Our Competition

November 3, 2010

It doesn’t come as a big surprise to anyone when I say that I spend a lot of time thinking about the competition. I want to understand what motivates them. I need to understand how they see the marketplace evolving. What are they doing about the cloud? What about IPv6? What about the network? No surprises there.

What I do think would surprise people is that I do not think of Rackspace, Saavis or Amazon as the competition. I think that real competition is found within the small medium business or the enterprise. I don’t have any hard statistics on it, but a number of analysts seem to settle on a 25:75 split. That is, they believe that only 25% of businesses go outside the corporate walls for their hosting needs. The other 75% have their own data centers, or have servers in various closets around the organization (and I mean real closets in some cases). It is not that we don’t want to win the other 25% of the world (we obviously win our fair share of customers there), but the attraction of the rest of the marketplace for SoftLayer is apparent – the opportunity is 3x larger. And that is really exciting.

In 2004, Nicholas Carr authored a book called “Does IT Matter”. One of his central arguments was the notion that IT adoption no longer meant implicit competitive advantage, essentially because IT has become commonplace, standardized and cheaper. I agree with him to a degree, particularly when it comes to larger companies and certain types of IT deployments. For example, there is not much competitive advantage to ERP or HR systems anymore – there are very few larger organizations that don’t have something in place. The same can be said for the Internet or mobile computing – everybody has access, and everybody uses fixed and mobile email. That said, you are dead without either function in place – the lack of adoption is a definite disadvantage. I can only assume that he did not have infrastructure as a service (sounds like IT to me…) in mind when he wrote the book.

I think that there is significant advantage to a relationship with SoftLayer. The difference is that we are taking some IT burden away to give some competitive advantage, versus adding IT burden to deliver an advantage.

What competitive advantage does SoftLayer bestow that is lost when everything is kept within the walls?

  1. Cost. This one is easy. We can deliver at a price point much lower that what you can do internally. This means that resources are available for other things, perhaps product innovation or marketing innovation.
  2. Expertise. Infrastructure is our business. We are better at this than you are. We invest in systems, network and people to make sure this is always the case. Think of less downtime and better security.
  3. Technology. Our ongoing investment in technology and our commitment to innovation means that our customers have access to the cutting edge before most others do. For example, we are already native IPv6 in the network.
  4. Focus. What happens when some of that burden gets shifted externally? It means that the company can focus more of its resources on growing business, versus merely supporting the business.
  5. Automation. If something around here gets done more than twice manually, then it is time to automate. The end result is that we are efficient – no waiting for servers to be racked and stacked. Give us an order and you are up and running in less than four hours. Think of this in terms of speed to market, and speed to scale.

I think you get the point, and I think that the 75% is slowly getting the point too. We deliver a significant competitive advantage by helping to drive your business forward versus delivering as a ‘back office’ that serves to drive costs. We’re waiting for you….

-@lavosby

Comments

November 9th, 2010 at 9:35am

While I do agree that companies are realizing the benefits of moving their servers to a remote datacenter, rental cost still need to come down and the underlying server applications have to become more robust and stable to make this a no-brainer for businesses worldwide.

In order for SL and other leading datacenter providers to make a big impact outside the US and in emerging markets, they need to setup a datacenters globally especially in India, which lacks an automated, efficient and cost effective datacenter facility. I hope SL will take the lead and bring in their expertise to play and take the first mover advantage!

November 17th, 2010 at 10:23am

Doing one thing and doing it will is a part of a natural maturation process of the industry. The technology has become too complex, too deep and changes too quickly for a single corporation to be a jack of all trades for all users.

A decade ago, knowing some HTML, Photoshop and FTP was basically all that was required to build a web site. Today, you need a half dozen programming/scripting languages, database expertise, security knowledge and more.

Unless your company has hundreds of employees and is very well managed, you will likely fail at trying to do everything. The poster child for this is Google. Basically they have 2-3 really successful products: Search, Maps and Email. Most of their other endeavors have failed.

