Posts Tagged 'Cloud Computing'

June 17, 2015

Through Our Customers’ Eyes

There’s something unique about getting an opinion about a product or service from someone who has actually used that service—it’s part of the reason why the reviews on Amazon and apps like Yelp have become so popular.

We can tell you all day long about all the things the SoftLayer cloud platform is capable of, but wouldn’t it be nice to get real life accounts about real customers who are building real businesses by using it?

The new customer stories page on our website features video and written stories of just that—happy customers who wanted to share their experiences about changing their industries or improving the way they do business by using SoftLayer.

And some of our customers are doing some really, really cool things. Take Sohonet, for example. The company is using the SoftLayer cloud to improve processes in the movie industry. Its private network for processing, storing, and collaborating on media workloads in the cloud has set a new standard for production and post-production work in the media industry. Check it out:

We have many more SoftLayer customers who are also doing cool things. You can read their stories on our new customer stories page.

We think we have some of the most innovative customers in the cloud. If you’re thinking about becoming one of them, take a look around. Then sign up, and maybe you can be our next featured story.

-Rachel

June 12, 2015

Big Data Academy Rewind: Trusted Computing in a Hybrid Cloud Environment

Through the ongoing (and free!) Big Data Academy, SoftLayer and Cloudant have teamed up to help you learn more about deploying big data workloads in the cloud, optimizing your infrastructure environment, and capitalizing on the value of your data via a series of free webinars and workshops.

But we know some of you prefer learning at your leisure, so we’re recapping our Big Data Academy webinars just for you. Last week, we brought you the first of our Big Data Academy webinar rewind series, “Always Be Open for Business with Cloud Solutions for E-commerce.” This week, we’ll be talking hybrid cloud: security, building and establishing trust and compliance, and enabling a hybrid computing environment.

Watch the webinar below:

Stay tuned for the next Big Data Academy webinar rewind, where we'll tackle the challenges and present the solutions to gaming and mobile app development.

By the way, are you in Europe this summer? The Big Data Academy is backpacking across the continent, with free in-person workshops in Amsterdam, Berlin, London, Paris, and Helsinki throughout June and July. Register now and top off your summer vacation with a free European workshop. (Bonus: All workshop participants will receive a special offer up to $1,250 per month for six months on SoftLayer.)

TOPICS INCLUDE:

  • [00:00:04.00]   Introduction of Karunakar Bojjireddy, SoftLayer Security Product Manager
  • [00:00:45.00]   Overview of SoftLayer
  • [00:02:55.00]   The SoftLayer definition of "cloud"
  • [00:05:52.00]   The SoftLayer difference
  • [00:06:58.00]   Hybrid cloud and security
  • [00:10:32.00]    Building trust and compliance in the cloud
  • [00:11:51.00]     Intel TXT technology on SoftLayer
  • [00:13:27.00]    Establishing trust using Intel TXT/TPM
  • [00:17:55.00]    Platforms using TXT/TPM and enabling the hybrid environment
  • [00:22:33.00]   How trusted computing pools work in an OpenStack environment
  • [00:25:39.00]   Example: the United States government
  • [00:28:35.00]   Questions and conclusion

-Fayza

June 5, 2015

Big Data Academy Rewind: Cloud and E-commerce Webinar

The world of big data applications is a nebulous one; to say a lot is expected of these apps is the understatement of the year. Their workloads are massive, their challenges are many, and their infrastructure solutions must be tailored to support the amount of work they do.

But where big data workloads raise big questions, the cloud has big answers. Through the Big Data Academy, SoftLayer and Cloudant have joined forces to help you learn more about deploying big data workloads in the cloud, optimizing your infrastructure environment, and capitalizing on the value of your data via a series of free webinars and workshops.

What if you weren't able to catch any of the free webinars or workshops this time around? You're in luck: we'll be presenting them here in a three-part series you can watch, pause, rewind, and replay at your leisure.

