Posts Tagged 'Value'

April 13, 2012

Looking at the Big Picture

Last week, the SoftLayer team attended ad:tech San Francisco. It's pretty unbelievable to think that it's only April, and this show was the seventh I've attended this year. 2012 has already been a HUGE year for SoftLayer in terms of growth, and our trade show and conference schedule has provided a fantastic outlet to share some of the good news. In addition to the seven shows I've attended, SoftLayer has exhibited at six more, and each has it's own unique focus and audience — ad:tech in particular.

At most shows, the conversations I have can be best described as "technical." I'll field questions about our network capacity, hybrid environments, API functionality and data center pod architecture. The attendees that stop by and talk to us are typically technical members of IT teams familiar with their hosting needs and interested in learning about our cloud and dedicated environments. At ad:tech, the attendees that I talked to were more interested in "big picture" differentiators and the non-technical value that SoftLayer provides, so I got to tell the SoftLayer story in a fresh way.

Most of our ad:tech conversations were in a theme of managed hosting, flexibility, short-term resource availability and scalability. The attendees that stopped by our booth were no less qualified as customers than the IT administrators we might meet at other shows, but they couldn't be won over with the industry-leading numbers we would normally share ... They were more interested in hearing about the Super Bowl campaigns we've supported, the streaming media services we host and some of the high-profile clients that attest to platform's ability to handle anything they can throw at us.

The messaging on our booth graphic set the stage perfectly:

Our Platform.
Your Vision.
Build on a global cloud infrastructure at Internet scale. Blur the lines between physical and virtual. Bend infrastructure to your imagination. We've created the platform on which you'll create tomorrow.
Build the future.

The most surprising observation I made at ad:tech was that despite the "big picture" conversations I tended to have with attendees, they were all equally (if not MORE) interested in our Server Challenge:

ad:tech Server Challenge

During the two-day conference, these "non-technical" attendees completed the challenge with an average time of 1:37, and this show's Server Challenge champion, Rany Grinberg, walked away with a "new iPad" after recording a blazingly fast 0:58.34 time. They might not have been able to tell you what all the pieces in our server rack did, but they could definitely put it back together quickly.

I had a blast meeting all the attendees who stopped by our booth. If you happen to be one of those people, thank you for visiting us ... Now start studying and practicing to take on the Server Challenge again at our next show!

-Summer

Categories: 
November 25, 2011

Online in Amsterdam: Innovators Wanted

Since I started with SoftLayer a couple of months ago, I have been asked by industry analysts, customers, interviewees and my drinking friends ... ahem, I mean networking event associates, "Why did SoftLayer choose Amsterdam for its European headquarters?"

My answer has always been consistent: It's all about the products and the people.

On the product side, having our data center on the AMS-IX gives us lightning fast connectivity to one of the biggest data exchanges in Europe. Combined with our 10GB PoPs in Frankfurt and London, it means we have minimal latency, so your customers are happy. With these arrangements, we're able to extend the ability for customers only to pay for outbound public traffic. Did I mention that the three-tier network is up and running? Public, private and management ... Okay, okay, you get it: Being in Amsterdam extends our industry leading global network.

Amsterdam is not the only game in town where we could get a great connection, though. SoftLayer wanted to make the other kinds of connections to grow a global business ... connections with the right people.

It was not that not that long ago when ten guys were working out of a living room to change the way hosting was done. Now you're reading the blog of a global company with several hundred million in turnover, and the entrepreneurial spirit is stronger than ever. SoftLayer wanted to be in a place where we could hire and conspire with other global pioneers, and with Amsterdam's long history of creativity, innovation and global trade (not to mention Oliebollen), SoftLayer selected Amsterdam for its EMEA HQ.

