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It is a smart move to lower the barrier to entry of OnApp. You can start a VPS hosting company now without even renting hardware, for $50/month! This pricing wont work for some of the bigger companies on here, but I can definitely see newer hosts popping up on the market utilizing this. The only way this will work with bigger hosts is if you have tiered pricing and the $/GB RAM price is discounted the more servers you have. Even then, the $/GB RAM pricing is a hard sell
This is an interesting idea in the sense of the less of an initial investment. The actual pricing though isn't really that changed. The majority of marketing material talks about anywhere from 5:1 to 10:1 CPU:VM oversubscription ratio. The 5:1 example would give you $5/month for that 5GB or other way to look at it $5/core. The 10:1 would be $10/month for 10GB or $10/core. This model is really advantageous for those that are not as heavily overselling the CPU's.
My opinion on per GB or per core pricing there really needs to be a cap on each hypervisor. For the GB model maybe it's $200/month or another way to look at it is you're charged for the first 200GB per hypervisor. This maintains the low barrier of entry and gives incentive for the larger providers to remain on the product.
I think the RAM pricing can work, but it needs to be capped at some point. E.g making it $0.5 per GB and charging for a maximum of 512GB per node. Or $1 per GB and charge for max 256GB per node.
Edit: @TonyB beat me to it.
Really good feedback, Nick, and thanks for the calculations. Yes, it's up to 20%, but looking at the OnApp base where we have real numbers we are way lower. And OnApp (priced per core) is more expensive than cloud.net (ie. if we applied the cloud.net pricing across the current OnApp client base we would see a significant drop in revenue). Thing is, most service providers do not live in LET land, they are above that in price - and with above I do not mean Rackspace pricing, but still a revenue per user significantly higher than what LET generally work with.
Gross revenue works in an enterprise/telco scenario where the ARPU of the end users are sufficiently high. In a LET world it does not.
A per socket model would eventually dilute the OnApp business as the number of cores->socket would significantly go up over time at a rate higher than application requirements would go up. IE. a if OnApp charged per socket we would over time drop in revenue per workload. Does that make sense? That is why, frankly, we need a liniar model where scale applies to us as well as the service provider is the only way to keep us in business. That is also why, I suspect, that most other suppliers at size in the industry has moved to a similar usage based model.
Thanks for your feedback. I am glad you agree with the principle of the model and see the problem we've tried to solve here. We have actual cost though, not only sunk cost of development, but also the cost of every control panel deployed. AND we have introduced live chat support directly inside every control panel to make the experience even better than in the OnApp core platform.
I am open to discussing some level of tiering...we will think it over
Thanks again
Thanks Tony - like Hassan and Nick above you make some good points. If it's tiering or a cap, I do not know. I am glad you like the basic idea of cloud.net.
Thanks for your feedback!
D
Interesting approach. OnApp is designed for big corp customers, cloud.net for mid-tier and solus.io for bottom feeders.
Does anyone has solus.io node(s)?
@ditlev I hear what you are saying and I cant disagree with you, however I am not able to understand what are the benefits of going with cloud.net (speaking strictly for the bear metal part) compared to something like solus.io or fleio.com ?
The idea and product look good. I agree with the reservations expressed by others about the pricing model. A cap on pricing per compute hardware would make sense.
@ditlev
Will users of cloud.net eventually be able to sell compute and CDN resources in the OnApp federation?
Will they be able to buy the same resources from the fed?
That’s an interesting way to look at things.
I’m busy playing with Solus.io privately.
Where would you place Virtualizor? 😂
There’s something for every market segment.
>
I should add that we're not a LET host, that's not the angle my comments are coming from.
I'm not convinced by the socket argument, I can only speak for ourselves, but compute nodes are continually being added, so your revenue would keep going up. CPU core count is going through the roof, but as a provider, we take advantage of that to offer better service and value to my customers, not pocket it, which means your share of my revenue keeps going up, and up, until it becomes unviable.
You probably need to just ignore the LET market for something like this, it's not going to work, but there's a huge market of people like us who are happy to pay, would build out a lot of cloud for the federation, but at a sensible price. Probably revenue share.
I am not one to discuss Solus/fleio features etc. Though, I will say that OnApp has been around for 10years now, and while our footprint is not huge in the mass/LET market we do have a large number of sizeable clients both in the Telco and enterprise space.
I guess one major difference is the fact that cloud.net is delivered as a service, hosted and setup instantly.
In the past it's been hard for us to work in the mass market space as the cost/efforts of setting up OnApp required us to have a fairly high minimum fee. We've now pretty much eliminated all of those setup woes. Similarly we have removed the server cost that hosts would normally have to endure for the hardware hosting the actual control panel.
So with cloud.net OnApp is now available with a few clicks, a week's free trial and for $50/mo.
Thanks!
Yes!
Yes!
Carlos put a video together last night showing how easy it actually is: https://cloud.net/cloud-net-video-walkthrough-to-first-vm/
He is working on a video now where only the federation is used, id. without adding your own bare metal.
You're wrong.
The world needs a better product than SolusVM.
You're still insisting in the federated market. LET providers don't want that.
They also don't want to be billed 1$ USD per GB of RAM.
I understand you've done your marketing, but you're targeting the wrong clientele here.
Also, a week trial is... Pretty much useless when evaluating such solution.
You may know, and you've mentioned, that you know Telcos, but you don't know this market.
Neither you or Carlos Rego. I spoke to him in the phone, he's an excellent guy, but you're definitely targeting the wrong market. You're asking for a slice of profit (profit? LET? where?) where it doesn't exist. People here sell a 4 GB RAM VPS for 7 USD or less, you'd want 4 USD to your pocket, while we're running the full hardware, IP's, et al.
