OnApp's Secret Weapon: Strength In Numbers

In a world in which Amazon Web Services (AWS) and other cloud titans threaten to dominate the traditional hosting industry, OnApp believes there's strength in numbers.

OnApp is essentially a union organizer when it comes to cloud. The company has been helping hosting providers big and small stand up clouds, as well as offering content delivery (CDN) services through federated infrastructure. The company added distributed storage, and will be adding federated compute as well.

“Our customer base continues to expand rapidly, using OnApp primarily to deliver public cloud capabilities,” said Kosten Metreweli, OnApp’s Chief Commercial Officer. “What we’ve seen in the past is that hosting providers come to us and say ‘I have to deliver a cloud capability’. Now we’re hearing it in the telco space more frequently. Regional telcos are beginning to look at building their own cloud services.”

Some of the larger hosting providers that use OnApp include UK2, Peer1 Hosting, and Exabytes. A lot of these hosting providers develop functionality internally to make the platform their own. The company also assists smaller hosting providers stay competitive against the cloud giants.

"Right now, if you’re a service provider and you’re not offering cloud, you’re in trouble,” said Metreweli. The company helps hosters launch clouds quickly and easily. Through federated infrastructure spread across many locatons - including CDN, storage, and soon compute - OnApp helps these companies reach global scale quickly and easily. “Across our customer base, an OnApp service provider grows 80% through their cloud service,” says Metreweli.

Telcos and Emerging Markets Increasingly Leveraging OnApp

The company’s appeal is expanding to Telcos, particularly in emerging markets. Matreweli mentions recent wins in Eastern Europe as prime examples of this.

“In Eastern Europe – Southeast Baltic states, Poland, Russia we’re seeing more interest as well," he  says. "Bulgaria and so on, we’re seeing pick up. Even in Africa. They haven’t had any decent hosting companies there, but everyone’s jumping to the post PC-era. Rather than the classic lifecycle they’re jumping straight to cloud.”

The primary usage of mobile devices to access the internet in a lot of these countries means the processing increasingly occurs outside of the device, and in the cloud. OnApp is an easy way to bring cloud services to countries that can catch up through cloud.

The core of OnApp's business is the cloud management platform, user management, billing, and user interfaces.. Things are moving forward, with the company now touting over 700 service provider customers in 87 countries.

“That customer base spans a pretty wide range from relatively small hosting providers, to large hosting providers that span wide. Telcos are coming on board a lot recently,” said Metreweli.

Part of the reason for this is the company has been adding features to make OnApp more enterprise friendly. Distributed storage, the CDN and recent VMWare capabilities all speak to this.

New Features Target the Enterprise

The company continues to update the platform as well Some examples of the additional capabilities – managed Xen and kvm, now VMware as well. Anycast DNS service – all bundled in for free with service providers. The OnApp Cloud platform also now includes distributed storage, which helps solve performance problems for providers and increases I/O performance, according to Metreweli. Coming up is OnApp’s upcoming federated compute play.

“The OnApp platform is just one piece of the puzzle," said Metreweli. "There’s a bunch of services you can bundle in. CDN service, allows service providers to put spare  infrastructure in the marketplace.”

The marketplace is a key feature. It gives the ability for customers to buy compute in other locations, or sell spare compute, making money on servers otherwise left unused. The federated model means that as OnApp adds partners, the global cloud becomes stronger. It lets the little guy compete, providing capabilities to cut down the cost of getting to market.

Tapping Unused Infrastructure

In 2011, the company began offering customizable, cloud-based CDN for global e-commerce, fueled by its service provider customers lending unused infrastructure to the cause.  The CDN now has over 170 points of presence, all provided by service providers, making the sum total the second or third largest CDN provider. Akamai and Limelight own 75 percent of the market, and this helps customers compete by given them CDN capabilities without the need to set it up. It’s expensive to build a CDN; through federation customers can pick and choose where they want POPs.

“Capex to get started is high –  we turned the model on its head,” said Metreweli. “Because the federated model, we leverage the power of many.“

“Cloud services are getting more and more commoditized,” said Metreweli. “If you use OnApp, how do you achieve those same revenue streams? You get to sell CDN. You get to put your spare infrastructure in there.”

Commoditization isn’t necessarily bad; hosting providers have plenty of room to differentiate in terms of customer service, and through providers like OnApp, additional features.

“If you do not have the time or the skillset to build a cloud, OnApp is a way to offer a full range of services to compete with Amazon,” said Metreweli