This video from Don Ritzen and the Rockstart Accelerator team articulate the environment we are glad to be a part of:

With the Amsterdam data center officially online, we've had a chance to get out of the facility and into the community, and we are fitting right in. A couple of weeks ago, I was honored to speak at the Appsterdam Launch Party 2.0 Overwinter. The Appsterdam team is developing an infrastructure so that startups can more easily thrive and focus on what they do what they do best: innovate.

Mike Lee, mayor of Appsterdam asked all the speakers to tell the pan-European audience why we were speaking at the event and what we had to offer the developer community. For me it was an easy answer: We bring automated on demand hosting infrastructure to the community so people can focus on building great products. We also support the community with a referral program, so if developers refer clients to SoftLayer, we will pay them a generous commission ... Not to mention that empowerment and innovation are core SoftLayer values, so we will continue to improve our platform so our customers can control their IT environment with the latest and greatest technologies in the industry.

Needless to say, the audience was intrigued. And I didn't even show them what a SoftLayer pod looks like ...

SoftLayer Amsterdam
SoftLayer Amsterdam

We're looking at the tip of the iceberg in Europe, and we're ecstatic about the opportunities and possibilities that await us as we build on our foothold here and continue our worldwide expansion. If you want to join a young startup-like team in Amsterdam, we want to hear from you ... We're hiring like crazy right now: SoftLayer Careers

-Jonathan

October 24, 2011

NOT Lost in Translation

When I attend conferences, I always try to make sure that I communicate what we do the best way I can. With our new data centers opening up in Singapore and Amsterdam, I was curious to see what a SoftLayer message would look like in the two countries' most prominent languages. With the gracious help from local representatives, we have our English message translated into Mandarin, Malay and Dutch.

English
We are the largest private hosting company in the world, providing cloud, dedicated, managed and integrated computing environments to over 25,000 customers around the world. We have recently added additional data centers and now have facilities in Amsterdam, Dallas, Houston, San Jose, Seattle, Singapore and Washington D.C., and network Points of Presence worldwide. On top of that, we have automated every part of our platform, giving our customers complete control, security, scalability and ease-of-management through the best Customer Portal and Open API in the industry.

Mandarin
我们是世界上最大的私人网站住办有限公司,带给全球超过25000客户的服务包括云计算,专用主机,主机托管和综合计算。最近,我们增加了额外的数据中心,现在已在阿姆斯特丹,达拉斯,休斯顿,圣何塞,西雅图,新加坡,华盛顿等拥有设施,网点遍布全球。最重要的是,我们自动化了每一个平台的部分,用同行业最好的客户门户和开放的API体系为客户提供完整的控制,集安全性,可扩展性,和易于管理与一体的服务。

Malay
Kami adalah syarikat swasta yang terbesar di dunia yang menyediakan pengkomputeran awan (cloud), hos berdedikasi yang diurus dan diintegrasikan ke dalam infrastruktur pengkomputeran untuk lebih daripada 25,000 pelanggan kami di seluruh dunia. Kami baru-baru ini telah menambah pusat data tambahan dan kini mempunyai kemudahan-kemudahan di Amsterdam, Dallas, Houston, San Jose, Seattle, Singapura dan Washington DC dan juga rangkaian "Points of Presence" di seluruh dunia. Selain itu, Kami telah mengautomatikkan setiap bahagian platform kami, memberikan para pelanggan kami penuh kuasa dan kawalan, keselamatan, kemampuan yang luas dan kemudahan pengurusan menggunakan pelanggan portal kami yang terbaik dan API terbuka (Open API) di dalam industri ini.

Dutch
Wij zijn het grootste, private hosting bedrijf in de wereld dat voorziet in cloud, dedicated, managed and integrated computing-omgevingen voor meer dan 25.000 klanten wereldwijd. We hebben recent extra datacenters toegevoegd en hebben nu vestigingen in Amsterdam, Dallas, Houston, San Jose, Seattle, Singapore en Washington DC en netwerk Points of Presence over de hele wereld. Bovendien hebben we elk deel van ons platform geautomatiseerd, waardoor wij onze klanten volledige controle, beveiliging, schaalbaarheid en gemak van beheer bieden met behulp van het beste Customer Portal en Open API in deze bedrijfstak

Back to English
While I might not be able to communicate those translations in conversation (yet), it's an incredible visualization of how SoftLayer is growing and changing. It's also exciting to think about how many more languages we'll need to include next year!

