Posts Tagged 'Industry'

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

December 30, 2011

The Pros and Cons of Two-Factor Authentication

The government (FISMA), banks (PCI) and the healthcare industry are huge proponents of two-factor authentication, a security measure that requires two different kinds of evidence that you are who you say you are ... or that you should have access to what you're trying to access. In many cases, it involves using a combination of a physical device and a secure password, so those huge industries were early adopters of the practice. In our definition, two-factor authentication is providing "something you know, and something you have." When you're talking about national security, money or people's lives, you don't want someone with "password" as their password to unwittingly share his or her access to reams valuable information.

What is there not to like about two-factor identification?

That question is one of the biggest issues I've run into as we continue pursuing compliance and best practices in security ... We can turn on two-factor authentication everywhere – the portal, the vpn, the PoPs, internal servers, desktops, wireless devices – and make the entire SoftLayer IS team hate us, or we can tell all the admins, auditors and security chiefs of the world to harden their infrastructure without it.

Regardless of which direction we go, someone isn't going to like me when this decision is made.

There are definite pros and cons of implementing and requiring two-factor authentication everywhere, so I started a running list that I've copied below. At the end of this post, I'd love for you to weigh in with your thoughts on this subject. Any ideas and perspective you can provide as a customer will help us make informed decisions as we move forward.

Pros

  • It's secure. Really secure.
  • It is a great deterrent. Why even try to hack an account when you know a secondary token is going to be needed (and only good for a few seconds)?
  • It can keep you or your company from being in the news for all the wrong reasons!

Cons

  • It's slow and cumbersome ... Let's do some math, 700 employees, 6 logins per day on average means 4200 logins per day. Assume 4 seconds per two-factor login, and you're looking at 16,800 extra seconds (4.66 hours) a day shifted from productivity to simply logging into your systems.
  • Users have to "have" their "something you have" all the time ... Whether that's an iPhone, a keyfob or a credit card-sized token card.
  • RSA SecureID was HACKED! I know of at least one financial firm that had to turn off two-factor authentication after this came up.
  • People don't like the extra typing.
  • System Administrators hate the overhead on their systems and the extra points of failure.

As you can start to see, the volume of cons out weigh out the pros, but the comparison isn't necessarily quantitative. If one point is qualitatively more significant than two hundred contrasting points, which do you pay attention to? If you say "the significant point," then the question becomes how we quantify the qualitativeness ... if that makes any sense.

I had been a long-time hater of two-factor authentication because of my history as a Windows sysadmin, but as I've progressed in my career, I hate to admit that I became a solid member of Team Two-Factor and support its merits. I think the qualitative significance of the pros out weigh the quantitative advantage the cons have, so as much as it hurts, I now get to try to sway our senior systems managers to the dark side as well.

If you support my push for further two-factor authentication implementation, wish me luck ('cause I will need it). If you're on Team Anti-Two-Factor, let me know what they key points are when you've decided against it.

-@skinman454

December 20, 2010

SoftLayer Market Positioning: Bang v. Buck

SoftLayer's goal is to compete on performance and control, not price. The hosting industry is crowded with competitors undercutting each other on prices, and we don't want run in the race to the bottom.

A few weeks ago, about 18,000 customers officially became SoftLayer customers. Over the past decade, they joined the fold under the banners of The Planet, EV1Servers, RackShack, ServerMatrix and maybe a half-dozen other brands. Each of those brands was positioned to appeal to specific market segments, but they shared the same pursuit of "value" to offer customers the biggest bang for their buck. There are two approaches to providing that kind of value:

  • More bang.
  • Less buck.

In many cases, the "less buck" strategy was adopted. SoftLayer takes the contrary approach by maximizing the "more bang."

If I were to put it more presidentially, I'd say, "The 'less buck' stops here."

I get to chat with customers on Twitter, Facebook, the blog and the forums, and a lot of my interactions have been about pricing: "I used to get X server for Y, but now it costs Z." The trouble is that it's tough to compare many of the offerings apples-to-apples.

If you were to create an apples-to-apples server comparison, you'd see that a SoftLayer server is the equivalent of a server from The Planet with a KVM, a private network, additional geographic network points of presence, increased network capacity, the ability to select where you want your server provisioned, faster provisioning, seamless integration with cloud solutions, and a lot more automation... And these are just the differences that came to me as I was writing.

