Laurent Lachal, Senior Analyst, Software – IT Solutions

In February 2013, Amazon Web Services (AWS) launched the beta version of AWS OpsWorks, a configuration and deployment service for AWS public cloud-based applications and their related resources. While AWS usually creates its services from scratch, OpsWorks is based on third-party technology, namely the open source Chef-based SaaS offering, Scalarium, developed by Peritor, a small Germany-based IT service provider that AWS acquired in 2012.

OpsWorks reflects the increasingly important role of cloud computing-driven infrastructure-as-code/DevOps practices. It is a good, albeit rather limited to date, step forward that will help some AWS customers and partners to remain in control of their AWS public cloud-based solutions.

On the other hand, it is not nearly as threatening to some of AWS’s partners that many claim. In a recent report entitled Amazon Web Services’ OpsWorks: Boosting Cloud Automation, Ovum provides a detailed analysis of its …

“The Nebula One delivers on Nebula’s mission to democratize cloud computing by bringing the simplicity, agility, and operational efficiency of the world’s largest Internet companies to all enterprises at a fraction of the cost of public cloud services,” said Chris C. Kemp, co-founder and CEO of Nebula, as Nebula today announced the general availability of Nebula One, which the company describes as “the world’s first enterprise cloud computer.”

The Nebula One private cloud system aims to free the organization to focus on applications instead of infrastructure.

read more

by Adam Bogobowicz, Senior Director of Product Marketing for Service Providers, Parallels

 

One can learn plenty from good advice but nothing is a better teacher than a respectable failure. I was talking about it with my colleagues, Michael Fountain (mfountain@parallels.com) and Alex Goncharov (alex@parallels.com) who are 10+ year veterans of the hosting industry, and we decided to compile a list of reasons for why good (small) hosting companies fail with some tips on how to avoid it with your own business. We know that this list is far from comprehensive, so if there is a lesson that you would like to share with fellow hosters please comment on the blog on this site or send us e-mail. And of course if you lived through one of these disaster scenarios yourself, please share it with the world.

 

They gave it away for free in the hope of making it up in volume

 

There are a few well-funded hosting companies, still in business, which tried this strategy. Some of them do get lucky and if you think about Facebook – very lucky! But if you are starting out and are funded with your savings, credit card and your folks’ money, you would be surprised how quickly these funds evaporate if you give your services away for free. On the other hand, if you just got funded $40M by venture capital to give away your services, enjoy it, but plan to sell your business before the cash runs out.

Quick Tip: If you are interested in how to make Freemium model work please read my previous related blog at http://blogs.parallels.com/serviceprovider/2013/2/6/now-you-can-have-your-website-and-eat-it-too.html

 

They paid more to acquire a customer (ads &/or affiliate commissions) than the customer’s Life Time Value

 

This is a less over-the-top case than the one above and is driven by focusing on wrong measures for the business or just ignoring the financials of the business. I have seen an extreme case of this miscalculation with a company that was willing to pay 10 times Life Time Customer Value to acquire new customers. It was done in the spirit of hoping to make up the difference in the future, but with even most basic financial calculation it quickly appeared to be as problematic as a Madoff-style pyramid scheme.

Quick Tip: Some providers can pay a lot more for customers’ clicks because they upsell customers with value-add services (Internet connectivity, e-commerce packages, web design, system administration services etc.) This is why, for example, cost-per-click for hosting related keywords can go as high as $25 per click. If, however, your conversion rate is only 10%, your per customer acquisition cost will be $250, which is too high for the majority of hosting companies. Investing in lower frequency, local, niche keywords and focusing on Search Engine Optimization could help to resolve this issue.

For more information on Customer Life Time Value concept you can read this blog http://blogs.parallels.com/serviceprovider/2013/3/11/understanding-hosting-marketing-measures.html

Their customer on-boarding process took too long

 

Customers today are used to instant gratification when they make a purchase online. They expect the next screen they see to be the one that holds the information telling them what they just purchased. If you take 24 hours to process an order, you may think that’s reasonable, but it’s not. Automation is your friend. Use it. Also, don’t make your customers tell you their life story. Stop asking for a fax number! When is the last time you used a fax machine to process an order? The more things you ask for on your order form, the more time your customers spend thinking about if they really want your service or not. Don’t make them think that hard.