-Summer

October 10, 2011

A Manifesto: Cloud, Dedicated and Hosting Computing

We are witnessing a fundamental shift in the IT industry. It is forever changing the way technology is delivered and consumed. The pay-as-you-go model for everything you need in IT is shattering the old computing paradigms, from software licensing models and hardware refresh cycles to budgeting operating costs. This change is bringing about more control and transparency to users while accelerating the commoditization of IT by making it easily available through a new model.

This new model comes in three major "flavors": Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) solutions. We incorporate and enable all three by offering a unified, fully automated platform to enable greater customer control over their IT environments. The key tenants of this emerging model for SoftLayer are innovation, empowerment, automation and integration. Here's how we deliver against these four key tenants.

Innovation: We want to lead the industry by offering best of breed and proprietary cloud, dedicated, and managed hosting solutions, based on our own intellectual property. Currently, we have more than 252,000 hours invested and 2.6 million lines of code developed around these solutions. Customers can take charge of every aspect of their IT operations (servers, storage, networking & services) through our fully automated platform. Our Customer Portal and fully featured APIs give customer more control by providing direct access to more than 100 back-end systems and activities — every aspect of IT operations can be managed.

Empowerment: We turn IT operations into a predictable fixed cost. Customers can stay focused on achieving their business goals, not managing IT infrastructure. We offer expert planning and support from a certified, 24/7 support staff. Customers can deploy and scale when they want with one-day and on-demand automated provisioning. They can keep it as long (or short) as needed, with monthly contracts. In addition, customers can choose what they want to manage and what they don't, with the ability to have hybrid IT self-managed and managed environments. This speaks to the flexibility of our platform!

Automation: This is an area that makes SoftLayer stand out from the pack. We automate deployment and management of all services, accelerating provisioning time, streamlining administrative tasks, and making it all on-demand, every day and night. With automation that mitigates the risk for human error, comprehensive security practices and options, and a 24/7 team of certified engineers, we provide greater stability, a 100% Uptime Guarantee, and around the clock support for any issues or service.

Integration: This is the final ingredient to making it ALL work. We seamlessly integrate hardware, software, and networking into a unified service, all conveniently controlled through our easy-to-use Customer Portal and robust APIs. We provide full information, full-time through our Customer Portal and APIs, for every service we provide; there is no data about a system that we keep from our customers, from usage statistics to network performance and beyond. We have complete transparency.

These four key tenets are what set us apart. When SoftLayer started back in 2005, the team's goal was not to be Go Daddy on steroids. We set our sights on being the de facto platform for mainstream businesses to run all their IT operations. This means the complete gamut of applications and workloads with no compromise of performance, security, reliability and access. We are entering into a new IT era, where "connected everything" is the norm. It reminds me of the old phrase "the network is the computer" from Sun Microsystems' slogan. We have the foundation in place, which will make for an unforgettable journey. Let us know what you think.

-@gkdog

May 5, 2011

Giving Customers More Than They Expect

Giving a customer the ability to do something that they didn't know they could (or even know was possible) can make for an exceptional customer experience.

I've had a season mini-pack of Dallas Mavericks tickets for a handful of years now and have always gotten the exact experience that I expected: The same seats every time, consistent food and drink, great entertainment, and a quality team on the court that wins considerably more often than not.

However, this year it's been a little different. This year, they have thrown in several perks that cost them nothing or next to nothing but have made a huge difference in the overall experience.

