Cloud and CDN. What’s stopping you?

1. Cloud and CDN. What’s stopping you? HostingCon 2011 DitlevBredahl, CEO, OnApp @ditlev linkedin.com/in/ditlev ditlev@onapp.com facebook.com/ditlev

2. Ditlev Bredahl • 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

3. OnApp

4. …OnApp?

5. Software for hosts About OnApp OnApp launched July 1st 2010 80+ employees in US, EU, APAC 400+ clouds deployed 2+ clouds per day 300+ clients

6. And this morning… • 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?

7. Cloud

8. What are you missing out on? • 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)

9. The numbers stack up... Host Client

10. The longer you wait...3 phases Gold rush Decommoditization Commoditization Cloud is no longer the cloud but Just how stuff’s done 2010-12 2012-14 2015 Margin for early (and smart) adopters

11. Now is the time… So, there is a window now, where CPA’s are low, margins are high and clients are plenty …but it will commoditize soon So now is the time to get started!

12. So, what to consider ? • 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?

13. Where can you add value? De-commoditize Build vsBuy

14. Who has done well… • Strong growth • Good understanding of their clients • Taken the first steps towards de-commoditization • Not only fed by existing client bases…

15. Eapps.com

16. VPS.NET

17. UK2.NET

18. Caro.net

19. GMO Cloud (USA)

20. Steadfast.net Tiered Storage

21. So what’s stopping you?Why are there less than 1000 public clouds online?

22. Maybe it’s the business plan? Shared hosting: 540 seat Jumbo jet = 700 passengers Dedicated server hosting: 540 seats = 540 passengers Cloud hosting:540 seats = 4-500 passengers Underselling – learn how to monetize spare capacity!

23. Or is it a simple... • Lack of time?

24. Time is of the essence • CPAs & margins • Commoditization • The gold rush hasalready started

25. ...the harder it will be • 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

26. How can OnApp help?

27. How can OnApphelp? • Low set-up cost • 24 hour deployment Commodityhardware Cloudinfrastructure On-demand resources Endusers VM Deployment VM Management VM HA/FailoverAutoscaling/LB User management Utility/billing • Free support & integration • Designed for hosters

28. How can OnApp help? • Very low entry costs Rapid time to market • High density design • Commodity hardware • Monthly license • Free first year • 24-hour deployment • Billing integration • Free support • Optimal hardware use • VLAN management • Maximum flexibility

29. How can OnApp help? Automatic failover Multi-platform/OS/cloud Multi-hypervisor support Customer Isolation Module

30. How can OnApp help? Huge VM template library Customizable CP Billing integration iPhone app

31. CDN

32. CDN market

33. 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 Top Ten CDNs by Revenue, Q3 2010 ($000) Not a functional marketplace!

34. The value of CDN for hosters • Another touchpoint • Clearly attractive to customers • Still High margin • Very sticky, as any DNS based product

35. CDN’s – enterprise only? A huge window of opportunity • 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

36. So what’s stopping you?

37. CDN and mass-market hosts Got $5-50 million spare? • 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

38. How can OnApp help?

39. 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.

40. How we will do it OnApp CDN StackFully-featured edge server platform • OnApp CDNaaSGlobal Anycast DNS service for OnApp CDN OnApp CDN FederationMarketplace for hosts to buy & sell CDN capacity By introducing 3 new concepts

41. CDNaaS

42. 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)

43. 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

44. OnApp CDN Stack

45. 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)

46. 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

47. OnApp CDN Federation

48. 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)

49. OnApp CDN Federation • End user makes content request to (eg) VPS.NET • Receives content from closest federated provider (egDediserve) • Transparent to the user: OnApp controls underlying CDN network • Federation agreement between OnApp-powered providers

50. Federated CDN for hosts • Uses spare cloud capacity • No infrastructure needed • Buy and sell CDN bandwidth • Monetize excess capacity • OnAppwillpayclients, not the otherwayaround… OnApp CDN StackFully-featured edge server platform • OnApp CDNaaSGlobal Anycast DNS service for OnApp CDN OnApp CDN FederationMarketplace for hosts to buy & sell CDN capacity