Quick Tip: Asking customers to provide simple contact information (Name, Phone, Email) in the beginning of purchase process and immediately posting it to your CRM is a very good idea. You can call every customer who did not complete the purchase in minutes and help them to finish the purchase. Also customers are willing to provide more information once they have paid for your order.

They got bad a support reputation

 

I personally know many hosters who put a phone number on their site and then don’t answer the phone. Do not get a bad support reputation – it will kill you. People talk and when they do, they like to acknowledge other people’s mistakes. So, don’t put a Twitter handle on your site if you are not setup to respond to customer tweets within 30 minutes! Set expectations early and set expectations often. If you mess up and it becomes public, then resolve it publically. Your customers are watching.

Quick Tip: Use virtual phone system. You will be surprised how affordable their fees are. For example http://mightycall.com is less than $10/month.

Fraud got their merchant account shut down

 

Let’s face facts…if you sell services online, you will be the victim of fraud sooner rather than later. Automation is great, but it must be done in a way that lowers your risk to fraudulent transactions. Not implementing any fraud prevention measures is a guaranteed way to get your merchant account or credit card process account terminated due to too many fraudulent transactions that result in charge backs. And this is not a rare scenario. Anybody who has been in this industry a few years knows a business that faced this problem. 

Quick Tip: One of the ways to deal with this problem is to use a hosting automation system that comes with large number of Fraud Screening tools, flexible manual approval rules and support for PREAUTH, also well known as “Authorization Hold” credit card processing. With Preauth processing your hosting automation captures the funds and waits for you to approve it manually after looking at and considering all the information from Fraud Screening tools.

They didn’t know how to reboot a server without a control panel

 

Hosting is a business with minimum technical skill requirement. This problem (not having technical chops to run a hosting business) is a fairly recent phenomenon because as hosting technology gets simpler, many new hosters come into this industry without a deeper understanding of the underlying hosting technology. We have seen over the last two years quite a few startup hosting companies without Linux or Windows admin skills that got themselves in serious trouble when technical issues outside of the panel happen to their business… and problems do happen… just ask a hoster.

Quick Tip: Consider buying and using hosting infrastructure and automation products that come with unlimited support, such as Parallels Plesk Automation or make sure your support contract is 24×7, valid and active. If you cannot afford to hire a good system administrator right now, grow your own – gradually train and certify your support engineers, so they eventually will become very good system administrators with some practice. Many Software Vendors provide technical training for free or this can be negotiated during purchase. When Alex was managing his hosting business he managed to get MCSE training for all his support engineers sponsored by Microsoft for free. Did you know that you can have your engineers trained to manage Parallels Business Automation Standard for free?

The server was in a closet on a Comcast cable pipe

 

Ok, this one is just silly but you would not believe how common. I have seen desktop PC in the kitchen playing the role of a datacenter. I can understand this when hosting is done in a developing country where leasing a box is not an option, but if you choose to run your own servers instead of leasing from one of many infrastructure providers in US or Europe, you are wasting your money and asking for a disaster.

 

They thought that Excel was a wonderful billing automation solution

 

You would be amazed to see how many hosters are using Excel on their desktops to bill their customers… and when the hard drive fails they go out of business. Excel was OK for a small hosting business to keep track of customers, hosting plans, billing cycles, IPs, servers, when you had your first 10 customers, but eventually when your enterprise starts to grow, you sure need to move to a proper hosting automation and billing solution.