Our Big Data Academy webinar series rewind kicks off by teaching you how to make the cloud work for those big data applications in the land of e-commerce. In short, you’ll learn how to optimize while you monetize.

Watch the webinar below:

Stay tuned for the next Big Data Academy webinar rewind, where we'll talk all about security in the hybrid cloud. Better yet, if you find yourself in Europe this summer, the Big Data Academy has gone backpacking across the continent, with free in-person workshops in Amsterdam, Berlin, London, Paris, and Helsinki throughout June and July. Register now and top off your summer vacation with a free European workshop. (Bonus: All workshop participants will receive a special offer up to $1,250 per month for six months on SoftLayer.)

TOPICS INCLUDE:

  • [00:00:43.00]   Introduction of Harold Smith, SoftLayer Director of Sales Engineering
  • [00:1:00.00]   The history of SoftLayer and its relationship to the cloud
  • [00:4:26.00]   The SoftLayer definition of "cloud"
  • [00:8:40.00]   Why choose SoftLayer?
  • [00:10:33.00]  Cloud solutions for common big data challenges in e-commerce
  • [00:12:09.00]  SoftLayer cloud advantages for e-commerce
  • [00:13:24.00]  Big data solutions optimized on SoftLayer
  • [00:15:33.00]  Customer success stories: Tiket.com and HotelsCombined.com
  • [00:18:18.00]   Why choose Cloudant on SoftLayer?
  • [00:20:24.00]  Introduction of Glynn Bird, IBM Cloudant Developer Advocate
  • [00:21:14.00]   The state of the digital world
  • [00:22:43.00]  Which database should you use to build your app?
  • [00:25:00.00]  Introduction to IBM Cloudant
  • [00:27:32.00]  Cloudant deployment options
  • [00:29:07.00]  Why do e-commerce businesses use Cloudant?
  • [00:29:11.00]   Elastic cloud scalability
  • [00:32:53.00]  Data synchronicity
  • [00:34:48.00]  Geo-mobility
  • [00:34:25.00]  Freedom and fluidity of deployment
  • [00:36:46.00]  Customer success story: GreenMan Gaming
  • [00:38:46.00]  Cloudant for e-commerce
  • [00:41:10.00]   Questions and conclusion

-Fayza

March 6, 2015

The SLayer Standard Vol. 1 No. 7: the IBM InterConnect Edition

Last week, an estimated 21,000 IBMers, SLayers, customers and partners from around the world flooded Las Vegas, Nev. to attend the first-ever IBM InterConnect. This new conference combined three popular IBM conferences (Impact, Innovate and Pulse) into a single, premier cloud and mobile techno-topia.

What our engineers and developers did in Las Vegas after conference hours might have stayed in Las Vegas, but IBM’s InterConnect hits and announcements didn’t. Here’s a recap:

Speed to Market Wins the Cloud Computing Race
Everyone likes to go fast, and the new senior vice president for IBM Cloud, Robert LeBlanc, likes to go super-fast. “What I’m focusing on is speed,” LeBlanc says.

In this blink-and-the-market-changes world, time-to-market determines the winners and losers in cloud computing. Part of LeBlanc’s strategy is opening new SoftLayer datacenters. If you haven’t heard the news, SoftLayer will be launching Sydney and Montreal data centers in the next 30 days — with more coming soon. Stay tuned for more locations.

Read more on how LeBlanc plans to win the cloud business race.

Cloudy skies on the horizon—that’s a good thing!
Our CEO, Ginni Rometty, announced a $4 billion investment on cloud services (shared with the data analytics and mobile businesses). She’s hoping that the investment will spur $40 billion a year in revenue come 2018.

Signs of the investment could be seen as execs at InterConnect announced new hybrid services coming in 2015, including enterprise containers. [What’s a container? Read our blog post.]

