OnApp CEO Ditlev Bredhal presents on the cloud computing business model
(WEB HOST INDUSTRY REVIEW) — In his “leadership perspective” session Ditlev Bredhal, CEO of OnApp, discussed the conversations he has had with service providers as they prepare to launch cloud products based on the OnApp platform.
In most cases, he says, the questions have been about the business model for cloud services, which is much different from the model for dedicated services.
The cloud business, he says, offers higher revenue per cabinet, but at the cost of lower revenue per user.
There is also a certain barrier to entry. In order to bring your first cloud customer online, you’ll have to build the cloud computing infrastructure itself. He makes the comparison that bringing a dedicated server online costs $2,500, compared to $25,000 for a basic cloud solution.
He also addresses the “end of overselling,” inherent in cloud, referring to the general tendency of shared hosting providers to sell more resources than the server actually has available. Dedicated server hosts, of course, sell exactly the amount of infrastructure they supply, and in a cloud environment, the host must sell less than the full resources of the machine – leaving room for failovers and other issues.
The cloud model actually requires a bit of “underselling.”
He says there’s no easy answer for the industry demand for storage innovation. The cloud computing industry, he says, needs something faster, cheaper and smaller from the storage business.
The time to market for cloud services is completely different. It has a very fast sales cycle, and a fast implementation time. There’s a bit of a “gold rush” effect taking place during the time before the cloud business commoditizes, but Bredhal suggests that providers focus on how they’re going to differentiate themselves long-term (through server images, partnerships and new cloud concepts).
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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