One game in particular sticks out in my mind. A couple of weeks before a game against the Wizards, I got an email about a no-cost chance for me and one other person to stand in a high five line to give fives to the players as they came out for warmups. I had no idea fans actually got to do this, so I gladly signed up and took my 5 year-old son to the game. I had also received an invite from the sales rep to choose a date to spend the first half of a game in one of the suites, so I made it the same night.

That night, we joined a small group of people down by the tunnel before the game, and we got to give all the players, Mark Cuban, the Mavs Maniacs and even a few security guards high fives. My son was over-the-moon to "meet" his favorite players - Dirk, Kidd, and Jet - could hardly contain himself.

This game also happened to be the week before the Super Bowl. I only mention it because on the way to our suite, I was blinded by the biggest ring I had ever seen. It turned out to be a Super Bowl ring and the guy wearing it was James Harrison (the linebacker for Steelers that lost a bunch of money to fines for helmet to helmet hits last season), so I got to meet him and wish him luck for the big game.

Oh, and and I can't forget to mention the free hats, shirts, and Roddy B. bobblehead.

Long story short, I probably couldn't tell you who won the other ten games I went to this year, but I don't think I'll forget anything about this particular game.

The thing I took away from this experience is when you give a customer something above and beyond what is expected, however seemingly insignificant, you can monumentally improve their customer experience.

To bring it back around to SoftLayer, we give customers a great API - a REST API at that. We give them VPN, a private network, IPv6, and a fully provisioned server in a couple of hours. Each of these differentiators enables us to provide products and services that our competitors can only hope to imitate.

The first time the customer uses the API to automatically create a new Cloud Instance from their own program, it'll be a Maverick-game experience. When they transfer data from Washington, D.C., to San Jose, CA, on our private network with zero bandwidth charge, they'll feel like they're high-fiving Dirk Nowitski. When they access their server over the free KVM over IP, they're walking up to the suite and meeting a Super Bowl champion. And all of that is on top of a stable, speedy server environment!

What can we do to improve your customer experience?

-Brad

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

July 29, 2010

What Makes SoftLayer Different?

I often get asked “what makes SoftLayer different?” The problem with that simple question is – SoftLayer is so different from all the competition out there that it’s not a simple question to answer. I have my standard version that I run thru – but I’m not sure people really grasp how different SoftLayer really is. After talking to my wife, she recommended doing a Letterman style top 10 reason why SoftLayer is different. I figured I would give it a shot – so here it is..

  1. SoftLayer terminates 40Gbps to every single rack!! 20Gbps to the public internet and 20Gbps to the private network.
  2. SoftLayer offers three types of VPN services for out-of-band connectivity (SSL, PPTP, IPSEC)
  3. SoftLayer manages its own nationwide MPLS network with 10 PoPs and over 1000Gbps of transit and peer connectivity
  4. SoftLayer offers free enterprise grade DNS services through our DNS farms located in all 10 PoPs in North America
  5. SoftLayer has over 1600 APIs for custom integration, a full service control panel for ease of use and a private label option for resellers
  6. Every single server in every datacenter is a rackmount, hotswap, tool-less chassis offering enterprise grade hardware with ultra-fast modifications
  7. SoftLayer has downloadable iPhone, Android and Blackberry apps in addition to our mobile phone friendly .mobi site for complete control.
  8. Only hybrid solution available – dedicated, virtualized, and cloud instances operating in a single environment and control thru a single interface or API
  9. Private Network – connect any server to any other server in any datacenter with a click of a button
  10. Fastest service delivery
  • Over 1000 servers in stock
  • Dedicated servers – 4 hours or less
  • Servers with virtualization – 2 hours or less
  • Cloud instances & storage – 5 to 15 minutes
  • Firewalls, Load Balancers, SAN Storage – added real time w/ no downtime

-@lavosby

November 11, 2009

Viva Las Vegas!

