Comments on: More “GAHAP” http://blog.softlayer.com/2008/more-gahap/ A Behind the Scenes Look at the Best Hosting Provider in the World Fri, 17 May 2013 09:41:29 +0000 hourly 1 http://wordpress.org/?v=3.4.1 By: Gary Kinman http://blog.softlayer.com/2008/more-gahap/comment-page-1/#comment-333 Gary Kinman Fri, 07 Mar 2008 19:17:01 +0000 http://theinnerlayer.softlayer.com/2008/more-gahap/#comment-333 g00gle, Also, sorry for not getting back to you sooner. When you say "income (not counting costs)" I'm guessing you mean top line revenue. I could tell you our average revenue per customer, but then Lance would whack me or something :) There are a few ways to calculate what you're looking for. A simple way would be to divide your total revenue by total number of customers to get the average per customer. Or if you know the average price of a unit sold and how many units are held per customer, then multiply the average unit price times the units held per customer to get what you're looking for. Gary g00gle,

Also, sorry for not getting back to you sooner. When you say “income (not counting costs)” I’m guessing you mean top line revenue. I could tell you our average revenue per customer, but then Lance would whack me or something :)

There are a few ways to calculate what you’re looking for. A simple way would be to divide your total revenue by total number of customers to get the average per customer. Or if you know the average price of a unit sold and how many units are held per customer, then multiply the average unit price times the units held per customer to get what you’re looking for.

Gary

]]> By: Gary Kinman http://blog.softlayer.com/2008/more-gahap/comment-page-1/#comment-332 Gary Kinman Fri, 07 Mar 2008 19:11:57 +0000 http://theinnerlayer.softlayer.com/2008/more-gahap/#comment-332 augustz, Thanks for your comments. Sorry I haven't had a chance to respond sooner. You are right on the operating cycle vs. 1 year, whichever is longer, and also correct that our operating cycle is less than a year, so I didn't even bring that up in our current liabilities discussion. :) On comparing across companies, it is possible for an industry to adopt a standard that is unique to that business. Consider real estate investment management - that industry values buildings at fair market value, not historical cost less accumulated depreciation. Hosting is a WAY smaller industry but I have faint hopes that someday we can tweak our accounting standards for our industry in a few ways that make common sense. augustz,

Thanks for your comments. Sorry I haven’t had a chance to respond sooner. You are right on the operating cycle vs. 1 year, whichever is longer, and also correct that our operating cycle is less than a year, so I didn’t even bring that up in our current liabilities discussion. :)

On comparing across companies, it is possible for an industry to adopt a standard that is unique to that business. Consider real estate investment management – that industry values buildings at fair market value, not historical cost less accumulated depreciation. Hosting is a WAY smaller industry but I have faint hopes that someday we can tweak our accounting standards for our industry in a few ways that make common sense.

]]> By: g00gle http://blog.softlayer.com/2008/more-gahap/comment-page-1/#comment-283 g00gle Fri, 25 Jan 2008 18:23:06 +0000 http://theinnerlayer.softlayer.com/2008/more-gahap/#comment-283 This is great info: Do you have a simple calculation that can be used in hosting /dedicated server hosting to give us an idea or ballpark number of the avg income per customer? Trying to find out our income (not counting costs) per customer for marketing budgets. This is great info:

Do you have a simple calculation that can be used in hosting /dedicated server hosting to give us an idea or ballpark number of the avg income per customer?

Trying to find out our income (not counting costs) per customer for marketing budgets.

]]> By: augustz http://blog.softlayer.com/2008/more-gahap/comment-page-1/#comment-260 augustz Fri, 11 Jan 2008 09:55:45 +0000 http://theinnerlayer.softlayer.com/2008/more-gahap/#comment-260 I'm an accountant, but also enjoy the odd financial analysis and have some clients for whom I just do financial analysis. The above is really spot on. And often contract/staffing analysis and other more management style reporting is more useful then GAAP internally. We need more CMA style accountants in addition to the CPA's, who I've found take a very audit orientated approach to things even internally where there is a clear skew. It's nice to run into more broadly minded analytical CPA. I especially how you parallel the current liabilities definition. One quick point, but current liabilities is not a strict 12 months but can include liabilities that are settled for cash or equivalents beyond a year (pretty industry dependent). I beleive the formal defintion references a year or operating cycle, whichever is longer. In the hosting business, your operating cycle is probably much much shorter then a year, so an irrelevant point in the GAHAP world :) That said, for comparison purposes across companies, GAAP is absolutely critical, because you make all the adjustments on a post GAAP bases, or set benchmarks/hurdle rates etc differently given a specific sector. Not as good as an internal management report, but doable. Look forward to the next GAHAP update... I’m an accountant, but also enjoy the odd financial analysis and have some clients for whom I just do financial analysis. The above is really spot on. And often contract/staffing analysis and other more management style reporting is more useful then GAAP internally. We need more CMA style accountants in addition to the CPA’s, who I’ve found take a very audit orientated approach to things even internally where there is a clear skew. It’s nice to run into more broadly minded analytical CPA. I especially how you parallel the current liabilities definition.

One quick point, but current liabilities is not a strict 12 months but can include liabilities that are settled for cash or equivalents beyond a year (pretty industry dependent). I beleive the formal defintion references a year or operating cycle, whichever is longer. In the hosting business, your operating cycle is probably much much shorter then a year, so an irrelevant point in the GAHAP world :)

That said, for comparison purposes across companies, GAAP is absolutely critical, because you make all the adjustments on a post GAAP bases, or set benchmarks/hurdle rates etc differently given a specific sector. Not as good as an internal management report, but doable.

Look forward to the next GAHAP update…

]]>