In fact, hybrid was a big theme at InterConnect. “We are going to make all those clouds act like one,” says Angel Diaz, vice president of IBM cloud technologies. IBM cloud (powered by SoftLayer) will be a one-stop shop: a cloud superstore with a smorgasbord of aaS offerings.

It looks like it’ll be an exciting ride for IBM over the next couple of years. Make sure to keep up with the headlines for more announcements in the coming months.

-JRL

Categories: 
October 28, 2014

SoftLayer and AWS: What's the Difference?

People often compare SoftLayer with Amazon Web Services (AWS).

It’s easy to understand why. We’ve both built scalable infrastructure platforms to provide cloud resources to the same broad range of customers—from individual entrepreneurs to the world’s largest enterprises.

But while the desire to compare is understandable, the comparison itself isn’t quite apt. The SoftLayer platform is fundamentally different from AWS.

In fact, AWS could be run on SoftLayer. SoftLayer couldn’t be run on AWS.

AWS provisions in the public cloud.

When AWS started letting customers have virtual machines deployed on the infrastructure that AWS had built for their e-commerce business, AWS accelerated the adoption of virtual server hosting within the existing world of Web hosting.

In an AWS cloud environment, customers order the computing and storage resources they need, and AWS deploys those resources on demand. The mechanics of that deployment are important to note, though.

AWS has data centers full of physical servers that are integrated with each other in a massive public cloud environment. These servers are managed and maintained by AWS, and they collectively make up the available cloud infrastructure in the facility.

AWS installs a virtualization layer (also known as hypervisor) on these physical servers to tie the individual nodes into the environment’s total capacity. When a customer orders a cloud server from AWS, this virtualization layer finds a node with the requested resources available and provisions a server image with the customer’s desired operating system, applications, etc. The entire process is quick and automated, and each customer has complete control over the resources he or she ordered.

That virtualization layer is serving a purpose, and it may seem insignificant, but it highlights a critical difference in their platform and ours:

AWS automates and provisions at the hypervisor level, while SoftLayer automates and provisions at the data center level.

SoftLayer provisions down to bare metal resources.

While many have their sights on beating AWS at its own game, SoftLayer plays a different game.

SoftLayer platform is designed to give customers complete access and control over the actual infrastructure that they need to build a solution in the cloud. Automated and remote ordering, deployment, and management of the very server, storage, and security hardware resources themselves, are hosted in our data centers so that customers don’t have to build their own facilities or purchase their own hardware to get the reliable, high performance computing they need.

Everything in SoftLayer data centers is transparent, automated, integrated, and built on an open API that customers can access directly. Every server is connected to three distinct physical networks so that public, private, and management network traffic are segmented. And our expert technical support is available for all customers, 24x7.

Notice that the automation and integration of our platform happens at the data center level. We don’t need a virtualization layer to deploy our cloud resources. As a result, we can deploy bare metal servers in the same way AWS deploys public cloud servers (though, admittedly, bare metal servers take more time to deploy than virtual servers in the public cloud). By provisioning down to a lower level in the infrastructure stack, we’re able to offer customers more choice and control in their cloud environments:

In addition to the control customers have over infrastructure resources, with our unique network architecture, their servers aren’t isolated inside the four walls of a single data center. Customers can order one server in Dallas and another in Hong Kong, and those two servers can communicate with each other directly and freely across our private network without interfering with customers’ public network traffic. So with every new data center we build, we geographically expand a unified cloud footprint. No regions. No software-defined virtual networks. No isolation.

SoftLayer vs. AWS

Parts of our cloud business certainly compete with AWS. When users compare virtual servers between us, they encounter a number of similarities. But this post isn’t about comparing and contrasting offerings in the areas in which we’re similar … it’s about explaining how we’re different:
  • SoftLayer is able to provision bare metal resources to customers. This allows customers free reign over the raw compute power of a specific server configuration. This saves the customer from the 2–3 percent performance hit from the hypervisor, and it prevents “noisy neighbors” from being provisioned alongside a customer’s virtual server. AWS does not provision bare metal resources.