I just got back in town from Las Vegas, Nevada. That town is filled with stories and you can really love it or hate it, depending on the hour (or if you are like me whether you are arriving into McCarran or departing). I had a great trip this last go around and actually made money on the tables. However, when they say that what happens in Vegas stays in Vegas they are really talking about your money. Never forget that the house always wins. Always. Even if you win money you’ll wind up spending it on stuff out there and perpetuating your own good time. There isn’t anything wrong with this at all. In fact I plan on coming up on the short side of the stick on both the tables and on simply spending cash when I go out that way.

I think the really interesting thing that happens when you go through “the Vegas experience” is the perceived value of a dollar. You can take it for granted that all of a sudden you are transplanted into this fantasy world that is reminiscent of Pleasure Island from the story of Pinocchio and you’ll find that you have anything and everything you could want to do, eat, drink, or experience right at your fingertips. As this begins to progress the value of a dollar plummets quickly. You start overpaying for things at a whim, tipping bigger, making bolder and even just dumber bets. I did this and I can admit that I doubled down on my 11 when the dealer was showing a 10 in blackjack. It was blind luck that I hit it and won every single time. It’s a bold and stupid bet to make, but when you are playing with house money the money doesn’t matter and it’s almost as if you are trying to give it all back. My game of choice is craps because it gives you the best odds and there is a lot of action. It’s good and bad as it can all come and go in a hurry.

I have only been to Las Vegas a handful of times, but each time there is a point where even for a second you can feel invincible – that you can’t lose. Or, that even if you do lose you won’t even care. The flight home is a completely different story. I call it the hangover flight. You may be literally hung over, but no matter what, you will start to deal with all of the actions that happened on your trip and how you will need to handle them. As soon as you touch down in your own home town things slowly start to become “real” again. Your own home can even feel somewhat foreign for a while, but you’ll quickly come to the realization that you had become a completely different person for a short time.

I have come to the conclusion that there is always risk in everything that we do. Exposing yourself to the tables of Las Vegas may carry more financial risk than your morning commute to work, but in both cases there are still risks. There are also risks that we take in setting and running a business. There are countless ways that you could be putting your business at risk without the right plan in place. From an IT perspective alone, you need to consider things like redundancy, failover, security, backups, growth, and even data loss. Knowing what is going to happen next for your business may be as likely as knowing what is going to come up on the next roll of the dice. If you know this for certain you can press your luck and come up big, but if you are not prepared you could lose everything you have on the table. It is better to be prepared.

I think of SoftLayer as the house, and remember as I said before, the house always wins. The good thing about this is that you are betting with the house. Even with this you need to bet on yourself and back up your own bet. If the bulk of your business is in your data then you need to have backups. If you absolutely need to have High Availability, then look into Clusters and Load Balancing. But remember, that you are betting with the house because SoftLayer gives you the capacity to do all of it and do it all at a very affordable price compared to trying to do it yourself and also do it without long term commitments. Long term commitments bring the most uncertainty in making moves that will positively affect your business. Imagine if a casino told you that you “had” to make 12 consecutive bets regardless of how well (or poorly) you were doing?

Coming home from Las Vegas to SoftLayer has been a very good thing and makes me thankful for where I am and what I have. There aren’t the levels of uncertainty here that are automatic with other datacenters or even other business models. SoftLayer is steady and it is very easy to get what you need here while cutting out the risk that you don’t want to deal with. SoftLayer is as much of a “sure thing” as any bet you can make!

December 13, 2007

Avoid Gift Cards!

I live in America, and as any American knows, we pipe Christmas Music and Christmas TV and Christmas Movies directly into the brains of as many people as possible to attempt to keep everyone safe during this difficult shopping season.

Admit it: when you and your neighbor are running to Electronics in hope of getting the last Wii from the shelf, sometimes the only thing stopping you from dumping a bag of Skittles in front of him or knocking over a Lego display is the constant barrage of Rudolph and Frosty and other Christmas cheer over the PA.

