By various estimates, 50% of all customer workloads will move to the public cloud in the next 5 years. For cloud service providers, this shift in the market has extraordinary business and competitive implications. Playing a price war game is clearly a losing choice. The big question: how can they position themselves to compete and win against the “big three” public IaaS companies (i.e., Amazon Web Services, Microsoft Azure, and Google Cloud)?
Two simple answers:
- Deliver the same operational efficiencies and automation as public clouds
- Provide customers with the best of both private and public clouds
Successful cloud service providers will meet certain conditions that fall into one of the requirements above.
Let’s look at 5 essential ingredients:
- Lower Cloud Infrastructure Costs by Removing Silos
- Lower Your OpEx: Automate Operations, Monitoring, and Patching
The public cloud market has been fiercely competitive and subject to frequent price wars over the past few years. Most of these price reductions have been a consequence of Moore’s law: relentless reduction of compute and storage prices year-over-year. However, public cloud vendors did not pass all of those savings to their customers, thus enjoying fat margins.
In fact, cloud service providers can achieve the same cloud economics as public cloud vendors. They can provide their customers with cheaper offerings while also benefiting from a healthy margin.
On the hardware side, it is important to consider the cost to buy a physical server compared to the price public cloud vendors will charge. Here is a simple comparison:
It is typical these days to purchase a high-end server with 512 GB RAM and 6 TB of SSDs for less than $10,000. This cost is amortized over 3 to 5 years. A VM with a similar configuration on a public cloud will cost more than $1,000 per month. Consequently, the cost of hardware can be recovered within a year, even with the electricity, cooling and rack space.
Managing and maintaining the infrastructure stack can get expensive. A key driver of cost is investing in hardware or solutions that create silos. There are measures that service providers can take to lower their costs and remove silos. One solution is to use a hyper-converged infrastructure based on industry standard servers. Another is to use scale-out cloud designs. These designs make it easy to start small and grow based on customer demand, while maintaining an ideal size.
Cloud service providers need complete visibility and control of their entire stack, from the infrastructure up to applications. They need intelligent software to monitor the hardware and software stack, manage large-scale clusters, and automatically handle time-consuming and complex routine operations such as failure handling, patching, security updates and software upgrades.
Running a service with traditional system admin teams, who execute the above activities manually, becomes expensive. This is especially true if they operate in server, storage, networking and security silos, as customer demand and volume of services and projects grows. Furthermore, additional team members are needed as the system generates more loads. This is inherently not scalable nor cost efficient.
Service providers should look for solutions that provide cloud-based monitoring and advanced analytics. In addition to improving their margins and better managing customer SLA’s, these cloud solutions will:
- Dramatically reduce the need for experts of different parts of the infrastructure
- Scale linearly as the size of the operation increases
- Cut operational complexity by 90%
The more that service providers can optimize resource usage and capacity based on current and future customer demand, the better handle they will have on availability and performance to deliver to their customers.
A lot of this comes down to capacity planning, utilization monitoring, rightsizing workloads, demand forecasting, and detecting zombie VMs and unused resources.
Demand forecasting and capacity planning can be viewed as ensuring that there is sufficient capacity and redundancy to serve projected future demand with the required availability. Capacity planning should take into account organic growth, which stems from natural service adoption and usage by customers. Having intelligent predictive analytics and machine learning can greatly help with accurate forecasting, alerting, and providing lead time for acquiring additional capacity.
Better insights into the performance of infrastructures can help in fine-tuning performance of end-user workloads. For example, an intelligent system that is monitoring a workload for storage performance might recommend using SSD’s, instead of spindles, to increase the IOP’s and improve workload responsiveness.
At the end of the day, there are some use cases where customers should utilize a public cloud. For example, bursting may be necessary for a short period of time based on workload. Adopting a platform that provides seamless migration to-and-from public clouds will give service providers this opportunity. In turn, this will provide customers with peace of mind that they are not locked into one type of cloud solution and have the flexibility to choose either based on the use case.
To stay relevant in this space, cloud service providers must differentiate themselves. Whether it is ease of use, specific focus on a vertical or emphasis on developers, they must find a way to stand out.
One way to differentiate is to help companies build software applications with easy-to-use self-service interfaces via API’s or CLI’s. These interfaces will extract the underlying complexities of the infrastructure, thus allowing developers to get their job done faster. Developers should be provided with pre-built application templates for popular software bundles such as databases, middleware services or messaging services. Developers should also have the opportunity to deploy these applications with a single click to improve productivity.
ZeroStack as a Hosting Platform
ZeroStack focuses on using intelligent software and Artificial Intelligence technologies to create self-driving clouds that are easier to host, deploy, and use.
For the first time, hosting companies, MSPs and regular cloud providers can obtain a cloud without having to deal with all the operational complexities and error-prone tasks like failure detection, handling, patching, upgrades and so on. ZeroStack’s intelligent software can quickly convert commodity hardware into a self-driving cloud to lower costs and improve margins.
To learn more, join Ajay Gulati, CEO and co-founder of ZeroStack at Hostingcon to see a demo of ZeroStack’s smart platform.
Read more about the ZeroStack hosting platform benefits at this link: https://www.zerostack.com/use-cases/hosting/