can OnApp help?
VM DeploymentVM ManagementVM HA/FailoverAutoscaling/LB
User managementUtility/billing
Commodityhardware
Cloudinfrastructure
On-demand resources
Endusers
Low set-up cost 24 hour
deployment
• Free support & integration• Designed for hosters
How can OnApp help?
Rapid time to market
24-hour deployment
Billing integration
Free support
Very low entry costs
Commodity hardware
Monthly license
Free first year
High density design
Optimal hardware use
VLAN management
Maximum flexibility
How can OnApp help?
Multi-hypervisor support
Automatic failoverMulti-platform/OS/cloud
Customer Isolation Module
How can OnApp help?
Customizable CP Huge VM template library
iPhone appBilling integration
CDN
CDN market
$2.6bn market currently
Very consolidated
Akamai sitting on 60%
3 largest players on 75%
No significant “jet-blue” player, it’s all AA/Business class
No real disruption
CDN market
Top Ten CDNs by Revenue, Q3 2010 ($000)
Not a functional marketplace!
Another touchpoint Clearly attractive to
customers Still High margin Very sticky, as any DNS
based product
The value of CDN for hosters
CDN’s – enterprise only?
CDN has not taken off in the mass market because: There are not many CDN providers
None of them has a mass market focus
They base a great deal of their business plan on ‘professional services’ and enterprise features
Their pricing is complicated, setup is difficult and USPs are enterprise focused
This is basically like ‘the cloud’ in 2008 – and we think the real market is much larger than the $2.6bn
A huge window of opportunity
So what’s stopping you?
CDN and mass-market hosts
Most hosts have not setup CDNs: Infrastructure CAPEX is very high
There is no turnkey CDN software
Client deployment is very complicated
Ongoing management is very demanding
Got $5-50 million spare?
How can OnApp help?
Changing the CDN status quo
We have introduced a CDN software service stack that will enable any host to deploy a powerful (but simple) CDN service with more than 50 PoPs in less than an hour…without spending a penny.
How we will do it
By introducing 3 new concepts
OnApp CDN FederationMarketplace for hosts to buy & sell CDN capacity
OnApp CDN StackFully-featured edge server platform
OnApp CDNaaSGlobal Anycast DNS service for OnApp CDN
CDNaaS
What is OnApp CDN as a Service?
A fully-managed CDN business in a box: A managed core Anycast DNS setup that will
ensure visitors always are sent to the closest edge PoP
Fully hosted, secured and managed by OnApp
A granular user management system that handles admins, resellers, end users/clients etc
A fully integrated CDN billing engine (WHMCS/Ubersmith/HostBill)
OnApp CDNaaS
Chief cost of building a CDN is the core infrastructure Hosts connect to OnApp’s CDN network to
replicate/cache their content globally Extremely rapid CDN deployment without CAPEX
OnApp CDN Stack
What is the CDN cloud stack?
An edge server image that can be installed in any OnApp cloud with a few clicks
It’s integrated with OnApp CDNaaS, and handles: Pull (large/small files)
Push
Streaming
Live streaming
It allows for dedicated local CDN storage partitions (SSDs for small files etc)
How is it integrated with OnApp?
CDN Cloud Stack is an optimized CDN edge server image (OnApp template)
It is deployed via the OnApp GUI, and instantly activated as an edge server communicating with the OnApp CDNaaS
It scales automatically up/down as needed
OnApp CDN Federation
What is the CDN Federation?
The CDN Federation is a marketplace inside OnApp where hosts can buy and sell CDN edge resources
It is fully automated and delivery is instant
Suppliers are manually verified and core KPIs are listed (uptime/speed/server specs/etc)
There are no minimum purchase commitments (CDRs)
OnApp CDN Federation
End user makes content request to (eg) VPS.NET Receives content from closest federated provider (eg Dediserve) Transparent to the user: OnApp controls underlying CDN network Federation agreement between OnApp-powered providers
Uses spare cloud capacity
No infrastructure needed
Buy and sell CDN bandwidth
Monetize excess capacity
OnApp will pay clients, not the other way around…
Federated CDN for hosts
OnApp CDN FederationMarketplace for hosts to buy & sell CDN capacity
OnApp CDN StackFully-featured edge server platform
OnApp CDNaaSGlobal Anycast DNS service for OnApp CDN
Cloud and CDN markets are great, undersupplied, low entry cost markets
They will commoditize like the rest of our industry
Time to act is now (OnApp can help)
Recap
Thanks!
Ditlev Bredahl, CEO, OnApp
@ditlev linkedin.com/in/ditlev
facebook.com/ditlevditlev@onapp.com
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