Just forget it, it's not feasible. I don't know much about Telcos, but I know this market very well. You're sort of trying to force us to think as you do, but you're not focusing on the lowend market that is LET.
Same applies to more providers that aren't on LET, but they still won't give you such a high margin. Bill for the software, dont' bill for RAM allocations. Bill PER NODE.
Edit. Double post
Solus.io has potential as it's owned by Plesk. It's also cheaper than cloud.net as per their recent announcement. Granted, prices could rise up later, but I doubt that'll happen.
Fleio, fleio... Fleio is just awesome.
Yes - and that's what we've build
Perhaps not - we will see.
Perhaps you are right there. I really do want this to work for the LET market, but obviously, if I look at the offer section I can see providers selling VMs with 1g ram for $12/y (https://www.lowendtalk.com/discussion/170297/12-year-1gb-dallas-ryzen-vps-limited-quantities-available). That is pretty much the cost of the IP number
And not a market where there is room for cloud.net or OnApp.
So, yes perhaps you are right.
We are hosting a full installation of OnApp for that trial. It has actual cost for us. We can not give longer, and those that are willing to put in more than a weeks time for testing should also be willing to pay $50, no?
No offence but thinking your own software is superior than other is not a good thing.
Of course the world don't need another solusvm but we definetly need something better than that instead of reselling someone else's product.
Also I never said that we can't invest on our own hardware, we already did and will do more in future months and that's why I said we need something similar like Onapp but littlebit more flexible pricing such as Per core or per node like $50 - $60 per node or $5/Core
Also as I said each or server (own by us) has 256GB to 512GB RAM and in this case we have to pay $512 per node to you just only for your software and which is insane for us
I know Lowend is not your targeted market neither we are.. But still for us it's better to invest our recourses on something else like Openstack or Cloudstack instead on this
Anyway, Good luck with your sales..
Stay healthy and stay safe..
Thanks for your reply
I know I know, and agree - and it's far from my nature to do so. It was mostly a misplaced joke, perhaps you did not know that I used to own SolusVM before I sold it to Webpros/Plesk a few years back. So I know more about the platform than most.
Agree.
I understand that pricing is not ideal for everyone.
Gotcha
Thanks
Yes I know very well.. That's why we were exited about the announcement..
and here: https://cloud.net/using-cloud-net-marketplace-compute/ Carlos goes through setting up a cloud only using the federation and $4/VMs
D
What did I tell you people? He wasn't going to eat off his own plate with a stripped down OnAppLite.
Which is expected, He has many many people to feed.
Francisco
well, funny that - here at LET I am being told our pricing is way too high. At the same time current customers are emailing me saying that this new model will take away the 'exclusivity' of OnApp and invite a whole new segment on board to compete with their 'premium' service.
...My job ain't easy
It is too high for this market, I absolutely agree.
That said, if you really have 100 employees then you can't really be swimming around in the Dead Sea without endangering your current profits.
Francisco
How do you deal with abuse? For example:
ProviderX sells a 1GB VM from your federation (gets the resources from Provider Y and just resells). A customer of Provider X does something illegal, but the police comes knocking on Provider Y.
I actually think a large minority of the guys hanging out here (I can see from the companies that have registered via the LET-only trial form) are focusing on other segments than just the traditional LET offers. But you are right, for a lot of the providers here this price may not work.
We are quite a bit more than 100 - but you are clearly right, a lot of mouths to feed
Cloud.net is a strategically important for me though, we turn down many potential customers every week because of the entry barriers (both hardware setup and high monthly license fees). I hope cloud.net will work out for them.
D
If you think it through everyone here is selling someone else in the ecosystem. You may buy your own servers, but you colo somewhere else. You may even have your own DC, but buy IP/power from someone else. You ENOM your domains, Stripe your payments etc etc. All of those parties are somehow complicit in delivering the service you offer. And all of them will potentially come after you if you or your customers break the law.
OnApp buys the hardware from the supplier and sell it to the demand side of the marketplace, all happening in realtime. We keep 10% from the seller (thats how we make money from this) and in return we take SLA and legal responsability.
Though, in your specific case it's no different than any other relationship you have with a provider. Like, when I had UK2Group (granted, ~10years ago now) we had the police coming by once in a rare while because one of our partners/resellers had dodgy users on what effectively were our infrastructure. If it was serious we closed down the servers and dealt with it accordingly, but most of the time we could contact the partner to let him deal with the end user.
OnApp have 24/7 NOC that keeps an eye on all servers and we are never more than an email/call/chat away to help deal with problems like that if they should appear.
We have seen some of it, in partifular in the CDN part of our federation. You know, football/sport event re-streaming. And we typically get the DMCA from the vendor and deal with them through our team instantly. Easy peasy.
Just a thought here, and I don't know the volumes obviously, but if you're taking 10% through the federation, then why not have an offering where by providers can just supply servers all round the world under certain terms (min specs, network speeds etc), and then add them that way, but you take say, 20% or something but no other fees?
I'd be interested in that, becoming purely a back end provider for the federation if there was enough expected volume.
Hi Nick,
Thanks - we will keep this idea in mind if we are ever short of supply
D
Ditlev. You opened this thread and even had a special landing page for us. So that means that you had something, supposedly, that we would signup for. People discussed pricing with you and you made people believe it would be pretty cheap.
Not only it is SaaS as its hell of expensive. A cheap 128GB node turns to be 128 USD. That's not going to work and you are failing to acknowledge it. Your marketing stunt didn't work here.
So why don't you stick to the Telcos and super awesome large clients? You tried to target LET, it didn't work. After your announcement people expressed their thoughts about pricing. You released an even worse pricing than most products in the market. Even so, we argued it was way too high, now you say your large customers are complaining. Something doesn't sound right.