Service Provider cloud: what’s hot, and what is not?

Hello! I’m Jerry Mumford. I lead the business development team here at OnApp. I spend a lot of time talking with service providers around the world about their plans and goals for cloud services.

I thought you might be interested to hear about the trends, the commonalities I’m seeing in all of those service provider projects and conversations. Here’s a quick round-up of what’s hot in service provider cloud – and then, a look at what isn’t.

The Middle East is hot

Middle EastThere is a LOT of cloud activity in Middle Eastern countries. AWS has recently made inroads into Dubai, for example, and if you believe the analysts that is all that local businesses need. So why are we seeing so much interest from service providers in the region, who want to build their own clouds instead?

Honestly, it’s being driven by the same issues we hear when we talk to service providers anywhere – Central Europe is another example. Amazon might be driving awareness of cloud in a region, but when MSPs or Telcos really think about their options, there are three reasons why they decide to build their own cloud instead.

  • Number one: data sovereignty, otherwise known as data localization or data residency
  • Number two: cost and profitability
  • Number three: lock-in

While AWS infrastructure undoubtedly ticks a lot of boxes, and their cloud is of course loved by developers, what I hear from businesses is that it really is not acceptable to wait until year two – at least – to see any kind of payback on your investment. ROI is king in the service provider world, and there is a significant upside to being able to control your own destiny.

Smart Servers are hot

Server roomThis one is unique to OnApp. We’re seeing a resurgence in dedicated or bare metal server hosting, using our “Smart Server” capability. The OnApp cloud platform doesn’t just do cloud: it also lets you sell Smart Servers, which are like a hybrid of a cloud server and a dedicated server. They give you the automation and flexibility of the cloud, with the performance of a dedicated bare metal server.

Why is that important? I’m not especially technical, so I asked Jim Freeman, who heads our pre-sales and cloud architecture team, to explain:

“What we’ve found lately is that people want to use Smart Servers, not just to replace high-performance servers (for example, a server you’d want to host a database on) but to provide a way to offer near bare metal performance with all of the advantages of virtualization and cloud too. Things like self-service, having a web console, being able to reboot the VM, autoscaling to add more resources, and so on.”

“You can automate Smart Servers with the OnApp API instead of having to interact with the Managed Power Bar, the server IPMI/iLO, just to get the thing powered on – let alone provisioning the server to a client, customizing its applications, reinstalling it and all of the other manual activities that normally come with bare metal.”

Thanks Jim. But what’s the commercial story? Well, recently we’ve been working with service providers in the US and Poland, for example, who are evolving from traditional bare metal server products, to offering all of their traditional “dedicated hosting” services with Smart Servers.

Smart Servers let service providers automate the entire datacentre, not just the cloud part – and that can be a differentiator for cloud providers who know their customers have applications that need bare metal performance, as well as the flexibility of cloud. Automation gives you better time to market, reduces cost, and makes your service more compelling and profitable.

What isn’t hot?

On the much cooler end of the spectrum are two alternative approaches to cloud we come up against in tender situations.


Photo by Manki Kim on UnsplashThe first is Hyper-V. Since OnApp launched in 2010, we’ve occasionally had providers asking about Hyper-V support, and our response has always been the same: if there’s sufficient demand, then yes we’ll build it. The trouble is… there isn’t demand. Perhaps one in a thousand companies we talk to mentions it.

That’s not to say there is anything wrong with Microsoft’s hypervisor – it’s just that it doesn’t appear to have any relevance to the service providers we talk to, who want control of their own destiny with cloud services, rather than simply reselling.


Photo by Hans-Peter Gauster on UnsplashAnd the second? OpenStack. Again, we have nothing against the technology, but – especially in younger cloud markets – we do, from time to time, find ourselves presenting OnApp as an alternative to OpenStack, and it’s a competitive situation that quickly becomes a non-competitive situation as soon as we get to a demo.

If you’re a service provider and you really, truly believe you have the development, support and integration skills to make an OpenStack cloud a success for your business, then go for it. We’re all for diversity. It’s just that, typically, we find that time-to-market, a ready-to-launch feature set, and a service provider focus is where the money is for our clients. There is no such thing as a free cloud!

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