“Yes, I am a Reseller! But, Where’s the Margin?”
Every hosting company wants to find their path to success in an increasingly crowded, global, and commoditizing market. With more and more companies getting on the hosting bandwagon, how do you differentiate yourself? How do you bring in that extra bit which will bring your customers the value that they are looking for? In this session, the speaker shares multiple scenarios and best practices on how hosting providers can go beyond just being just resellers to becoming value partners, and in the process build up their margins.
Lemanto Siantar
Channel Development Manager
Softlayer Technologies, an IBM Company
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“Yes, I am a Reseller! But, Where’s the Margin?”
1. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Yes, I am a Reseller. But, Where is
the Margin?
Lemanto Siantar
Channels Development Manager
SoftLayer
2. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Traditional Reseller Model
PORTFOLIO
MARGIN ON
INFRA
MARGIN ON
MAINTAINENCE
Product from
Company A
RESELLER
Product from
Company B
In-house
Infrastructure
Partner
Infrastructure
LICENSE FEES
LICENSE FEES
INFRA COSTS
MAINTAINANCE
COSTS
MEMBERSHIP
FEES
MARGIN
SERVICES
MARGIN
SERVICES
MARGIN
TOTAL
ACQUISITION
COST
ONE GIANT
MARGIN
CUSTOMER
INITIAL
DISCOUNT
LOYALTY/ NEW
CUSTOMER
REDUCTION
COMPETITOR
ADVANTAGE
DISCOUNT
ANNUAL
CONTRACT
DISCOUNT
SERVICE
DELIVERY
COSTS
UNEXPECTED
MAINTAINENCE
COSTS
?
?
3. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Traditional Reseller Model
PORTFOLIO
MARGIN ON
INFRA
MARGIN ON
MAINTAINENCE
Product from
Company A
RESELLER
Product from
Company B
In-house
Infrastructure
Partner
Infrastructure
LICENSE FEES
LICENSE FEES
INFRA COSTS
MAINTAINANCE
COSTS
MEMBERSHIP
FEES
MARGIN
SERVICES
MARGIN
SERVICES
MARGIN
TOTAL
ACQUISITION
COST
ONE GIANT
MARGIN
CUSTOMER
INITIAL
DISCOUNT
LOYALTY/ NEW
CUSTOMER
REDUCTION
COMPETITOR
ADVANTAGE
DISCOUNT
ANNUAL
CONTRACT
DISCOUNT
SERVICE
DELIVERY
COSTS
UNEXPECTED
MAINTAINENCE
COSTS
?
?
4. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
The New-Age Resellers
PORTFOLIO
Product from
Company A
RESELLER
Product from
Company B
In-house
Infrastructure
Partner
Infrastructure
LICENSE FEES
LICENSE FEES
INFRA COSTS
MAINTAINANCE
COSTS
MEMBERSHIP
FEES
MARGIN
SERVICES
MARGIN
SERVICES
MARGIN
TOTAL
ACQUISITION
COST
ONE GIANT
MARGIN
CUSTOMER
INITIAL
DISCOUNT
LOYALTY/ NEW
CUSTOMER
REDUCTION
COMPETITOR
ADVANTAGE
DISCOUNT
ANNUAL
CONTRACT
DISCOUNT
SERVICE
DELIVERY
COSTS
UNEXPECTED
MAINTAINENCE
COSTS
?
?