  • AWS differentiates “availability zones” and “regions” for customers who want to expand their cloud infrastructure into multiple locations. SoftLayer has data centers interconnected on a global private network. Customers can select the specific SoftLayer data center location they want so they can provision servers in the exact location they desire.

  • When AWS customers move data between their AWS servers, they see “Inter-Region Data Transfer Out” and “Intra-Region Data Transfer” on their bills. If you’re moving data from one SoftLayer facility to another SoftLayer facility (anywhere in the world), that transfer is free and unmetered. And it doesn’t fight your public traffic for bandwidth.

  • SoftLayer bare metal servers ordered with monthly billing include 20TB/mo of public outbound bandwidth, and virtual servers ordered with monthly billing include 5TB/mo of public outbound bandwidth. With AWS, customers pay a per-GB charge for bandwidth on every bill.

  • SoftLayer offers a broad range of management, monitoring, and support options to customers at no additional cost. AWS charges for monitoring based on metrics, frequency, and number of alarms per resource. And having access to support requires an additional monthly cost.

Do SoftLayer and AWS both offer Infrastructure as a Service? Yes.

Does that make SoftLayer and AWS the same? No.

-@khazard

September 30, 2014

SELLING SOFTLAYER (in Amsterdam)

Selling SoftLayer services to Internet-centric companies—hosting resellers, Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) providers, big data and e-commerce companies—are no-brainers. These companies clearly see the advantages that come with having their servers (the backbone of their business) hosted by a specialist. They switch their capital expenses into variable costs that can be spread over time.

On the flip side are companies in non-Internet-centric industries—banking, health care, oil & gas, and aerospace. How do these companies find value in the IaaS offered by SoftLayer? The IT infrastructure (servers to be precise) accounts for less than 5 percent of their capital expenditure (CAPEX) as opposed to almost 95 percent for Internet-centric companies.

Will the same value proposition work for both Internet-centric and non-Internet-centric companies?

With Internet-centric companies (where servers constitute up to 95 percent of CAPEX), the majority of the workforce is server-savvy. This means there is a very high chance any contact we have with these companies will be with a server-savvy fellow. Selling SoftLayer will then be a question of how SoftLayer’s USPs differentiate from the competition.

The current industry trend is driving a faulty message: The cloud is a commodity.

The truth is: Unlike basic commodities (electricity, gas, or cable), where there is little or no differentiation between what the end user gets irrespective of the provider, cloud and hosting in general are different. This faulty commodity-based assumption drives the price wars in cloud computing.

Comparing apples and oranges cumulus and stratus.

To test and disprove this theory, I brought a customer’s systems engineer (a server expert) into a sales discussion with the CTO.

I requested to put the price negotiations on hold for about 4 hours, and evaluate the services first. To do this, I asked for the exact configuration that the customer had hosted with a competitor. I ordered the exact configuration on the SoftLayer platform and within 2 hours the servers were ready. When the customer’s system engineer tested the performance of the SoftLayer server and compared it to what they had from a competitor, the price comparison was thrown out the window for good.

There are many different facets wherein SoftLayer outperforms the competition but unfortunately, most prospective customers only see price.

For the non-Internet-centric companies, to reach the price discussion is a milestone in itself. Pricing negotiations only begin when the need and suitability (originality) have been established.

The IBM and SoftLayer effect.

As a salesperson, I subscribe to the SCOTSMAN Sales Qualification Matrix (Solution, Competition, Originality, Timescales, Size, Money, Authority, and Need). Most companies in this group need solutions. IaaS is just part of that solution. This is where IBM (Big Blue) comes into the picture. As a service giant in the IT Sector, IBM can and will build on SoftLayer’s IaaS prowess to conquer this landscape. The synergies that are coming from this acquisition will send shockwaves across the industry.

Question is: Will the stakeholders maximize this potential to the fullest?

