3 Universal Truths about Enabling the IaaS Market

There has been quite a bit of chatter on the web lately about cloud service providers, the IaaS market, private vs public cloud, etc etc. With Cisco taking a head first dive into the business of IaaS enablement and the subsequent publishing of the ROI calculator I felt compelled to share some insight from 6fusion beyond my quick blog post the other day.

6fusion has been helping data center providers create utility computing nodes for about 5 years. Not a lot of time in the big picture, but a heck of a lot of time in the cloud service provider industry for sure. We give our technology (yes, give) to data centers and help them (at no cost) get into the cloud service provider business. Over that span of time we have discovered a few universal truths about this market.

Before I elaborate on that, let me give you a quick introduction to part of the process what we go through with new data center partners.

This is an excerpt from a 6fusion process document for new IaaS partners:

4. ROI Calculator

In order to estimate the value of your 6fusion utility computing node, we require certain data inputs, the results of which will identify precisely the amount of revenue a prospective partner can expect to earn. The inputs we require include:

  1. Total Number of Blade Servers
  2. Total Number of Rack Servers
  3. Total Number of Hard Drives
  4. Total Internet (WAN) Capacity

    In addition to raw material quantities, UCV Program Partners must complete [a simple input table that characterizes the cost and technical limits of their resource pools]

Every single time we do this process our partners make the same first remark: “That’s it? No forty-sheet excel workbook? No training course to understand all of this? No pain? No charge?”

Yup.

That’s it. Well, I guess I should say that part of this is possible because of our secret sauce, but I won’t get in to that here.

So here are the three universal truths we’ve learned about enabling the IaaS market:

Truth #1: The money-in equation trumps everything else in the decision process.

I can show any data center vendor how much they can make based on the hardware they want to toss into the game. And THAT is the part the service provider cares most about.

Truth #2: All x86 hardware, no matter how many white papers you publish, is a commodity in the IaaS world.

Note to Cisco and others: You are the guys that supply the coal for the furnace. That’s it. That’s all. You do it really well – and without you this whole thing won’t even exist. But when our partners go through this process they honestly don’t give a shit about brands, logos, super bowl ads, flash web sites and twitter feeds. They care about how your revenue run rate yield compares to your biggest competitor.

Truth #3: Agnosticism is a powerful currency.

Cisco releasing an ROI calculator for their own kit is like asking the Pope his honest opinion about how Catholicism stacks up against the other religions. Honestly. Are we really that naïve? Giving the service provider a truly objective view into ROI packs a very powerful punch.

The really interesting thing is that providers like 6fusion can be a tremendous asset to the hardware companies that really truly have stuff customers should buy. What better way to prove your marketing department right than to see how you stack up in an objective, apples to apples comparison? Think you’re the crème that rises to the top? We could actually help you prove it!

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