Parallels Summit: Innovate, Optimize, Grow

Feb ‘10Lance Crosby, CEOSoftLayer® Technologies

lcrosby@softlayer.com

http://twitter.com/lavosby

http://twitter.com/softlayer_news

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Access the presentation on:

www.slideshare.net/SoftLayer_Ask_Lance

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Innovate, Optimize, Grow

SurvivedThe worst recession and economic collapse in history.

EvolvedChanged our offerings, pricing, and business models to meet market needs.

GrewAs individual companies and as an industry we have excelled in a time of panic.

A quick look at the last 12 months in the hosting industry.

InnovatedBrought many new products to market, including leading the charge into cloud services.

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Innovate, Optimize, Grow

Eco-systemsIf you can’t be good at everything, what should you be good at?

Opportunity90% of all servers sold are NOT hosted!! Stop competing against each other.

ScaleHow do I scale my business to take advantage of the opportunity in the market?

So, what does the future hold?

InnovationHow can we (as individuals and an industry) stay ahead of the market and increase awareness?

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SoftLayer® Value Statement

InnovationWe lead the industry, bringing solutions to market before others realize the need for them.

EmpowermentWe push complete control to the end user to create the virtual data center experience.

IntegrationWe bring together hardware, software, security, networking, and storage in a single easy to use on-demand service.

SoftLayer Delivers Innovative World Class, On-demand,

Infrastructure Services.

AutomationWe automate every single facet of the data center environment to bring efficiency and standardization.

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SoftLayer® Difference

Automated Services and Standardized Solutions Customer-controlled, automated management of core functions including

OS installs and reloads, reboots, software installs, network management, monitoring, load balancing, firewall management, and more.

Industry-Leading Customer Portal and Open API Direct access to more than 150 backend systems and activities, executed without

any human intermediation. Mature API – over 1500 and growing

Industry Exclusive Private Network Server-to-server communication, out-of-band management, and unlimited data

transfer via VPN over dedicated carriers segregated from our Public Network.

Integrated Geographical Diversity Three data centers connected via private, 10G point-to-point connections,

and integrated through proprietary automated tools. Customers Choose

True Virtual Data Center Services Innovative infrastructure, solutions, and automation capabilities provide unique

advantages for virtualized solutions and a truly virtual data center.

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Innovate: Fully Integrated Environments

SoftLayer Provides the Only Completely Integrated Solution in the Industry.

Dedicated servers, virtualized environments, and cloud solutions all operate together seamlessly to create an on-demand solution that can be scaled in real time.

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Optimize: Automation is the Key

The Physical Server is the Fundamental Building Block to All Technologies.

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Grow: AKA SoftLayer® History

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Results: After 4 Years of Operations… $52 million in revenue for 2008 $83.5 million for 2009 $110 million annualized run rate (Feb 10) $1M in annualized revenue added every 10 days

175 employees

Dallas: 18,500 square feet raised floor Seattle: 15,000 square feet raised floor Washington DC: 10,000 square feet raised floor Capacity of 45,000 servers across current facilities

More than 5,800 in over 110 countries More than 25,000 deployed servers Average of 4 servers per customer Revenue of ~$1,600 per customer

Employees

300+ GB of connectivity 8+ network providers and hundreds of peers Sustained traffic of over 80Gbps

Financial

Data Centers

Network

Customers

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SoftLayer® 2009 Product Launches CDN Enhancements Cloud Storage Native IPv6 SUSE O/S SSD as Storage Option

Cloud Computing Image Management Storage Network WAN Acceleration

SSL Certificates API Enhancements Evault Bare Metal Restores NetScaler WebsiteSpark (Microsoft)

Private and Bare Metal Cloud Data Center Expansion in DAL, SEA, WDC

Q2 – 2009

Q3 – 2009

Q4 – 2009

Q1 – 2009

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Our Plan to Innovate, Optimize & Grow

Bring all of our services closer to customers

Expand our geographical footprint

Network, network, network

Grow

Accelerate new product launches

Enhance existing products with new features and capabilities

Innovate

Drive automation across all business functions

The only way to scale is to eliminate redundant processes through automation

Optimize

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SoftLayer® 2010 Product Roadmap

Q1 – 2010

2-Factor Authentication XenServer Essentials VMWare ESX Cloudkick Integration

Data Center Expansion – San Jose, CA Nationwide Network Expansion VPN & DNS Geographic Expansion Public API Parallels Bare Metal Server White Label Portal Mobile Applications – iPhone, Android, BlackBerry

Automated Managed Services Automated Colocation AutoScaling Cloud Portal Refresh

Cloud Appliances PCI Compliance Services Enterprise Software Integration Data Center Expansion - Europe

Q2 – 2010

Q3 – 2010

Q4 – 2010

Question / Answer

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Ask Lance

What’s the secret to building a high growth start-up?