 

Quick Tip:  Automate your hosting business. Get hosting automation that provides full range of traditional hosting services right out of the box: domain registration, shared hosting (Linux/Windows), VPS hosting (Linux/Windows), Hypervisor-based VMs, dedicated servers, SSL certificates. Reconsider your .xls billing strategy and take a look at http://www.parallels.com/products/pba-standard/

If you were to ask EMC or VMware whom they consider their major threat and competition you’d be easily forgiven for being mistaken to think it was NetApp, HP or offerings such as Hyper-V. The current cloud era has undoubtedly been spearheaded by the likes of Google, Amazon and Facebook. It is here where EMC and VMware face their biggest challenge of remaining relevant and cutting edge in a market that demands automation, simplicity and speed of deployment.

read more

Today’s IT infrastructure is in the midst of a major transformation. In many ways, the data center is a victim of its own success. The growing number of technologies and applications residing in the data center has spawned increasing complexity, which makes IT as a whole less responsive and agile. While businesses are focused on moving faster than ever, large and complex infrastructure is inherently rigid and inefficient.
As a result, IT is moving outside the traditional data center into colocation facilities and cloud infrastructures – essentially Infrastructure Anywhere. The move to Infrastructure Anywhere is driven by the core objective of improving responsiveness and agility and reducing costs. For example, you can scale up resources through the cloud in minutes, not months. But for all of its benefits, this new Infrastructure Anywhere model presents critical challenges.
To make smart decisions about where to run applications and what kind of resources you need, you first must understand your workload: utilization, capacity, and cost. Gaining unified visibility is difficult when your application workloads are distributed across data centers and colocation facilities in different parts of the country or around the world. With limited visibility, how do you accurately align resources and capacity with workloads for efficient processing, cost control, and — more important — achieve the full business value of your IT investment?

read more

Six months ago my boss sent me an interactive calculator that the New York Times created to help people decide whether it’s a better financial decision to buy a home or simply rent one. He shared the calculator with me because, at the time, we were looking for interesting ways to visualize data and relate it back to our work at Software Advice where we review enterprise software systems and report on enterprise tech trends. More on that in a bit.
Although I wasn’t in the market to do either, I found myself adjusting values and playing around with the calculator just to see how long I’d have to rent at my current rate to make purchasing a home worthwhile. In case you haven’t seen the calculator yet, here’s a screenshot of what it looks like.

read more

As more of your enterprise IT moves into the Cloud you may find yourself asking that very question – Is there a third option? The cost benefits of the Public Cloud may be appealing, but is this the appropriate environment for your critical data? The performance and security of a Private Cloud infrastructure will make you a hero, but the costs may be prohibitive. There is a third option, however – the Hybrid Cloud. The Hybrid Cloud will give you the benefit of having a right-sized, right-provisioned data solution that will allow you the benefit of both models – a mix of dedicated and cloud services from a Cloud Services provider.

read more

The ability to guarantee performance to thousands of applications at once has garnered praise from analysts and enterprises alike. Without this guarantee, cloud providers will not be able to meet the rising performance requirements of enterprise customers. Given the compelling advantages for performance isolation and guaranteed storage QoS, it’s no wonder that storage vendors are adding QoS features to their products. We recently discussed some of the simplistic approaches to QoS offered by storage systems, however the ability to guarantee performance to applications is not as simple as adding a new bullet point to a lengthy feature list.
Being able to guarantee application performance in all situations – including failure scenarios, system overload, variable workloads, and elastic demand – requires an architecture built from the ground up specifically to guarantee storage Quality of Service. Trying to bolt Quality of Service onto an architecture that was never designed to deliver performance guarantees is like strapping a jet engine to a VW Beetle. The wheels will come off just when you get up to speed.

read more

I get so many questions about cloud computing from friends, acquaintances and IT professionals alike. The non-technical folks usually have heard of “the cloud” but have absolutely no idea what it is or even realize how much they interact with it on a daily basis. They don’t realize that their email, phones, videos, music, online […]

The post Cloud Migration Tips #1: Cloud = Confusion appeared first on AppDynamics: The APM Blog.

read more

When VMware announced its hybrid cloud initiative it made perfect sense. The hybrid cloud market could provide substantial growth opportunities for VMware, as discussed in VMware Crosses the Rubicon and Hybrid is a Whole New Cloud. Yet one respected tech analyst has recently suggested that VMware’s hybrid cloud may be too late.
Amazon (AMZN) could be the clearest benefactor of the hybrid cloud operating model if it accelerates the enterprise adoption of off premise cloud services, especially if it occurs before VMware (or Microsoft) is ready with an equivalent offering.

read more