Unfortunately, unless you are content to give everyone a copy of Dryping for Dummies (By Steve Kinman, SoftLayer Press), you will have to wade into the shopping rush to eek out your Santa sized bag 'o goodies.

Never fear, however! The Retail Industry is there to help! For those who don't want to dive head first into the excitement of Christmas Shopping (which can make even a foray to pick up some toilet paper from Wal*Mart into an exciting 2 hour adventure), nearly every retail outlet is willing to give you a 2" x 3" credit card like piece of plastic stamped with their brand. Yes, the Gift Card.

It's been said that over 60% of American adults have either bought or received a Gift Card, this year. It's a very convenient device. For example, if I figure out that Lance really likes Outback Steakhouse, I can buy a $10 gift card from Outback Steakhouse, wrap it in a $1 Hallmark card (although, sometimes the retail outlets already have such cards (stamped with their logo) available), and give it to Lance. "Merry Christmas!" Sometimes you can even get the card gift wrapped.A gift-wrapped credit card!

We're to the point, now, that simply handing somebody a plastic card is actually considered a thoughtful gift. On the way to work, I heard that any fishing lover would prefer to receive a Bass Pro Shop Gift Card over, say, that Bassomatic '76 they've been talking about.

But, lets be honest... it doesn't take much to choose a gift card. I overhear Lance say he likes steak, I see a Outback Steakhouse card, and bam! Before you can say "Impulse Purchase" I now have an instant gift! Sure, it's not as fulfilling as, say, a box of prime steaks... but this way you can give him more gift cards! And more is better, right?

But the comedy doesn't end there. Have you ever seen a gift card in a usable denomination? Usually I find cards with a value between $10-50. Can you even get a steak meal for $10 at Outback Steakhouse? (Don't forget to include the State and Federal Wallet Excise Tax.) And I'm not talking about that free bread, either. No, what happens is you end up either leaving a trifling amount of money on the card (Your balance is ... twenty five cents), or you end up wrapping your card in a sizable amount of cash. See how neat this is? I bought a $10 card, and Lance will pay the balance of the meal... AND STILL THANK ME FOR IT!

Retailers make MILLIONS of dollars off the trifling amounts that just sit, unused, on gift cards. And gift cards aren't usable at another store, so if I want to buy a $20 book, but I only have a $10 Half Priced Books gift card (and a $10 Outback Card Lance gave me as a Thank You), I'll use the card + $10. You can almost never just spend what's on the card.

Here's some friendly holiday advice: If you know what your friend wants, buy it for him. If you don't, ask people close to him. Even Aunt Myrtle's sweater contains more holiday cheer value than the sweater's monetary value in McDonalds Gift Cards.

Is there a way out of this trap of value-locked slivers of plastic? Indeed there is! If you wish to transfer value to another person without locking them into one choice, give them... CASH! Yes, greenbacks, bucks, dead presidential portraits, green... whatever you call it, United States Federal Notes are accepted by all retailers, in any denomination. Value not used by one retailer can then be spent at another. This value can also be stored up where it may earn interest and combine with more legal tender until a large item can be bought. The best solution for any gift giving problem where "Gift Cards" are suggested as a solution is CASH, such as when you absolutely can't think up something to buy. And it makes a great stocking stuffer. In Bulk. Hint, hint.

Yes, you in the back? What does this mean for SoftLayer? Just because this is a SoftLayer Blog doesn't mean it has to have a SoftLayer moral! But lucky you... I've got one right here: (this weekend only, special holiday financing available!)

Like Gift Cards, each SoftLayer server comes with a bloc of value attached: bandwidth. This valuable commodity makes the servers work. You can have all the processing power in the world, a RAID 75 array with 100 petabytes of space, 40 terabytes of onboard memory, and if you don't have any bandwidth... it's all moot.