- Valentine Che, Global Sales, AMS01

September 18, 2014

The Cloud Doesn't Bite, Part III

Why it's OK to be a server-hugger—a cloud server hugger.

(This is the final post in a three-part series. Read the first and second posts here.)

By now, you probably understand the cloud enough to know what it is and does. Maybe it's something you've even considered for your own business. But you're still not sold. You still have nagging concerns. You still have questions that you wish you could ask, but you're pretty sure no cloud company would dignify those questions with an honest, legitimate response.

Well we’re a cloud company, and we’ll answer those questions.

Inspired by a highly illuminating (!) thread on Slashdot about the video embedded below, we've noticed that some of you aren't ready to get your head caught up in the cloud just yet. And that's cool. But let's see if maybe we can put a few of those fears to rest right now.

“[The] reason that companies are hesitant to commit all of their IT to the cloud [relates to] keeping control. It's not about jobs, it's about being sure that critical services are available when you need them. Whenever you see ‘in the CLOUD!’, mentally replace it with ‘using someone else's server’—all of a sudden it looks a whole lot less appealing. Yes, you gain some flexibility, but you lose a LOT of control. I like my data to not be in the hands of someone else. If I don't control the actual machine that has my data on it, then I don't control the data.”

You guys are control FREAKS! And rightfully so. But some of us actually don't take that away from you. Believe it or not, we make it easier for you.

In fact, sometimes you even get to manage your own infrastructure—and that means you can do anything an employee can do. You'll probably even get so good at it that you'll wonder why we don't pay you.

But it doesn't stop at mere management. Oh, no, no, no, friends. You can even take it one further and build, manage, and have total control over your very own private cloud of virtual servers. Yes, yours, and yours only. Now announcing you, the shot caller.

The point is, you don't lose control over your data in the cloud. None. 'Cause cloud companies don't play like that.

“The first rule of computer security is physical access, which is impossible with cloud services, which means they are inherently insecure.”

Curious. So since you can't physically touch your money in your bank account, does that mean it's a free-for-all on your savings? Let us know; we'll bring buckets.

“These cloud guys always forget to mention one glaring problem with their model— they're not adding any new software to the picture.”

Ready for us to blow your minds? We're actually adding software all the time; you just don't see it—but you do feel it.

Your friendly Infrastructure as a Service (IaaS) providers out there are doing a lot of development behind the scenes. An internal software update might let us deploy servers 10 minutes faster, for example. You won't see that, but that doesn't mean it's not happening. If you're happy with your servers, then rest assured you're seeing some sweet software in action. Some cloud companies aren't exclusively focused on software (think Salesforce), but that doesn't mean the software is dial-up grade.

“I personally don't trust the cloud. Think about it for a moment. You are putting your data on a server, and you have no clue as to where it is. You have no clue about who else is able to see that data, and you have no clue about who is watching as you access your data and probably no clue if that server is up to date on security patches.”

Just ask. Simply ask all these questions, and you'd have all these answers. Not to be cheeky, but all of this is information you can and do have a right to know before you commit to anything. We're not sure what makes you think you don't, but you do. Your own due diligence on behalf of your data makes that a necessity, not a luxury.

“As long as I'm accountable, I want the hardware and software under my control. That way when something goes wrong and my boss calls and asks 'WTF?', I can give him something more than ’Well I called Amazon and left a message with our account representative.’"

We can't speak for Amazon, but cloud companies often offer multiple ways you can get a hold of a real, live person because we get that you want to talk to us, like, yesterday. Yes, we totally get you. And we want to fix whatever ails you. In the cloud, that is.

But what makes you think we won't know when something goes wrong before you do? (Checkmate.)

“No matter how much marketing jargon you spew at people, ‘the cloud’ is still just a bunch of servers. Stop lying.”

Why yes, yes, it is. Who's lying to you about that? You're right. "They" should stop lying.

