Posts Tagged 'Pricing'

September 11, 2014

The Cloud Doesn't Bite, Part II

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

(This is the second post in a three-part series. Read the first post 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.

"[With the cloud], someone you don't know manages [your cloud servers], and they can get really unaccountable at times."

Hmm. Sounds like somebody's had a bad experience. (We're sorry to hear that.) But in truth, cloud computing companies are nothing without reputation, integrity, and, well, security upon security upon security measures. Accountability is the name of the game when it comes to you trusting us with your critical information. Research, research, research the company you choose before you hand anything over. If the measures that a potential cloud provider take don't cut the mustard with you, jump ship immediately—your business is way too important! But you're bound to find one that has all the necessary safeguards in place to provide you with plenty of peace of mind.

Oh, and by the way, have we mentioned that some cloud infrastructure providers put the deployment, management, and control in the hands of their customers? Yup. They just hand the reins right over and give you complete access to easy-to-use management tools, so you can automate your cloud solution to fit your unique needs. So there's that.

"The nickel-and-dime billing that adds up awfully damned quickly. Overall, if you're not careful you can rack upwards of $4k/mo just to host a handful of servers with hot backups and a fair amount of data and traffic on them."

You're right. That's why it's important to plan your cloud architecture before you go jumping in. Moving to the cloud isn't something you do with your eyes closed and with a lack of information. Know your company's business needs and find the best solution that fits those needs—every single one of those needs. Be realistic. Assess intelligently. Know your potential provider's add-on costs (if any) ahead of time so that you can anticipate them. Sure, add-ons can pile up if you're caught off-guard. But we know you're too smart for that to be a problem.

Play around with your possibilities before you sign on that dotted line. If you can't, search for a provider who'll let you play before you pay.

"Many cloud services break many privacy laws. The service provider can see/use the data too. Some of us are even bound by law to maintain the integrity of certain classes of information (personal, medical, financial). Yielding physical control to another organization, no matter what their reputation, removes your ability to perform due diligence. How do I know that what I legally have to keep private really is private?"

Sigh. Okay, we hear this fear; we really do, but it's just not true. Not for any reputable cloud solutions provider that wants to stay in business, anyway. We, grown-ups of cloud computing, take the security of your data very, very seriously. There are hackers. There are malicious attacks. There are legal compliance issues. And for those, we have Intrusion Protection Software, firewalls, SSL certificates, and compliance standards, just to name a few. We can handle what you throw at us, and we respect and honor the boundaries of your data.

So let's talk nitty gritty details. You're probably most familiar with the public cloud, or virtual servers. Yes, infrastructure platforms are shared, but that doesn't mean they're pooled—and it certainly doesn't mean universal accessibility. Your virtual server is effectively siloed from the virtual servers of every other client on that public server, and your data is accessible by you and only you. If you think about it like an apartment complex, it makes a lot of sense. The building itself is multi-tenant, but only you have the key to the contents of your individual unit.

On the other hand, bare metal servers are mansions. You're the only one taking up residence on that dedicated server. That big bad house is yours, and the shiny key belongs to you, and you only. (Check you out, Mr. Big Stuff.) You have complete and utter control of this server, and you can log, monitor, and sic the dogs on any and all activity occurring on it. Bare metal servers do share racks and other network gear with other bare metal servers, but you actually need that equipment to ensure complete isolation for your traffic and access. If we use the real estate analogy again and bare metal servers are mansions, then anything shared between bare metal servers are access roads in gated communities and exist only to make sure the mailman, newspaper delivery boy, and milkman can deliver the essential items you need to function. But no one's coming through that front door without your say so.

We cloud folk love our clients, and we love housing and protecting their data—not sneaking peeks at it and farming it out. Your security means as much to us as it means to you. And those who don't need access don't have it. Plain and simple.

"I don't want [my data] examined, copied, or accidentally Googled."

You don't say? Neither do we.

"What happens to my systems when all of your CxOs decide that they need more yachts so they jack up the pricing?"

They stay put, silly. No one takes systems on the boat while yachting. Besides, we don't do yachts here at SoftLayer—we prefer helicopters.

Stay tuned for the last post in this series, where we discuss your inner control freak, invisible software, and real, live people.

-Fayza

August 26, 2014

Bare Metal Power. By the Hour.

Think quickly. You hear that your new app will be featured on the front page of TechCrunch in less than two hours. Because it’s a resource-intensive application you know that a flood of new users will bog down its current cloud infrastructure and you’ll need to scale out.

What do you do? Choose virtual servers to guarantee quick deployment and more flexibility? Opt for bare metal servers to deliver the best user experience (while crossing your fingers that the servers are online in time for the flood of traffic)? In times like these, you shouldn’t have to choose between flexibility and power.