MARGIN ON
INFRA
MARGIN ON
MAINTAINENCE
CORE
INFRASTRUCTURE
PARTNER
MARGIN
SERVICES
5. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Be a SaaS Provider – Increase your Scope
COREINFRASTRUCTUREPARTNER
SaaS Tool o
Manage Your
Infrastructure
Beautiful Graphing
Custom Dashboards
API Management
Website Monitoring
Cloud Management
Server Monitoring
Advanced Alerting
Full API
Plugin Store
Fully Hosted
Monitor Everything
6. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Master an Industry – Specialize a Niche Segment
COREINFRASTRUCTUREPARTNER
GAMING &
SMARTPHONE
APPLICATION
DEVELOPERS
Japan-based
managed
hosting
service
provider
• Managed Hosting
• Dedicated Servers
• Cloud Servers
• Network Integration
7. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Host a Product – Manage the Environment
Oracle ATG
Commerce
In-house
Infrastructure
CORE
INFRASTRUCTURE
PARTNER
PCI Level 1
Compliant
Hosting
Provider
• Oracle ATG Commerce Installation, Configuration
and Maintenance
• Oracle Database, JBoss Enterprise and RedHat
Linux Enterprise Licensing
• 24/7 Expert Support
• 99.9% Uptime SLA
• PCI Level 1 Compliant
• Performance Tuning
• Disaster Recovery
• Content Delivery Network through Akamai, Limelight
• ATG Development Server Only
• Disaster Recovery Cluster (DR)
• Hot-Hot Global Load Balancing
• Migration
• PCI Compliance Consulting
• Scalability Services
• Upgrades
• Web Performance Package
8. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Partner Type Definition
Referral Program Are in a position to refer new hosting customers to SoftLayer:
Business Partners receive monthly commission payments for referring customers to SoftLayer that result
in a signed contract (10% year 1, 8% year 2, 6% year 3)
Refer single or multiple accounts of at least $150 per month in customer billings.
Referred customers sign directly with SoftLayer
Examples include application developers, consultants, web designers, etc.
Referral partners are managed by channel sales team
Services & Solution
Provider Program
Buy IaaS offerings from SoftLayer at a discount (from 5 to 20%)
Hosting may be resold or delivered as a component of the Business Partner’s overall solution. May or
may not leverage SoftLayer’s brand.
Is responsible for Level 1 Support.
Examples are SIs, MSPs, Solution Providers, Distributors, and ISVs.
Relationships are managed by the SoftLayer Channel Sales team
Current Channel Programs & Definitions
9. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
SoftLayer - Global IaaS Leader
Formed by 10 industry veterans in 2005
Model predicated on software-driven infrastructure
Unencumbered by early-industry legacy restrictions
Founding principles
Innovation, Empowerment, Automation, Integration
Acquired by IBM in July 2013
9
10. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
Cloud Infrastructure At
Enterprise Scale
BARE METAL SERVERS VIRTUAL INSTANCES
Public CloudsHosted Hybrid CloudsHosted Private CloudsVirtual Servers Private Clusters
STORAGE
11. CONFIDENTIAL INFORMATION • SOFTLAYER, AN IBM COMPANY
21,000 Leading-edge Companies
Depend on Our Cloud
Software as a Service Mobile & Communications
WhatsApp Voxer Instapaper Yelp
Social
Games and Entertainment
Hosting & Service Providers
EnterpriseMarketing and Digital MediaPlatform as a Service
https://marketplace.ibmcloud.com/apps/340?restoreSearch=true#!features
Server Density
A SaaS tool to manage your infrastructure. Provision instances on the SoftLayer cloud. Monitor Linux, Windows, FreeBSD & Mac servers and check website uptime and response time.
DataHotel Co., Ltd. (DataHotel), a Japan-based managed hosting service provider for mobile and smartphone application developers, has selected SoftLayer. as its cloud infrastructure provider of choice, in order to expand overseas delivery of “DATAHOTEL for App."
IT infrastructure plays a vital role in sustaining a company’s growth as they expand into new markets. As such, organizations require a high level of support from their IT vendors as they expand globally to ensure that they can deliver stable services to their customers, keep costs low and maintain enough flexibility to adapt to rapidly changing business needs – regardless of where their IT infrastructure is physically located.
With its flagship service, “DATAHOTEL for App.” DataHotel manages the IT infrastructure for gaming and smartphone application developers, allowing customers to focus on development rather than IT maintenance. As smartphone use increases world-wide, DataHotel provides a global IT infrastructure that can support application development and delivery for overseas customers, without subjecting them to performance and latency issues*.
SoftLayer’s bare metal servers allow DataHotel to support its customers’ complex frameworks in a way that virtual machines could not. Further, the dedicated network and low latency that SoftLayer’s cloud provides allows DataHotel to maintain the security and performance that it needs to drive global expansion.