The concept of "the cloud" is simply about where the servers are located and how you consume computing, storage, and networking resources. In "the cloud," your servers are accessed remotely via a network connection (often the Internet, for most of the clouds you know and love) as opposed to being locally accessed while housed in a server room or physical location on the company premises. Your premises, as in wherever you are while performing your computing functions. But no one's trying to pull the wool over your eyes with that one.

Think about it this way: If servers at your location are "on the ground," then servers away from your location can be considered "in the cloud." And that's all there is to it.

Did we help? Did we clear the cloudy haze? We certainly hope so.

But this is just the beginning, and our door is always open for you to question, criticize, and wax philosophical with us when it comes to all things cloud. So get at us. You can chat with us live via our homepage, message us or post up on Facebook, or sling a tweet at a SLayer. We've got real, live people manning their stations. Consider the gauntlet thrown.

-Fayza

September 3, 2014

The Cloud Doesn’t Bite, Part I

Why it's OK to be a server hugger—a cloud server hugger.

By now, you probably understand the cloud enough to know what it is and does. Maybe it's something you've even considered for your own business. But you're still not sold. You still have nagging concerns. You still have questions that you wish you could ask, but you're pretty sure no cloud company would dignify those questions with an honest, legitimate response.

Well we’re a cloud company, and we’ll answer those questions.

Inspired by a highly illuminating (!) thread on Slashdot about the video embedded below, we've noticed that some of you aren't ready to get your head caught up in the cloud just yet. And that's cool. But let's see if maybe we can put a few of those fears to rest right now.

"I'm worried about cloud services going down or disappearing, and there’s nothing anyone can do about it."

Let's just get one thing straight here: we're human, and the devices and infrastructures and networks we create are fallible. They're intelligent and groundbreaking and mind-boggling, but they are—like us—susceptible to bad things and prone to error at any given time.

But it's not the end of the world if or when it happens. Your cloud service provider has solutions. And so do you.

First, be smart about who you choose to work with. The larger, more reputable a company you select, the less likely you are to experience outages or outright disappearances. It's the nature of the beast—the big guys aren't going out of business any time soon. And if the worst should happen, they're not going down without a fight for your precious data.

Most outages end up being mere temporary blips that generally don’t last long. It'd take a major disaster (think hurricane or zombie apocalypse) to take any cloud-based platform out for more than a few hours. Which, of course, sounds like a long time, but we're talking worst case scenario here. And in the event of a zombie apocalypse, you probably have bigger fish to fry anyway.

But the buck doesn't stop there. Moving data to the cloud doesn't mean you get to kick up your heels, and set cruise control. (You don't really want that anyway, and you know it.) Be proactive. Know your service-level agreements, and make sure your system structures are built in a way that you're not losing out when it comes to outages and downtime. Know your provider's plan for redundancy. Know what monitoring systems are in place. Identify which applications and data are critical and should be treated differently in the event of a worst case scenario. Have a plan in the event of doomsday. You wouldn't go head first into sharknado season without a strategy for what to do if disaster hits, right? Why would the (unlikely) downfall of your data be any different?

Remember when we backed things up to external hard drives; before we'd ever heard of that network in the sky (a quaint concept, we know)? Well, we think it would behoove you to have a backup of what's essential to you and your business.

In fact, being realistic about technology these days is paramount. We can't prevent failure because we know better. According to Microsoft's chief reliability strategist, David Bills, "It's about designing resilient services in which inevitable failures have a minimal effect on service availability and functionality."

In any event, don't panic. You think you're freaking out about the cloud going down? Chances are, your provider is one step ahead of you already.

"Most of the time you don't find out about the cloud host's deficiencies until far too late." "One cloud company I had a personal Linux server with got hit with a DOS attack, and their response was to ignore their customer service email and phone for almost a week while trying to clean it up.”

Uh. Call us crazy, but we're guessing that company's no longer around—just a hunch.