I am happy to see SoftLayer's primary focus is on infrastructure delivery -- not just because we don't need another competitor in the managed services spaces but because there is a need for an infrastructure focused company. Until you guys, nobody really provided a good channel to deliver infrastructure at low cost in a consistent and rapid manner.

Having your tools allows solution providers like us to deploy faster, save money and continually innovate without distractions of co-location, hardware management or raising significant capital.

So keep up the great job of providing these tools and we will keep making them easily accessible to small businesses.

November 23rd, 2010 at 6:15pm

The Competition goes well beyond the actual hardware or software. In fact, I am sure that many others consider service of the customer over the actual equipment. Face it, if hardware breaks and you cannot speak to anyone about it or worse, open a ticket and the numb nuts on the other side doesn't read the ticket, what good is the Ticket? SL needs to seriously consider that they have a great reputation with both Customer Service and great equipment.

We recently had an issue with SL Abuse; we sent an abuse notice out to another provide; the other provide instead of dealing with the attacker sent it to SL and SL told us that we were abusing; however, if the SL Abuse Team would have actually read the complaint, they would have seen that I sent it out and SL even included my name and address in the complaint to us. Try calling and tell SL Abuse that they screwed up? I'm waiting for a return call - right? :(

The reason our company does not do business with The Planet may be the reason that SL may start loosing customers; lets hope that this is not the writing on the wall. CUSTOMER SERVICE LANCE!!

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Comments

November 9th, 2010 at 9:35am

While I do agree that companies are realizing the benefits of moving their servers to a remote datacenter, rental cost still need to come down and the underlying server applications have to become more robust and stable to make this a no-brainer for businesses worldwide.

In order for SL and other leading datacenter providers to make a big impact outside the US and in emerging markets, they need to setup a datacenters globally especially in India, which lacks an automated, efficient and cost effective datacenter facility. I hope SL will take the lead and bring in their expertise to play and take the first mover advantage!

November 17th, 2010 at 10:23am

Doing one thing and doing it will is a part of a natural maturation process of the industry. The technology has become too complex, too deep and changes too quickly for a single corporation to be a jack of all trades for all users.

A decade ago, knowing some HTML, Photoshop and FTP was basically all that was required to build a web site. Today, you need a half dozen programming/scripting languages, database expertise, security knowledge and more.

Unless your company has hundreds of employees and is very well managed, you will likely fail at trying to do everything. The poster child for this is Google. Basically they have 2-3 really successful products: Search, Maps and Email. Most of their other endeavors have failed.

I am happy to see SoftLayer's primary focus is on infrastructure delivery -- not just because we don't need another competitor in the managed services spaces but because there is a need for an infrastructure focused company. Until you guys, nobody really provided a good channel to deliver infrastructure at low cost in a consistent and rapid manner.

Having your tools allows solution providers like us to deploy faster, save money and continually innovate without distractions of co-location, hardware management or raising significant capital.

So keep up the great job of providing these tools and we will keep making them easily accessible to small businesses.

November 23rd, 2010 at 6:15pm

The Competition goes well beyond the actual hardware or software. In fact, I am sure that many others consider service of the customer over the actual equipment. Face it, if hardware breaks and you cannot speak to anyone about it or worse, open a ticket and the numb nuts on the other side doesn't read the ticket, what good is the Ticket? SL needs to seriously consider that they have a great reputation with both Customer Service and great equipment.

We recently had an issue with SL Abuse; we sent an abuse notice out to another provide; the other provide instead of dealing with the attacker sent it to SL and SL told us that we were abusing; however, if the SL Abuse Team would have actually read the complaint, they would have seen that I sent it out and SL even included my name and address in the complaint to us. Try calling and tell SL Abuse that they screwed up? I'm waiting for a return call - right? :(

The reason our company does not do business with The Planet may be the reason that SL may start loosing customers; lets hope that this is not the writing on the wall. CUSTOMER SERVICE LANCE!!

Leave a Reply

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