Author Archive: Sean Charnock

June 22, 2007

Money, Money, Money

The term "Digital Super-Highway" seems to be quite prophetic as the monetization of the internet seems to be exploding from all angles. Monetization of the internet is something that we are always focusing on here since a good portion of our customer base turns our underlying infrastructure into a revenue-generating engine for them, be it through Value Added Services, enablement of SaaS business models, e-commerce activities or whatever focus our customers have (which are too many to list).

I always knew the monies on the web were staggering, but I was caught off guard the other day when I came across an article in Business 2.0, "The Man Who Owns the Internet". The article is about Kevin Ham, who has built a $300 Million Dollar portfolio of domain names. $100,000 for Greeting.com, and $31,000 for Christianrock.com and so on. He's a domain name mogul.

In a technology world, this seems to be the "day-trading" of the internet. The other portion of this article that struck me is the monetization of the typographical errors in domains, referred to as "Typo Squatting". We have all accidentally fat-fingered a key here or there and after closing the 85 pop-ups, the monies are moving like a slot machine with triple 7’s across the board. In an article referring to the monetization of Typo Squatting, companies have built multi-million dollar producing firms on capitalizing on a misspelling here, a lack of dash there, etc. Just for reference, it seems that www.softlater.com is already taken, which means my dream of typo squatting my way to retirement has taken a drastic turn.

With the tools we have put in place through the API and the private network we have really streamlined the enablement of the monetization of the internet, which when we talk to our customers it’s at the forefront of both of our minds. The successes of our customers ensure our success, so putting these tools in place are essential. Not to give away the secrets of others, but I have peeked into the private back-end network and seen things like credit card processing gateways, server to server data transfers, licensing gateways and numerous other activities that are surely streamlining the money making processes for our customers.

So I am not sure that when the term "Digital Super Highway" was coined that we ever thought there would be toll-booths along the way, but its clear that these are here to stay.

As a side note, if anyone is interested in sharing their monetization stories, feel free to drop me a line at bizdev@softlayer.com

-Sean

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June 5, 2007

Microsoft: The Next SoftLayer

Microsoft, the Next Softlayer…

I'm only kidding, but with the recent announcement for Microsoft's Surface, total integration across product platforms has serious backing from within Microsoft, as evidenced by Bill Gates' support. The idea behind "surface computing" is to capture all tangible applications that are data-driven and integrate them into a portal that allows cross-sharing no matter what the product is (a phone, a camera, a personal computer or whatever). The commonality of this all lies within centralization. As one analyst writes in a recent Business Week article:

"It will be at least a few years before a consumer will be able to buy a Surface Computer and bring it home. To get there, Microsoft will need to create an ecosystem where software developers are motivated to write must-have applications. 'This thing is only cool if it works seamlessly,' says Roger Kay, president of market research firm Endpoint Technologies Associates. 'If it works well, it's game-changing.' Should those stars align, Kay says, sales could reach into the low billions of dollars in five years. 'Individuals are going to want this much faster than Microsoft is going to be able to deliver it to them,' he adds.”

When the team here at Softlayer started, we all had a very similar view as it pertained to the dedicated hosting and utility computing markets. With a tremendously successful track record behind us building companies spanning most everything internet-related, we looked at these markets with a simple question to answer—"How do we merge the physical layer with the virtual layer?” If we could answer this question, this would be our game-changing moment. After our recent announcement of the world's first API in the dedicated web hosting environment, we are certain the game has changed. The API has certainly started to answer our simple question of merging the physical and virtual environments and now with the introduction of the SoftLayer Development Network, we have opened doors to what is sure to be some really exciting applications to come in the next few days, weeks, and months. Our Eco-System is now one that resides both internally at SoftLayer and with our customer-base. We feel we've just barely touched the "Surface.”

-Sean

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May 29, 2007

The Real Price of Retail

A few days ago Dell made a splash by telling the world they had established a partnership with Wal-Mart to sell their computers and other products throughout Wal-Mart’s 3,000 stores worldwide. This marks an interesting milestone in Dell's corporate existence. Dell has always been acknowledged as an innovative and cutting edge company through their direct sales model which took a layer of distribution (in this case retail) out of the sales process and allowed customers to "have it their way", so to speak.

With the competitiveness in the PC market and Dell’s admission of trailing behind the likes of HP and IBM, the motivation for this transition in their sales channel is clearly predicated on increasing overall volume to boost the market's perception of their thriving company and the goal of being #1 worldwide in the PC market. Obviously, this has sparked a debate on their ability to maintain a differentiated strategy in the branding of "Dell", which has generally been perceived as a higher quality because of their direct channel strategy.

In hearing the news of this new marriage between Dell and Wal-Mart it reminded me of an article that I ran across at fastcompany.com entitled "The man who said no to Wal-Mart" and it hit home with the story of Jim Wier, CEO of Simplicity (owner of Snapper Lawn Mowers) who was at a crux in his company's life cycle where he would have to choose a path that would shape the course of his company going forward. Was he going to choose a path of high volume, low margins products or high quality and sustained margins product sets at levels that his company needed to maintain its proper corporate health? To the surprise of many, including Wal-Mart, Mr. Wier respectfully choose the path that many others had not in the past -- the one without Wal-Mart. Although two unique industries here with technology and durable consumer goods, the thoughts have to be the same in the minds of both management teams. It’s a fascinating article and I would encourage anyone who runs a business that struggles with pricing and volume levels to read.

There is no doubt Dell has been one of the most influential companies of the last 20 years in the technology industry and their management teams, through addition and attrition, have paved the way for tremendous success both financially and technologically over those years. Not many other companies have the ability to coin a phrase such as "Dellionaire". With this shift, I trust the powers that be have thought long and hard regarding the pros and cons of the retail markets, primarily in the retail technology sectors. If volume is what they want, then volume is what they are likely to receive. The real question lies in “at what price?” and which of these two corporate giants has a bigger muscle to flex in the room, Dell or Wal-Mart?

-Sean

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