We cloud infrastructure providers don't exactly pride ourselves on hoarding your data and then being completely inaccessible to you. Do your research on potential providers. Find out how easy it is (or difficult as the case may be) to get a hold of your customer service team. Make sure your potential provider's customer support meets your business needs. Make sure there's extra expertise available to you if you need personal attention or a little TLC. Make sure those response times are to your liking. Make sure those methods of contact are diverse enough and align with the way you do work.

We know you don't want to need us, but when you do need us, we are here for you.

"Of course, you have to either provide backup yourself, or routinely hard-verify the cloud provider's backup scheme. And you'd better have a backup-backup offsite recovery contract for when the cloud provider announces it can't really recover (e.g. Hurricane Sandy). And a super-backup-backup plan in case the cloud provider disappears with no forwarding address or has all its servers confiscated by DHS."

Hey, you don't have to have any of these things if your data's not that important to you. But if you'd have backups of your local servers, why wouldn't you have backups of anything you put in the cloud?

We thought so.

Nota bene: Sounds like you might want to take up some of this beef with Hurricane Sandy.

Stay tuned for part two where we tackle accountability, security, and buying ourselves new yachts.

- Fayza

August 28, 2014

Dude, how do I get into the cloud?

I know you may think that’s just a catchy title to get you to read my blog, but it’s not. I’ve actually had someone ask me that at a party. In fact, that’s the first thing anyone asks me when they find out I work for SoftLayer. The funny thing is, everyone is already in the cloud—they just don’t realize it! To make my point, I pick up their smart phone and tell them they already are in the cloud, and walk away. That, of course, sparks more conversation and the opportunity to educate my friends and family on the magic and mystery that is the cloud. But truthfully, it really is a very simple concept:

  • On demand
  • Compute
  • Consumption-based billing

That’s it. At its core. But if you want more detail, check out this document: NIST.

And, just to shed light on the backend of what the cloud is, well, it’s nothing but servers. I know, you were expecting something more exciting—maybe unicorns and fairy dust. But it’s not. We house the servers. We care for them daily. We store them and protect them. All from our data center.

What makes SoftLayer stand out from others in the cloud space is that we offer more than one-size-fits-all servers. We offer both public and private virtual servers like other cloud providers, but we also offer highly customizable and high performance bare metal, servers. And as with any good infrastructure, we offer all the ancillary services such as load balancing, firewalls, attached storage, DNS, etc…

There’s no magic involved here. We’ve simply taken your infrastructure and removed your capex and headache. You’re welcome.

So when you hear “The Cloud,” don’t be mystified, and don’t feel inadequate. Now you too can be the cloud genius at your next party. When they talk cloud, just say things like, “Oh yeah, it’s totally on demand computing that bills based on consumption.” Chicks dig that, trust me.

-Cheeku

September 30, 2013

The Economics of Cloud Computing: If It Seems Too Good to Be True, It Probably Is

One of the hosts of a popular Sirius XM radio talk show was recently in the market to lease a car, and a few weeks ago, he shared an interesting story. In his research, he came across an offer he came across that seemed "too good to be true": Lease a new Nissan Sentra with no money due at signing on a 24-month lease for $59 per month. The car would as "base" as a base model could be, but a reliable car that can be driven safely from Point A to Point B doesn't need fancy "upgrades" like power windows or an automatic transmission. Is it possible to lease new car for zero down and $59 per month? What's the catch?

After sifting through all of the paperwork, the host admitted the offer was technically legitimate: He could lease a new Nissan Sentra for $0 down and $59 per month for two years. Unfortunately, he also found that "lease" is just about the extent of what he could do with it for $59 per month. The fine print revealed that the yearly mileage allowance was 0 (zero) — he'd pay a significant per-mile rate for every mile he drove the car.

Let's say the mileage on the Sentra was charged at $0.15 per mile and that the car would be driven a very-conservative 5,000 miles per year. At the end of the two-year lease, the 10,000 miles on the car would amount to a $1,500 mileage charge. Breaking that cost out across the 24 months of the lease, the effective monthly payment would be around $121, twice the $59/mo advertised lease price. Even for a car that would be used sparingly, the numbers didn't add up, so the host wound up leasing a nicer car (that included a non-zero mileage allowance) for the same monthly cost.