As a customer of The Planet, you could choose to omit many of the features above. As a customer of SoftLayer, we want you to be able to take advantage of the platform that was designed holistically to making growing and maintaining your hosted environment easier. The platform's architecture was dreamt up in garages and living rooms by folks that live and breathe technology:

"It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do." – Steve Jobs

The reactions I get when I talk about the features included in a SoftLayer server range from, ""Wow. I had no idea," to, "I don't care. I don't need any of that stuff," and as you're reading this post, you may have already decided your stance. If you don't see value in the SoftLayer platform, we might not get your next server-worth of business, but if you have just been looking at the dollars and cents, I'd encourage you to investigate some of the features of the platform and ask questions about how it might make your environment easier to manage.

Along the lines of the platform being built for the future, I have a question for you: What would you change about the SoftLayer platform? What is it missing? What do you want it to do that it doesn't do yet?

-@khazard

January 18, 2010

Maintnenance FTW

I am a bit of an automotive enthusiast, so when I'm not working, I do spend a fair amount of time browsing automotive websites. I, like many people in the hosting industry, crave information. I like hearing about new design directions, emerging technologies, and past stories about others' experiences with their vehicles. While browsing, I came across some images of the guts of a BMW that had gone in excess of 60 thousand miles without an engine oil change. Needless to say, the internals were slathered with a gummy sludge and the engine was ruined.

Many technologies we use these days have become so common place and are operationally intuitive enough that we are often able to figure them out and use them without ever having to crack open an owner’s manual. I bring this up because, many technologies in the hosting industry follow suit. There are a number of developers who create software that is designed to make it easy to host websites. They are marketed as the only solution you ever need and, in some cases, imply that all you need to know is how to use a web browser to successfully host websites, not only for oneself but a plethora of other clients too! The servers run themselves, and you only need to spend a few minutes setting your clients up! It's like free money!

Unfortunately, as the owner of the previously mentioned BMW found out, this is not the case. There are a lot more things going on behind the scenes than just seats and a steering wheel, as are the same with servers. On occasion, we receive support tickets that just say "the site stopped working." In an attempt to gather more information, we will often ask the client a wide range of questions that help us find the problem faster and come up with the best possible solution. However, sometimes the answer from the customer is, "I haven't touched or logged into the server in days/ months/ (hopefully not) years." The more relevant metaphor for this is, "I haven't changed my BMW's oil in years!" Servers are like any other complex machine. They require constant maintenance. This includes: updating anti-virus definitions, monitoring bandwidth usage for anomalous spikes, rotating logs out if they are getting too large (provided some other rotation scheme is not already in place), keeping an eye on disk space usage, and creating a disaster recovery plan and backups. So take some time, get to know your server, and familiarize yourself with good preventative maintenance techniques. Your server, your clients, and your BMW (if applicable) will love you for it.

October 7, 2009

GAHAP Revisited. Otherwise titled “Credit Analysts, Statistics, and Common Sense”

From time to time, I have posted about my frustration with GAAP accounting and traditional credit analysis and how it is not friendly to the hosting business model. For a refresher, click here, here, here, here, and here. By GAHAP, I jokingly mean “generally accepted hosting accounting principles.”

Mike Jones came in my office after a frustrating phone call with a credit analyst. They were trying to talk through collateral possibilities. He told me that the credit analyst has a problem because we carry hardly any accounts receivable. The credit analyst wants something that he can collect in case of default. In GAAP (generally accepted accounting principles), accounts receivable is the total amount that you have billed your customers but have not yet collected from them. Common sense hint: the accounts receivable balance won’t pay your bills – they won’t get paid until you collect the cash.

SoftLayer includes this common sense in its business model. Rather than send out invoices and bug people to pay us later, we choose to have our customers pay us in advance of their use of products and services. Many other hosting companies do the same. There are many advantages to this: we save costs that we would incur collecting the cash, we reduce the amount of abusive accounts that would sign up for a few days of malicious activity and never pay us, and it helps facilitate the on-demand billing side of the cloud computing model.
Again, the disadvantage of this practice comes about when trying to educate a set-in-his-ways credit analyst about our business model. Here is the basic gist of a mythical conversation between a credit analyst and a hosting company:

Credit Analyst: “I see you don’t have any accounts receivable to speak of.”

Hosting Company: “I know! Isn’t that great?”

Credit Analyst: “But if you default, what can I collect?”