Answer

Write your business plan

Create scalable systems

Diversify your personnel

Stop and look for mistakes

Question

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Ask Lance

What’s going to happen to pricing in hosting? Will the current high margins in cloud turn hosting intointo a commodity?

Answer

It’s too early to head into price competition

New market with lots of growth ahead

And it is critical to understand CapEx vs Margin trade-offs

Understand the trade-off between building and buying your own cloud

Question

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With the Right Tools, Cloud Can Be Profitable

Don’t Rush to Lower Prices – Rush to Raise Margins

$4,000 in fully loaded CapEx

$6,000 in fully loaded CapEx

$300 in MRR13 month payback

$1,200 in MRR5 month payback

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Ask Lance

What’s the internal mantra at SoftLayer regardinggrowth?

Answer Challenging, but not overwhelming

Question

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Ask Lance

How do you accurately guess what customers want?

Answer

Put yourself in the position of the customer and then build a menu that will satisfy that appetite.

Example…

Question

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Think Like a Customer.

Give the People What They Want

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Ask Lance

As hosting companies, we generate a lot of revenue from bandwidth. What’s the future of that as an offering?

Answer

Are you a telco? Or are you a hosting or managed services company?

We see bandwidth becoming both relevant and irrelevant in the next 24 months

Relevant… because customers will drive bandwidth requirements through the roof

Irrelevant… because it’s going to become the handle not the blade

Question

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Ready for “Free” Bandwidth?Addition of 7 PoPs and a New Data Center in San Jose

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Ask Lance

What’s the deal with IPv4 and IPv6? As a hosting company, should this concern me?

Answer

IPv4 is a limited resource and we are about to run out. Sometime in the next 12-24 months allocations will be reduced.

Shifting to IPv6 is possible, but it take planning and effort.

Why would you launch cloud without IPv6?

Question

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Ask Lance

How do I scale my business to take advantage of theopportunity in the market?

Is debt for capex a good idea?

Answer

2010 looks to be a solid year. IT spending is rising. Projects are accelerating, but capex is still very limited

Build an opex oriented business and leverage partners to create scale

Question

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Ask Lance

Why do anything? I’ve built a good business over the past 10 years, so why change now?

Answer

Traditional hosting isn’t dead (yet)

The hype of cloud in late 2008 was turned into a reality by the collapse of the global economy

The pace of change in hosting has never been faster than what we will see in the next 24 months

Question?

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Ask Lance

How can small hosting companies stay ahead of themarket and larger competitors?

Answer

Define your customers and strategic advantage and then focus on that

Smaller companies move faster than larger ones

Come together as an industry and work together

Our focus should be servers in closets not each other

Question

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Ask Lance

As a business leader, how do you prepare for changethat may be hard to predict?

Answer

Start with a great team and study everything around you.

And ask yourself how far ahead of the curve you want to be in delivering services

Trend-spotting is not easy and has high risk.

Question

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Ask Lance

Is cloud for real? Or is this just another buzzword fad?

Answer

The word may change meaning, but the concept is here for good.

It doesn’t matter if you are an _aaS, a Grid, a Utility, or a Cloud, just understand the implication for your business and find a way to participate.

Question

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Ask Lance

How do I make big revenue from hosting? What should I do if I am already a SoftLayer customer and have a web hosting business?

Twitter Q#1

How does SL see themselves in a year or 2, ahead of the competition technology wise, or are there any massive things planned?

Twitter Q#2

Lance Crosby, CEOSoftLayer® Technologies

lcrosby@softlayer.com

http://twitter.com/lavosby

http://twitter.com/softlayer_news

Thank You!