Is one of the world’s largest web hosts creating a new cloud market segment?
In my work with cloud and hosting service providers around the world, I often run across service providers that have great ideas for delivering new or differentiating infrastructure services to their prospects and customers.
I also hear many ideas that, unfortunately, are not so good.
So when we first met with Javier Salcedo Gadea and his team at 1and1.com in his office in the beautiful town of Logrońo, Spain, I was a little skeptical after he told me he was interested in not only delivering new services using SolidFire, but that his real goal was to create an entirely new hosting and cloud market segment.
1&1 is one of the largest web hosting providers in the world, with over 15 million customers under contract and a full-time staff of over 7,000. So when its head of product management for an entire line of business tells you there is a new market opportunity, you pay attention and listen to his ideas very closely.
Javier proceeded to tell us that the primary drivers of 1&1’s success are simplicity of use, speed of deployment, and of course: an attractive price. First, he stated that many small businesses don’t necessarily have dedicated IT resources and that they need a simple way to order, provision, deploy, and manage their application infrastructure.
Second, he noted that speed of deployment and quick changes to resources (RAM, CPU, and GB) were critical to meeting 1&1’s customer demands for agility — to be able to react to changes in their business very quickly.
Third, Javier told me doing both of these things packaged at a price point that was attractive and that would deliver value to his customers was mandatory.
These ideas seemed realistic and a good fit for SolidFire storage, but I still did not understand what the new market segment was until Javier described his vision further. He explained that he believed most businesses are still fearful of running their critical applications in a shared hosting environment due to performance issues, slow provisioning (lack of agility), and the sometimes high costs associated with customization of specific application environments.
What I started to realize was that Javier wanted to build a new line of business that delivered to small-to-mid-sized (SMB) companies the simplicity, speed of deployment, and an attractive price point that 1&1 customers were used to … but with the guaranteed performance, resource availability, and customization capabilities that would appeal to large enterprise IT departments.
This new market segment is the rapid delivery of demanding, dedicated-style, enterprise-class infrastructure that offers the price benefits and value proposition of a shared cloud hosting platform. He wanted to deliver a platform that enterprises and SMBs could truly trust with their crown jewel applications; something not easily delivered by the mainstream cloud and hosting market today.
After many meetings we all knew that only SolidFire’s all-flash storage with quality of service (QoS) features and robust API could do this at the scale 1&1 needed, and we moved quickly to understand the business requirements and how we could help him build service to win in this new market segment.
However, Javier needed proof that his new CloudServer platform could deliver the goods and support the performance (IOPS) demanded by his enterprise prospects. So we engaged Cloud Spectator, a U.S.-based company that performs unbiased tests of cloud and hosting providers. Cloud Spectator performed a series of independent and competitive performance tests to compare 1&1’s new CloudServer platform to some well known 1&1 competitors with the goal of demonstrating analytically to businesses that 1&1’s CloudServer platform truly was enterprise-class at a SMB price point.
Initial test results showed the 1&1 CloudServer is able to deliver a sustained 3-4x increase in storage performance and value over other web hosting companies with similar figures in CPU and RAM. For a virtual server with 8vCPU and 30GB of RAM, a comparable server at Amazon.com was 60% more expensive while being significantly less performant. For that same configuration, 1&1 was still 32% lower than the next lowest priced competitor.
The final piece was to be able to deliver enterprise application agility by maintaining the rapid deployment and resource change functionality. Testing showed that with 1&1, CloudServer customers can choose from over four million potential server configurations, all of which can be purchased, provisioned, and deployed in under 55 seconds. I think he can check the rapid provisioning box!
The preliminary benchmark report is available on the Cloud Spectator Website.
The Cloud Spectator data showed very quickly that 1&1 has successfully architected an enterprise-class hosting platform that is not only highly performant under load, but priced very aggressively in a hypercompetitive market.
As the CloudServer platform rolls out worldwide into 1&1’s different markets we (as well as competitors) are sure to be watching very closely to see how quickly Javier’s dream of building a new market segment in the cloud and hosting market for 1&1 develops and comes into fruition.
Read the full case study about 1&1.
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