You need hourly bare metal servers.

We’ve streamlined the deployment of four of our most popular bare metal configurations, and with that speed, we’re able to offer them with hourly billing! With the hardware pre-configured, you tell us where you want the server to be provisioned—Dallas, San Jose, Washington D.C., London, Toronto, Amsterdam, Singapore, and Hong Kong—and which operating system you’d like us to install— CentOS, Red Hat, FreeBSD, or Ubuntu. And in less than 30 minutes, your server will be online, fully integrated with your other SoftLayer servers and services, and ready for you.

Use the server for as long as you need it. Spin it down when you’re done. Pay for the hours you had it on your account. It’s that easy. No virtualization. No noisy neighbors. Just your computing-intensive workload, the hardware configuration you need, and a phobia-proof commitment.

Why you need hourly bare metal servers in your cloud life?

  • Processing Power: You have short-term workloads that require significant amounts of processing power. To get the same performance from virtual servers, you might have to provision twice as many nodes or run them for twice as long.
    • Example: a business intelligence ELT (Extract/Load/Transform) application.
  • Schedule-based Workloads: You have a number of applications that require compute and storage resources on a set schedule (i.e., once every month), and you don’t want to deploy (and pay for) high-end machines that will sit idle at all other times.
    • Example: payroll processing or claims payment processing.
  • Performance Testing: Certify or validate how an application performs on a specific hardware configuration.
    • Example: Software or mobile application companies can validate performance on specific hardware platforms.

With bare metal performance available on demand and on hourly terms, you don’t have to compromise performance for flexibility. When TechCrunch comes calling, you have peace of mind that your app’s success and popularity won’t bring it down.

-RJ

November 7, 2008

Tax Policy as Pricing Strategy

One of the big items up for “spin” and a little debate in this Presidential election is the tax policy proposed by each candidate. We’ve heard accusations ranging from tax breaks for wealthy CEOs to socialist welfare where money is taken from the rich CEOs and given to the non-taxpaying poor under the guise of a “tax cut”. The word “fairness” gets thrown around a lot and now Joe the Plumber may get a record deal out of all this.

Absent any fiscal discipline by the government (and I have never seen this from either political party), it’s clear that the government needs more money or else it will run deficit spending until we’re all bankrupt. Therefore, tax policy should be nothing more than a pricing strategy to maximize government revenues. Taxes are essentially the government’s pricing structure for their offerings of goods and services (roads, law enforcement, subsidized student loans, etc.)

The problem is, if cutting a particular tax or tax rate will actually bring more revenue to the government, it will be criticized for whatever group “benefits” from the lower rates, regardless of how much better off the government treasury will be.

Yes, it is possible to bring in more revenue and profit by reducing prices. It is a very, very common practice in the business world and we employ this practice at SoftLayer. Consider this scenario:

You sell a product that cost you $50 to build.

At $100, you can sell 1 unit per month. Here is your revenue and profit calculation:

$100 x 1 sale = $100 revenue – $50 costs = $50 profit

Now, if you cut the price 20% to $80, you can sell 2 units per month. In this case, here is your revenue and profit calculation:

$80 x 2 sales = $160 – $100 total costs for 2 units = $60 profit

So, most people would think that $60 in your pocket is better than $50. By cutting the price, you have made more money.

What if you could sell 3 units if you drop the price to $60? Let’s take a look:

$60 x 3 sales = $180 – $150 total costs for 3 units = $30 profit

Because you only keep $30 profit, in this case the BEST price for your product is $80 because at that price you maximize the profit that you keep.

Likewise there are ways to increase government revenue by cutting tax rates. Let’s say we want to tax more dollars from the rich and give to the poor – fine. The paradox is that the way to get more tax dollars from the rich is to cut their tax rates. Really, I’m not crazy – Congress itself has reported this fact.

Business people know that if you raise your prices, people’s behavior will change and they will buy lower volume of what you sell. Even with must have items like gasoline, as the price rises, people find ways to use less of it, even if using less is inconvenient because you have to get up earlier to carpool.

By the same token, if taxes go up, those who are exposed to those taxes will change their behavior and reduce their exposure to those taxes. As a result, the government can actually collect less money by raising taxes.

Every time we set a price or run a special deal here at SoftLayer, we are well aware of this fundamental law of supply and demand. When we need to move units on a particular item, we will reduce the price.

I only wish our government would apply the same principle when pricing its products and services with tax policy – not because I want to pay less in tax but because I want the government to maximize its profit and avoid burdening our children and grandchildren with unmanageable government debt.

-Gary

Categories: 
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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