Hosting Company: “You’d simply continue to bill the customers for their continued business. Because our customer agreement is month-to-month, you just collect for their next month of service over the next 30 days and you’ve essentially done the same as collect receivables. In fact, that is far easier than collecting past due receivables. We’d be happy place the anticipated next month billing to our customers on the balance sheet in an accounts receivable type of account, but GAAP does not allow this.”

Credit Analyst: “Oh my…you don’t have long term contracts? So all of your customers could leave at once? Isn’t that risky?”

Hosting Company: “We have several thousand customers who trust us with mission critical needs. They will not all leave at once. Our statistics show only a very low percentage of customers terminate services each month. Even through the depths of the recession, we had more new customers joining us than we had customers leaving.”

Credit Analyst: “But conceptually, they could all leave at once since they have no contracts.”

Hosting Company: “That is statistically impossible. The odds of that event are so low that it’s immeasurable. As I said, we provide mission critical services to our customers. To think that they will all no longer need these services simultaneously is paranoid. And if they did, would a contract keep them paying us? That’s doubtful. Let me ask you – do you lend to the electric company or the phone company?”

Credit Analyst: “Of course.”

Hosting Company: “Do their customers sign long term contracts?”

Credit Analyst: “Some do for special promotions. But for the most part – no.”

Hosting Company: “So why do you lend to them?”

Credit Analyst: “Why, the customers can’t live without electricity or phones. That’s a no brainer.”

Hosting Company: “It is exactly the same with our business. In this information age economy, our customers cannot live without the hosting services that we provide. You should look at us in a similar way that you look at a utility company.”

Credit Analyst: “But we classify your business as a technology company. Can’t you just have your customers sign contracts?”

Hosting Company: “Well, wouldn’t that conflict with the on-demand, measured billing aspects of cloud computing?”

Credit Analyst: “I guess there’s not much hope of you building up a sizeable accounts receivable balance then.”

Hosting Company: “It really makes no sense for us to do that.”

Credit Analyst: “We may not be able to do business with you. Do you have any real estate?”

Conclusion: Most credit analysts are so wrapped up in GAAP that they’ve forgotten the laws of statistics and many have even lost touch with common sense. Is it any wonder we’ve had a big banking crisis over the past couple of years?

April 7, 2008

Another Record SLales Day!

Well, we’ve done it again! Last week we had a record SLales day and a monumental achievement for Team Softlayer. We sold and fully delivered 208 servers last Monday breaking our previous record of 117 in a single day. There will be no official press releases about this or anything like that other than this blog, this is normal day to day operations here at Softlayer, or as I like to call it – Monday.

We are indeed making quite a dent in the hosting industry, who else out there can claim that they can accomplish this colossal achievement? We are growing at a massive rate here and all the while keeping the same high level of service that we have worked extraordinarily hard to earn and maintain.

We’ve come a long way since the opening of our doors 2 years ago. However we still have a long way to go. We have our Washington DC datacenter coming online in May to offer better service to our East Coast and European clients and we have integrated our new API 3.0 for our clients to have even more control over there servers and our services never before seen in the industry today. 2008 is going to be an astounding year for our clients as well as Softlayer.

We’ve come a long way, and we still have a long road ahead of us but in closing, our better is better than the competitions better.

-Michael

Categories: 
July 30, 2007

Being in Sales

Being in SLales (SL + Sales = SLales - we're so clever), I talk to around 200 people or so a day via email/tickets/telephone/chat/etc. I like to think of our SLales team as the "A" team in the industry. Going along with Jason's “we wear many hats”, we must have detailed knowledge of every single product and service that we offer -- networking capabilities, what program/software/application works with what hardware all the while fitting what each particular clients unique needs are into their budget.

A typical day for the SLales team involves getting to work and going straight for the Monster or coffee (or both) depending on your preference. Get to our cubes and login to our side of the customer portal, chat and check our email. This is when the fun begins. Immediately we are engaging people on chat, catching up our shared SLales and personal email inboxes, talking to clients or potential clients on the telephone, verifying orders, IMing with different divisions, putting through payments, credit card changes and grabbing tickets from existing clients looking to cut a deal for upgrading and/or adding servers and services – all at the same time. We take multitasking seriously here!

On top of all of that we have to make sure that customer billing is accurate when ordering these services depending on the deals we have available, which are always going to be inventory-based. Also, we are making sure that everything is working correctly on each customer's server and if not, coordinating a game-plan to make sure that the client is satisfied and running along smoothly, as quickly as possible.

At the end of the day we want all of our clients to be comfortable, happy, making money and enjoying themselves – because if you are, we are too!

-Michael

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