The "zero-down, $59/mo" Sentra lease would be a fantastic deal for a person who wants the peace of mind of having a car available for emergency situations only, but for drivers who put the national average of 15,000 miles per year, the economic benefit of such a low lease rate is completely nullified by the mileage cost. If you were in the market to lease a new car, would you choose that Sentra deal?

At this point, you might be wondering why this story found its way onto the SoftLayer Blog, and if that's the case, you don't see the connection: Most cloud computing providers sell cloud servers like that car lease.

The "on demand" and "pay for what you use" aspects of cloud computing make it easy for providers to offer cloud servers exclusively as short-term utilities: "Use this cloud server for a couple of days (or hours) and return it to us. We'll just charge you for what you use." From a buyer's perspective, this approach is easy to justify because it limits the possibility of excess capacity — paying for something you're not using. While that structure is effective (and inexpensive) for customers who sporadically spin up virtual server instances and turn them down quickly, for the average customer looking to host a website or application that won't be turned off in a given month, it's a different story.

Instead of discussing the costs in theoretical terms, let's look at a real world example: One of our competitors offers an entry-level Linux cloud server for just over $15 per month (based on a 730-hour month). When you compare that offer to SoftLayer's least expensive monthly virtual server instance (@ $50/mo), you might think, "OMG! SoftLayer is more than three times as expensive!"

But then you remember that you actually want to use your server.

You see, like the "zero down, $59/mo" car lease that doesn't include any mileage, the $15/mo cloud server doesn't include any bandwidth. As soon as you "drive your server off the lot" and start using it, that "fantastic" rate starts becoming less and less fantastic. In this case, outbound bandwidth for this competitor's cloud server starts at $0.12/GB and is applied to the server's first outbound gigabyte (and every subsequent gigabyte in that month). If your server sends 300GB of data outbound every month, you pay $36 in bandwidth charges (for a combined monthly total of $51). If your server uses 1TB of outbound bandwidth in a given month, you end up paying $135 for that "$15/mo" server.

Cloud servers at SoftLayer are designed to be "driven." Every monthly virtual server instance from SoftLayer includes 1TB of outbound bandwidth at no additional cost, so if your cloud server sends 1TB of outbound bandwidth, your total charge for the month is $50. The "$15/mo v. $50/mo" comparison becomes "$135/mo v. $50/mo" when we realize that these cloud servers don't just sit in the garage. This illustration shows how the costs compare between the two offerings with monthly bandwidth usage up to 1.3TB*:

Cloud Cost v Bandwidth

*The graphic extends to 1.3TB to show how SoftLayer's $0.10/GB charge for bandwidth over the initial 1TB allotment compares with the competitor's $0.12/GB charge.

Most cloud hosting providers sell these "zero down, $59/mo car leases" and encourage you to window-shop for the lowest monthly price based on number of cores, RAM and disk space. You find the lowest price and mentally justify the cost-per-GB bandwidth charge you receive at the end of the month because you know that you're getting value from the traffic that used that bandwidth. But you'd be better off getting a more powerful server that includes a bandwidth allotment.

As a buyer, it's important that you make your buying decisions based on your specific use case. Are you going to spin up and spin down instances throughout the month or are you looking for a cloud server that is going to stay online the entire month? From there, you should estimate your bandwidth usage to get an idea of the actual monthly cost you can expect for a given cloud server. If you don't expect to use 300GB of outbound bandwidth in a given month, your usage might be best suited for that competitor's offering. But then again, it's probably worth mentioning that that SoftLayer's base virtual server instance has twice the RAM, more disk space and higher-throughput network connections than the competitor's offering we compared against. Oh yeah, and all those other cloud differentiators.

-@khazard

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