Spark::red is a global PCI Level 1 compliant hosting provider specializing in Oracle ATG Commerce. They offer Oracle ATG Commerce hosting solutions for medium and large eCommerce businesses including Fortune 1000 companies. With full-redundancy at every layer, the most powerful servers, and the industry's most knowledgeable architects, Spark::red delivers exceptional environments in weeks, instead of months.
The Spark::red Oracle Commerce Solution is a package that includes all required hardware and software installation, configuration, securing, tuning, monitoring and support (including deployments and integrations) as well as Oracle Database and JBoss licensing. As we strive to be a real technology partner for you we built our hosting solution around your business needs. Spark::red can grant you access to production systems allowing you to make changes to the website as needed.
Features:
Oracle ATG Commerce Installation, Configuration and Maintenance
Oracle Database, JBoss Enterprise and RedHat Linux Enterprise Licensing
24/7 Expert Support
99.9% Uptime SLA
PCI Level 1 Compliant
Performance Tuning
Disaster Recovery
Content Delivery Network through Akamai, Limelight
Services:
ATG Development Server Only
Disaster Recovery Cluster (DR)
Hot-Hot Global Load Balancing
Migration
PCI Compliance Consulting
Scalability Services
Upgrades
Web Performance Package
Global Cloud Leader
Created by 10 Industry Veterans – 18 years – 3 companies
Started with one of the first mass market hosting companies in the world 1995
Dialup, hosting, domain registration
Learned the value of automation
Next moved to ne of the first mass market dedicated hosting companies in the world 1999
Colocation & managed services
Learned how automation could enable faster provisioning
SoftLayer
We previously had seen how most customers were ordering the same products and services over and over, but did so in a custom way. They were all using the same x86 servers, firewalls, and load balancers, etc but in a custom deployment.
We had the ability to created something new from blank sheet of paper – driven by customer demands and needs.
Wanted to design something that at the time didn’t exist
We decided to pre-build a standardized platform with an abstraction layer on top called IMS that allows us to sell infrastructure as service.
Buy it buy the drink, only pay for what you used, and easily scale over time with price predictability
We had to think differently about how we did things before to achieve the attributes our customers were looking for.
Rack and stack servers differently
Create a new complex network topology that didn’t exist
Create a billing model to allow for monthly and hourly billing
Ultimately SoftLayer would become one of the first (if not the first) cloud computing company in May 2005 - 12 months before our closest competitor – Amazon.
Four Guiding Principles
Innovation – “innovate or die” – SoftLayer’s fundamental operating mantra is to bring new technologies to market as soon as they become commercially viable
Empowerment – complete transparency and control to the end customer. Our datacenter is your datacenter. We show customers everything. If you want the information its there, if not spin up your infrastructure and you are on your way.
Automation – key takeaway today – automation / automation / automation – if it cannot be automated – it does not live within the SL platform. Automation; 1) reduces costs 2) improves efficiency, 3) improves time to market, 4) eliminates human mistakes and results in higher SLA
Integration - hosting solutions traditionally have been disparate operating silos – SoftLayer offers a fully integrated approach from billing to service delivery delivered thru a single interface and API set. It also means building solutions that allow you to integrate your current infrastructure into the SoftLayer cloud.
Global Cloud Platform
SL is the ONLY cloud provider to offer bare metal, private clouds and public clouds in a single integrated environment.
Bare metal – for I/O and proc intensive applications –
Ideal for database and big data
Lose 20-50% of horsepower if you virtualize
Brings cloning flexibility of virtualization to bare metal with FlexImage
Physical to virtual or vice versa
Private cloud – Your hypervisor on our hardware
Whatever hypervisor… we do not care
Public cloud – virtual machines in a multi-tenant environment
Flexibility and the fastest deployment
Low management overhead as hypervisor is turned over to us
Mix and Match all three technologies across multiple datacenters
Largest and most sophisticated customers use all three
Interconnected private network with no bandwidth cost
Presented to you as if they were in the same physical rack
Can share systems - firewalls, load balancers, SAN storage and backup
All managed through the same UI or API
Leading-edge Customers
First 5 years – internet centric SMBs – born on the web and die on the web – revenues tied to platform
Last 3 years – huge shift to enterprise or fortune 1000 – top 25 customer base rolled almost 100%
Future – continue to service internet centric customers while services cloud demands of IBMs enterprise clients