Unlike gift cards, however, SoftLayer attaches some real value you can actually use. For many users, even touching the top of the 2 Terabyte bandwidth pipe is a real exercise.

However, sometimes, like gift cards, a customer buys a server with value attached... but simply cannot use it all. Or they put the server 100% on the private network and never use the bandwidth at all (Like that $20 gift card from Sludge Emporium your Granddad gave you last year). Is there any way to salvage this value?

Indeed! The SoftLayer Secret Labs rolled out a new feature a while back: Virtual Dedicated Racks. These VDR's (as we cool SoftLayer Secret Lab Technicians like to call them, because TLAs are cool) allow you to virtually rack a group of servers behind a virtual bandwidth meter. All the attached bandwidth value of those servers are lumped together, like a good 'ol pile o' cash, and the aggregate amount attached to the rack. An example:

Each server comes with 2T bandwidth (generally).

Without VDRs, if server bassomatic.76.example.com only uses 1T of bandwidth, and server auntmyrtle.sweaters.example.com uses up 3T, you end up with a full 1T overage on Aunt Myrtle's site, even though you have a full 1T worth of value on the other server not being used!

With VDRs, the two servers pile their value together, making a 4T rack. Bassomatic.76.example.com uses 3T this month, while Aunt Myrtle's site only uses 1T. Combined, their "rack" uses 4T of 4T, so 4-4 = 0!

Like cash, but unlike gift cards, with VDRs you are able to pool your value to allow the usage of more value at one time. Now how awesome is that?

If you would like to experience the excitement of pooling your bandwidth, talk to your SPS (as we cool SoftLayer Secret Lab Technicians like to call our SoftLayer Professional SLalespersons, because an acronym is still a cool TLA as long as only three letters are capitalized), and get yourself a Virtual Dedicated Rack (make sure to call it a "VDR" when you order it to sound cool).

And let 'em know this post by Shawn got you interested. If I get enough referrals, I'll get the December SoftLayer Referral Outback Steakhouse Gift Card!

-Shawn

Categories: 
November 16, 2007

The Value of a Customer

For the two people who actually read my posts, you know that I blogged about how I look at the value of a server. Basically, it should be valued by the cash flow it produces. Without a customer to use the server, the cash flow it generates is negative, i.e., less than $0 due to the costs of keeping it racked up, powered up, and connected.

So, how do you place a value on a customer? Customers and servers are not a one-to-one connection because many customers have more than one server. They also buy more than just servers, such as additional software and/or backup services.

Like most of us in the industry, I spend a few minutes each day scrolling through the customer forums, both ours and 3rd party sites – you probably know which ones :). I look at the customer comments and sometimes I wonder if the folks in our industry understand the value of these customers judging from the way some customers are treated.

Granted, some customers are abusive and need to be fired, so to speak. Others appear to be high value customers with multiple servers and solid business models where someone has dropped the ball and caused them to seek greener hosting pastures. If companies understood the dollar figure valuation of each customer, they might think twice about their next course of action with a particular customer.

To value a customer, I look at the statistical expectation of how long that customer will stay with the company, how much the customer currently buys with us, the statistical expectation of how much additional business they will place with us, the gross profit generated by the customer, and that old stand-by -- the minimum acceptable rate of return for an investor in the company. From these data points, I do a simple Present Value calculation and arrive at the value of the customer, which is the amount of cash that would have to be invested to yield the economic equivalent of the expected gross profit that the customer will produce. I'd give you a sample calculation, but a) it would make this post even more boring, and 2) some things we like to keep secret :).

This is important because it can make the growth of a hosting company less "slippery" -- sort of like when Eric takes off from a red light in this:

For example, if you sell 100 new servers but customers release 90 back to you during the same period, your growth doesn't have the traction it would have if only 10 servers were released back to you. By retaining valuable customers, you don't spin your wheels as much. Spinning the tires at a hosting company is not nearly as much fun as watching Eric drive.

-Gary

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